The pace of change in todays business environment is inarguably staggering. Growth of e-commerce; changes to business structures; evolving relationships; changes to funding arrangements; access to capital and its sources. All occurring at increasingly exponential rates. Fast. The fact that there is more computing power in the average notebook computer today than it took to put a man on the moon should illustrate how fast things change Jawaan Taylor Jersey , and whether in senior management or a business owner you need to keep pace.

In particular, you must stay abreast of changes in your competitive environment, and remain fully apprised of mechanisms that will enable a response fast enough to keep you in the game. This article will look at one of those mechanisms, access to capital and through that, free cash flow. In doing so well use an intuitive framework, peppered with some economics. Why? Intuitive analysis is ideal for answering specific questions; in this case What will best enable my firm to manage rapid changes to competitive economic conditions and stay in the game??And Ill use economics because of Steven Levitt Josh Allen Jersey , Americas most outstanding economist under-40, who along with Stephen Dubner considers that if morality represents how we would like the world to work, then economics represents how it actually does work.?

By speaking to specific anchor points, strategic issues affecting the access to capital problem can be explored and initiatives developed to allow a timely solution. In short, its the fastest and most accurate way to answer the question you face, because its easier to understand and doesnt get bogged down in extraneous Yannick Ngakoue Jersey , unnecessary analysis.

One of the anchor points in contemporary business is access to capital, especially when it helps maintain free cash-flow. In many respects they are one and the same thing, the difference merely being access to capital is a necessary precursor to free cash flow (you cant use it until you have it). And everyone needs it. Payroll, materials, overhead, and debtors taking anywhere from 45 to 120 days to settle their accounts Leonard Fournette Jersey , using your firm as a surrogate line of credit.

Access to capital becomes an even larger issue in the business environment described earlier, where speed to market and the ability to tool-up?(increase production) are crucial to meeting ever shrinking delivery timelines. Many of us have experienced the elation of being awarded a large tender, something that will fill the order book for the next six months, immediately followed by the hangover that comes with the realization that the firm will struggle to fund the project based on existing and forecast cash flow.

Small-to-medium enterprises encounter particular problems when it comes to cash flow and capital access to fund growing operations, to the point where lack of access is an issue that can threaten continuing operations, even in a rising market. Balance sheets take time to build Taven Bryan Jersey , and it is against this security that banks will lend.

Developing initiatives to tackle this problem involves looking at some existing options and making a comparison, arriving at a decision that best enables a solution to the problem at hand. In this instance, a comparison of bank funding against invoice factoring provides insight into possible solutions for the capital access cash flow problem.

Everyday economics can inform this comparison, particularly the study of incentives - how people get what they want, or need, especially when other people want or need the same thing. Lets start with banks.

Bank lending requirements are invasive and restrictive. They often engender a feeling that you have to bare all?to borrow a nickel. They would naturally dispute this claim Jalen Ramsey Jersey , but lets return to the incentives ?what is their incentive for lending you money? To earn a return off your efforts. Certainly nothing short of this, and these days they also use lending as a lever to win the biggest share of your wallet?from their rivals, trying to have you as a customer for life, growing with you and your business.?When you add the fact that a surplus of people requiring credit exist in the market, they can afford to be choosy and do the economically rational thing ?be risk averse. Risk aversion drives the mortgage a bank puts on your house to ensure they get paid, and is what drives them to lend against strong balance sheets. They look at balance sheets in an accounting fashion Telvin Smith Jersey , weighing up tangible, realizable, liquid assets like cash and real property, apply a formula and lend in accordance with how the result stack up against their risk matrix. Your continuing success is of interest to them only to the extent that it enables you to service (and ultimately repay) your debt, generating an ongoing margin on their investment.

An overly simplistic description, the point being to illustrate that all of this takes time Nick Foles Jersey , and is structured around heavy regulation and evaluation constraints. Lots of time, and lots of influential rules. First, for you to build your balance sheet, and second, to get it appraised to a point where your banker might open or extend your credit facility. During that time, the window of opportunity to fund that large project Jacksonville Jaguars Hats , manufacturing expansion, or operations in a rising market quickly passes, leaving you out of pocket your application fee and if successful, servicing an even larger debt you might not need.

Turning to invoice factors, the incentives might seem the same, but how they view obtaining their return is slightly different. While banks rely on their acumen in accurately predicting your ability to repay a debt Jacksonville Jaguars T-Shirts , invoice factors rely on their skills in accurately assessing the ability of your customer base to pay you. A lower perceived risk aversion with invoice factors plays a small part, but it is how the factor views the overall situati<p. Cheap Jerseys Free Shipping Cheap Authentic Jerseys Cheap Authentic Jerseys Cheap Wholesale Jerseys Wholesale Soccer Shirts China Wholesale NHL Shirts China Cheap NFL Hats Cheap NCAA Shirts Cheap College Shirts Cheap Basketball Hats