Cash Flow Is The Life-Blood Of A Company
How would you propose obtaining the funds needed to keep the company alive and thriving for the next 2 years until you are able to see a return on the product development? How would you keep the stakeholders happy?
Cash is king is a term used to point out the value of money is more than any other tool of venture. The term is naturally used when prices are high in the securities market, and investors make a decision to make enough savings to utilize when the prices become cheaper. Having so much cash in possession is a good sign, and a durable flow of cash gives the company more suppleness in relation to making decisions about the business and the possible investments (James, 2018).
As a CFO of a struggling company, getting enough cash to sustain the company can be hectic especially when on the verge of becoming bankrupt. Obtaining funds to keep the company alive and thriving can be a hard job when dealing with a struggling company that doesn’t have anything to offer.
First, we will consider factoring. This is a financial strategy in which the organization sells its bill receivables to a third party at a discount in an attempt to raise fund to sustain themselves. It is the selling of all the account receivables to an outside agency. The agency is referred to as a factor. In this concept, after selling some goods and services, I will generate enough invoices from the same. Then I will sell the invoices to a third party. The factor will pay us after making some discount deductions on the value invoice. Although the factor does not make the payment for all the invoices at once, the 75 to 80 percent invoice value paid will be good enough to raise funds for my organization.
Getting a microloan is vital too. Even if the company may lack a history of credit, guarantee or the incapability to get a loan via the bank it does not mean that we can’t get a loan from any other place. The best option is to apply a loan for a microloan. Microloans are usually small such that the commercial banks can not notice or be bothered by lending of the funds. Instead of going to banks, we will target a microlender, which is non-profit organization working contrarily than the banks. Microlenders offer loans of small size and Oftenly require less documentation than the banks and less strict criteria of underwriting is applied. According to Kidwell et al., (2016), microloans are for the startup industrialist or an entrepreneur who has been in business but is facing financial crisis just like our company who needs a secure capital for survival.
Stakeholder management is one of the vital soft skill that is required from a manager even in times of financial crisis. Keeping them happy and involved in the company endeavors is critical for the success of the organization. Stakeholders include the sponsors, customers and the public who are involved in the organization actively and their interests affect the performance of the company in either a positive or negative way. Stakeholders exert influence over the company, its deliverables and even the financial situation of the company (Trentim, 2015).
In this company, we will keep the stakeholders happy by making sure that they are all involved in every step we take and also manage their influence in relation to the company so that we can ensure successful results. The stakeholder can easily act against the company, and the best way to keep them happy is by delivering a successful project to them.