Kay Elise A.

Davide Finance 1 (TTh 10:30-12:00 NN)

BSA 1 – Block 16 Ms. Roselyn Degamo

AN OVERVIEW OF FINANCE
Prelims Output

Mr. Santos is about to establish a new family business. He had prepared a list of activities to be
carried on by the different would-be units and departments. He assigned Tony, his eldest son, to be the
finance manager. If you are Tony, what would be your concerns about the activities listed by your father?

I. Marketing Function
A. Analyzing market competition
Competition is inevitable in doing business, this is why it is important to determine
the strengths and weaknesses of the competitors within the market for the to-be established
business be one step ahead of the competition. It is crucial to properly analyze and study
the competitors because it arms the business with the ability to quickly identify industry
trends, adapt to competitor campaigns and develop strategies that’ll provide the business
an advantage.

B. Choosing a suitable location

A good location is just as important as the products and employees. The place where
the business would be situated could determine whether or not the business makes it. There
are a lot of factors to consider in choosing the perfect location for the to-be business. One
should gather information about the population demographic and economic characteristics
of the areas and never forget to identify the businesses near the interested area. The
visibility of the business should be considered like putting up an educational supplies store
near a university. An important factor that needs important discussion is the location costs.
Besides the rent, consider all costs involved when choosing a location. Questions such as
does it cover the cost of building maintenance, utilities and security?, should be taken into
further discussions.

C. Analyzing consumers’ demand and preferences

This activity is one of the top priorities that needs to be thoroughly deliberated
because it is what keeps the business moving forward. The first thing to do is to determine
the target market in order to put the focus onto this market. There should be an initiative to
figure out the needs and wants of the customers through surveys, test groups and feedback
on social media and reviews. If there are any issues or concerns provided by the customers
then there might be a need to improve the product/service or provide a new product/service
to be offered.
 D. Advertising and publicity
Since it is the start of the business to enter the market, it is difficult to get the name
of the business be known. This is where advertising and publicity comes into action. Start
by identifying who are best prospects, and then determine the best way to reach them.
Considering the costs and the lack of measure of using traditional advertising methods such
as billboards and brochures, it is much preferable to engage in cost-effective advertising
tools by using the digital tools especially when the prospects are millenials. Having a
working website is important for marketing a business. The website will serve as a lead
generation tool, online brochure, catalog, and information source for the potential
customers. However, if it is too complicated to put up a website it is more accessible and
easy to use the social media such as Facebook and Twitter. In fact, Facebook is a friendly
site for new businesses since they allow businesses to put up their online advertising banner
in people’s timeline.

II. Finance Function

A. Sourcing of capital
When thinking of where to find a start-up capital, the bank is usually what comes
into our mind. However, nowadays, banks have become so conservative with their cash.
There are so many things taken into consideration before any business loan is approved.
That is why it’s better not to be too reliable to banks to fund the business. Your first investor
in the business is no other than yourself. Either with your own cash or with your own assets
that will be useful to business should you consider to invest as capital for the business.
With proper business plan, friends and family members might be the closest one to
approach and gain support for raising the start-up capital. Finance companies are also
options that the business can use to get capital. These companies are there to give small
loans to small business owners. Getting access to fund for the business requires an
analytical and creative look beyond the traditional sources people.

B. Forecasting and analyzing cash flow

There should be a proper cash flow management in order to regularly monitor the
financial health of the business. For small businesses the most important aspect of cash
flow management is avoiding extended cash shortages, caused by having too great a gap
between cash inflows and outflows. There should be a developed plan and strategies that
will maintain an adequate cash flow of the business.

C. Keeping record of monetary transactions

Indeed, recording the day-to-day sales, purchases and other transactions and
keeping them is a must. Avoid getting the personal transactions and business transactions
mixed up. This is to ensure to get the proper financial information and for an appropriate
financial decisions.
 D. Budgeting of available funds
Since budgeting is one of the activities listed, a budget plan should also be
prioritized. Using this tool, the business can track the cash on hand, business expenses, and
how much revenue the business need to keep it growing. There are also other reasons why
a budget plan is ideal. One of it is because employees may be privy to the budget it helps
them understand where the business is going and fuel their motivation to work harder.
Budgeting the available funds mainly keeps the business disciplined in doing financial
transactions and do activities that would be of help of the business in the future.

E. Keeping track of debts and credit transactions

Just like how it is important to keep the monetary transactions, keeping track of
debts and credit transaction is also necessary. Keeping track of the expenses of the business
will help the business knowing their limitations in spending or lending the money. Keeping
a record of such would be helpful in assessing whether the debts and credit transactions
matched to the business priorities. It would be easy in making changes when the business
have noticed issues in the business operations and financial health. Financial software
programs or just simply a notebook would do just fine in keeping the records.

F. Paying of taxes and insurance

My concern for this activity is the importance of the value of honesty. Honesty in
reporting the income and the taxes to be paid should be a habit in the business as what the
saying goes, “Honesty is the best policy”. It is a big responsibility for the business to be
paying taxes and insurance that’s why it should be done accordingly.

III. Operations Function

A. Acquiring machinery, furniture and equipment
In acquiring the necessary assets in the business, the first thing to do is to list down
the possible costs of the to-be bought things. There should be a proper budget allotted for
the acquiring of essential machine, furniture and equipment. In picking for the necessities
for the business, one should consider the price and the quality of the machine, furniture and
equipment. It is important to be critical and analytic in choosing such because it would be
giving the business future economic benefits.

B. Determining supply of materials needed

For an effective selection of the materials needed for the business, research and a
plan is needed. There should be a thorough discussion whether the material is an essential
for the business or not. Again, the price, quality and the budget of the business should be
put into consideration when deciding the supplies needed.
IV. Human Resource Function
A. Hiring of qualified workers and employees
Hiring the right employee is a challenging process. Hiring such pays the business
back with employee productivity, a successful employment relationship, and a positive
impact on the total work environment. When hiring qualified workers and employees, it
should be specifically define the duties, responsibilities, necessary skills, outcomes, and
work environment of a particular job for this will serve as a guide in the choosing process.
The usage of a checklist for hiring an employee is also necessary because it helps
systematize the process of hiring. Another important aspect to consider is the pre-screening
of the possible candidates. A candidate may look good on paper however, a prescreening
interview will tell if their qualifications are truly a fit with the job.

B. Training of new personnel

In training the new personnel, proper business ethics should be inculcated. The new
personnel should be trained on the specific procedures at the company, what is expected of
them, how they will be evaluated, and how to avoid common mistakes. Training them is a
great idea in order for the newly hired employees to get on board with the business’ vision
and mission. Also, don't forget to listen to their ideas about how to do things differently.
By listening to them, you encourage creativity and innovation. Remember to treat the new
personnel as family in the business.

C. Scheduling of work
Drafting a work schedule for the new personnel isn’t easy. The work schedule
should be in accordance to the requirements provided by the Department of Labor and
Employment. The business should avoid exhausting the employees with hectic work
schedule because they won’t do well in the operations of the business. It is also essential
to know the employees well. In doing such, gives the business the freedom and the
flexibility to mix and match skills, strengths, weaknesses, and personality types to create
the perfect shift for any situation.