Updated on August 10, 2017 by admin
You have a business and you want short term working capital but you don’t know where and how to source it from? Business is full of uncertainties. Risks may occur in your business anytime that require finances.
Four Sources of Short Term Working Capital
1.) Your Own Savings
You can get short term working capital from your own savings without having to worry of paying any interest. But this amount may not be substantial enough to meet all the short term requirements of your business as it is usually small.
2.) Apart of the Long Term Borrowing
The long term loan you had borrowed can be used partly in financing short term requirements. Sometimes this amount may not be available as it’s already fully utilized.
3.) Bank Loans
Banks are the major lenders of money for short term periods. They lend loans for six months. This means that you have to pay them all their money plus a certain percentage of interest within the period of six months. You can obtain from them the secured or unsecured loans depending on the relationship you have with your bank. You may also take an overdraft or cash credit from your bank.
4.) Accounts Receivable
It is the smartest way of raising short term working capital especially if your business is always selling goods on credit basis. Here, the mercantile credit plays a great role in boosting your business transactions. You sell the goods on credit and your customers accounts are debited with the same amounts.
On the basis of your customer’s accounts receivables, you are able to get loans or advances from factors. When the money is received from the factors against these accounts, it’s termed as receivables financing.
Two types of Receivable Financing
A.) Ordinary Account Receivable Financing or Non Notification
This is a system of short term financing. You enter into an agreement with the financing institution which agrees either to purchase the non notification or advance you a certain amount of money against such non notification. Your customers are not intimated with this arrangement.
This is the arrangement whereby the factor buys accounts receivable (sundry debtors) of your business and assumes all the risk of non-payment. There is an agreement between you and the factor. The factor pays you money against your customer’s debts.
Five Differences Between Non Notification and Factoring
1.) Factoring assumes liability of bad debts while in non notification the seller is responsible for any bad debts.
2.) Factoring is responsible for the collection of bad debts while in non notification the seller is responsible for collecting them.
3.) Factoring forwards the invoices to your customers while in non notification the seller is the one sending the invoices to customers.
4.) In factoring the customer is informed while in non notification the customer is not intimated.
5.) Factoring is notification of accounts receivables financing while ordinary account receivable is non-notification of account receivable financing.…
Updated on August 10, 2017 by admin
Starting a limousine rental business these days is seen as a good investment choice. As the tourism and hospitality markets have been stable for decades, this investment venue is seen as a sector that will continue to experience steady revenue growth.
Although the competition is currently stiff, there always seems to be room for operators who are reliable and provide good-quality service that most customers look for. Limousines serve as an elegant and comfortable means of transport, and these are used for a wide array of events and occasions, such as corporate parties, proms, weddings, bachelor parties, city tours and out-of-town excursions.
The Limo Rental Industry Has A Lot Of Potential Clients
According to current data from Limousine and Chauffeur magazine, the breach of potential limo rental service customers are in the following areas: hotel and resort clients, night-on-the-town transportation, corporate shuttling, weddings, funeral transport, proms, and other Occasions. The business is usually broken down into two major aspects: Corporate / professional clients and occasional customers, and most rental firms specialize in either one or both.
Corporate customers span a wide range of businesses that use these services for ferrying their executives, clients and customers. Much of this service involves airport-to-hotel transportation, as well as shuttling clients to restaurants, theaters and other entertainment venues. Corporate clients can be at times, more demanding than the standard client. These people expect prompt and reliable service, particularly when the need suddenly arises.
Keeping Clients Satisfied Ensures A Successful Limo Rental Business
If you so wish to invest in this type of business, you need to do all you could make your customers happy, and satisfied. Be prepared to do a great deal of cold-call selling to capture these lucrative accounts, which include corporations, law firms, investment firms and banks.
As the occasional customer usually celebrates some sort of event; Whether it's a birthday, anniversary, wedding, bachelor party, office party or prom, you need to be prepared to serve the needs of diverse groups of people and events. Your advertising needs to focus on your ability and desire to make any kind of event feel special and memorable.
As with any type of business, you need to do a lot of research before you start operating. It is good to understand your competition, your target market, and the specific area you wish to operate. You also need to be creative in determining how you are going to make your service unique, and different, or better than the competition.
Once you're in operation, you need to ensure that you can facilitate inquiries, handle different sales accounts, deliver professional service and provide information to your prospective clients on a 24-7 basis. Your customers also need to get their questions effectively answered, and place orders at their convenience, without having to let them wait in line either on site or on the phone. You also can build and enhance customer relations by staying in touch with them via e-mail, or through opening an online website.
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