1. Place yourself in the role of a small-business consultant. One of your client

Question

1. Place yourself in the role of a small-business consultant. One of your clients, Home Solutions, is considering opening two new stores. You should know that businesses often experience cash flow problems due to continuous changes that occur in the industry, such as the growth in the case of Home Solutions.

2. Prepare a topical paper that explains to Home Solutions the problems a firm can experience when it encounters cash flow problems due to growth. Outline at least two possible business options Home Solutions could try in order to avoid these problems. Cite any sources correctly and list properly in a reference page.

3. Your paper should be one to two pages in length.

Explanation / Answer

Small companies can’t wait like 2, 3 or 4 months long to clear their payment. Need to rotate money is much high. Eventually, slow payments will dig financial problems.

Solution to avoid above problem- (a) Provide Easy finance options- EMIs- Equated Monthly Instalment, so that consumers don’t feel much of load to pay back.

(b) Do tie-up with local and reputed finance companies

Purchasing too many Units (finished/ semi-finished/ raw material) is a dangerous dance for any small scale business. If demand of products is running low in market and workforce is not that efficient and fast to turn your inventory into cash, then it is good to avoid piling of such inventory.

Solution to avoid above problem- (a) Rotate inventory in smaller lots/ volumes

(b) Optimize your local supply chain/ develop a warehouse location in such way that Inventory handling costs are lower and is easy to deploy your inventory in store and push back in case of returns or lower demand conditions.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.