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Home » Business And Finance Articles » Boost Your Business With Effective Financial Management

Boost Your Business With Effective Financial Management

Working Capital, to put it briefly, refers to a business organization's total current assets (short-term ones), marketable securities, accounts receivables, inventory, and cash. Management of the financial segment is a great responsibility that demands equal attention on investments as well as sources of income (both long term and short term). In fact, a business firm can never enhance its value if it fails to survive initial hiccups in the short run. Hence, efficient management of finances is essential for any business to survive.

Strategies to finance short-term working capital needs much greater attention than are usually practiced. Precisely speaking, there are two short-term working capital financing options; business cash advance programs and short-term commercial mortgage loan programs that have been often overlooked. But these two working capital funding options are excellent for small and new business ventures to ward initial financial obstructions off their way. Business cash advance is one of the best financing options for businesses accepting credit cards as mode of payment. Speaking of benefits, business cash advance offers great help even to prospering businesses. For instance, even thriving businesses need working capital that might not be borrowed from a bank. Under these circumstances, business cash advance or merchant cash advance programs come to the rescue. Retail chains, bars, and restaurants, service businesses are highly benefited from these finance programs.

Receivable factoring or "credit card factoring" is another unique working capital management strategy, whereby the businesses sell their future receivables at a discount. However, it is not possible for all small businesses to document their receivables in order to qualify for this financing option. The documented sales volume and credit card sales activity of these small businesses serve as financial asset to attain a business cash advance or a merchant cash advance.

Not negating the importance of short-term working capital loans, it is also necessary to understand the importance of long-term working capital management. While planning to finance your business long-term, make sure to get hold of a long-term commercial mortgage for at least 15-20 years. In a few cases though it becomes essential to avoid long-term commercial mortgage loans and opt for its short-term counterpart. This would especially be applicable for those who intend to sell or refinance their business within one to five years. In fact, availing short-term commercial mortgage loans comes with the added advantage of negating prepayment penalties and "lockout" fees, normally associated with long-term loans.

There are few lenders providing effective services for both these financial strategies. Hence, working capital loan in the form of business cash advance programs or commercial mortgage loans should be chosen with great care.

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What Is Lean Six Sigma

Lean Six Sigma combines the quality improvements that come from using Six Sigma with the speed improvements that come from using Lean manufacturing principles . Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process -- from manufacturing to transactional and from product to service. Lean manufacturing focuses on improving the speed of a process and the elimination of waste primarily by eliminating non-value added steps. Lean Flow and Six Sigma are strongly compatible. Combining these two powerful process improvement methods are combining the contents of two toolboxes that can help your organization improve quality and efficiency.

Lean Six Sigma and Lean Flow initiatives go by many names, including Lean Enterprise, Lean Manufacturing, Lean Sigma, and Lean Service. These concepts are a natural complement to Six Sigma and can be applied to every type of business and process. Both Lean and Six Sigma have points of commonality in their strategies and methods. Both are built around the idea that businesses are composed of processes that serve customer needs. They share the goal to identify and eliminate sources of waste and activities that do not add value, in order to create flow with maximum productivity, capacity, and throughput. Both place great emphasis on training to bring members of an organization to a high level of understanding and expertise on the tools and processes of the methodology. Also, both lean and Six Sigma require and encourage the engagement of management and key mentors within the organization to assure that the prioritized projects are executed as part of a way of doing business.

Lean methods and data are used to reduce costs, shorten cycle times, expand capacity, and improve productivity. Lean concepts and the Lean Flow system quickly identify improvement opportunities through the use of value stream mapping. Lean emphasizes all-encompassing principles together with targeted recommendations to achieve improvements. However, Lean principles are oftentimes inadequate to solve some of the more complicated problems that require advanced analysis.

Because Six Sigma requires in-depth statistical metrics to analyze quality at all levels of the supply chain, eliminating defects it can improve all Lean methods. Six Sigma â€" when combined with Lean â€" allows for easier identification and quicker resolution of quality issues or problems, and reaps quick results while opening people's eyes to new and better possibilities on plant floors. Six Sigma's core implementation strategy of establishing dedicated Six Sigma champions and black belts who oversee and mentor process improvement projects provides crucial structure and guidance, thus greatly enhancing Lean initiatives. Therefore, Six Sigma is very valuable when introduced during the deployment of Lean principles to ensure that the improvement roadmap includes a generic problem-solving approach.

Lean Six Sigma creates greater understanding of the value of your work by defining it as something that your customers want to pay for. Lean Six Sigma helps build customer loyalty by driving improvement in areas most important to your customers. Its metrics generate clear targeting of customer needs, and drives real, tangible value creation.

Lean Six Sigma is a highly sustainable approach that becomes woven into the fabric of the organization and involving people at all levels - from the executive suite to the front line. Full deployment of Lean Six Sigma will f oster an environment of continuous improvement where the cultural norm of your organization becomes striving for the total elimination of waste through a succession of small, action-oriented ( kaizen ) events within the production process.

Lean Six Sigma fulfills your overall strategy and future success by significantly improving quality and reducing waste. It empowers every employee with new ways of thinking about your processes and helps make drastic improvements to the organization's performance. Lean Six Sigma creates a powerful linkage from your strategic priorities to operational improvements and facilitates the transformation of a business.