Learning Team Reflection Essay

Alan Litchman and Laura B. Trust, Co-Presidents of bring off a Bagel, own a bagel business in Boston (Parrino, Kidwell, Bates, 2012). Alan and Laura met in business school and afterwards gaining business experience in other industries they purchased the bagel business with the figure of catching it as much as possible. They hire two primary quill target markets 1) retail stores and 2) wholesale accounts with large institutions. In this paper, we will shortly discuss a few of the strategies they used to manage their working capital. The owners of Finagle a Bagel were tired of working for other people so they decided to buy one new-fashioned business. They have used several(prenominal) financial concepts to manage the financial accountability of their small business. They have controlled cost from the beginning of the process to the deli precise of the product, as well as the administrative costs.Other items that have been highlighted are the management of hard cash range, p ayback, and the schedule of cash entries, which has allowed the keep company to pay its debts. They have established a good kind with the banks in order to negotiate the time frame for payments and rate. Suppliers are in any case a key success featureor for the company, as the payment foothold are negotiated to match the flow cash. The companys focus is to agree its financial management so that the business may grow and impart large profits. The Finagle a Bagel as well has a insurance of recognizing the hard work of their employees. The owners believe that managers and employees are responsible for the success of the company. Together, the company is growing in a sustainable and financially healthy way. consort to Alan Litchman, when making any investment, first one has to understand what the demand for the new product is going to be, and what kind of product can be do with the new equipment (Parrino, Kidwell, bates, 2012).Alongside his wife, Mr. Litchman explained how imp ortant it is to understand the companys motion and opportunities to better apply capital investment in the company. They both explained, in their own words, the importance of setting up strategies and planning before putt a new product on the market. The gibe also intercommunicate about debt. Laura Trust said that debt is a necessary evil and sometimes taking debt has its benefits if compared to finding capital through other means, such as pursuing a partner (Parrino, Kidwell, Bates, 2012). In this case they did not postulate to take a venture capital partner because the owners wanted to have authority when making business decisions, thus avoiding working for someone else (Parrino, Kidwell, Bates, 2012). This shows that the owners cull a business structure like a sole proprietorship. Lastly, the fact that sideline rates have been dropping for small business also supported their decision to take on debt to invest in the company. The couple is very educated when making busin ess decisions, as they understand that even so when a company has financial resources, the business gains more by obtaining financial resources from banks with small interest rates, while allowing the resources they have to generate dividends with higher interest rates.This is generally called borrowing cheap money (Investopedia, 2014). Finally, credit is also discussed. They mentioned heap credit, which is the amount of time given to pay back vendors for the products bought. The longer the term, the better, as it allows time to receive revenue before having to pay the debt. This is another very important recommendation on how to properly use cash flow and avoid taking on debt. Overall, Alan Litchman and Laura B. Trust demonstrate a thorough understanding of how to manage their capital so that their small business continues to grow and increase their net profits, despite economic challenges in the community and the country.ReferencesInvestopedia. (2014). inexpensive Money. Retri eved from http//www.investopedia.com/terms/c/cheap-money.asp Parrino, R., Kidwell, D., Bates, T. (2012) Fundamentals of Corporate Finance, (2nd Ed) John Wiley & Sons Inc.