|Tools & Equipment||3,400|
Advice to Kay
From the forecast I created, I can advise Kay to ensure that the business inflows are more than the outflows. It will ensure that the business does not run out of cash. Moreover, it will assist the corporation to continue with its operations smoothly. More inflows for the firm will support it to get loans in the future. Most financial institutions lend money to companies with good cash inflows because of their ability to repay the amounts borrowed. For months with low or no projected revenues, an explanation should be given about the issue. As a result, the business can use such information to rectify the situation in the future. For instance, the estimates income for November was small. Besides, the corporation never anticipated making any money in December. Kay must also increase their monthly loan repayment amounts. The measure will ensure that the amounts borrowed are paid on time without any delays. As a result, financial institutions will continue giving Kay credits whenever a need arises.
Additionally, drawings should only be taken whenever it is vital. Otherwise, Kay should spare these amounts for expanding her business. Currently, the $ 800 drawn every month is very high, and if the amount must be drawn, it should be decreased to lower amounts. Finally, it is vital for the business to reduce its cash outflows (Parker,2006). Since it is a small business, it should only incur those expenses that can sustain the operations of the company alone. Failure to observe this rule can lead to the collapse of the business. All these measures will ensure that the firm continues with its operation without any interruptions.
Kay’s Promotional strategies
Kay can increase awareness about her business through advertising. However, the approach she uses depends or her wish or the available marketing channels. In this case, she opted to use the yellow pages as her advertising tool. It is not the best option to promote her business since it is new. The information cannot reach a large target audience since very few individuals read the yellow pages. Also, it might take some time before someone locates where the advertisement is found inside the book. She has an alternative to promoting her products through mass and social media platforms. In this case, Kay should consider the 4P’s of marketing before deciding the advertising media to use. The demand for her products will also determine the platform she can use to advertise her items. If more customers need them, the use of mass media such as radio and television will be appropriate.
Kay’s business is new, and she is not expecting to charge higher prices for her products. It is, therefore, advisable to use social media platforms like Twitter and Facebook to promote her products. This might be better than the use of yellow pages as the message will reach a large audience. Another issue that should be considered is the distribution channel that Kay intends to use to deliver the goods to the customers (Penman, 2006). If most of the clients are situated near the business premises, she can market the products via word of mouth through the use of posters. Also, the use of free samples and discounts can enable the business to increase its revenues in the future. The last P is in Kay marketing strategies are the promotion. Kay can use diverse approaches to promote her products such as direct marketing and personal selling to persuade the clients to buy her products. This can help the business to increase its sales soon.
Kay should not pay for the government officer’s trip before being awarded a contract. Such an act is against the law as it breaches the procurement regulations. Such an action is likely to influence the decision of the officer. Therefore, he or she can sway the judgment in favor of Kay. She intends to use £2,000 and get £15,000 per year. This is bribery because it is designed to influence the official to award Kay the contract. As a result, other bidders competing for the offer might be disadvantaged as it might be given to Kay. In this case, Kay should avoid the proposal because it is against the law. She should compete fairly with other individuals or businesses that might have the desire of being awarded the contract. The use of short-cuts to get a contract breaches the law and should be avoided.
Several moral matters may affect Kay’s business. One of the problems is her integrity. The issue can undermine her truthfulness because people and organizations might not trust her anymore (Dickinson,2011). As a result, people might avoid doing any transactions with her in the future. Another ethical issue that can have an impact on her business is the lack of fairness to others. This is because she took a decision that was to benefit him without caring about other people. She wanted to use her little resources to convince the senior official to award her a contract without passing through a competitive process. In the future, companies might blacklist her from the list of people who should get deals. Therefore, it means that her business can lose business thus, experiencing huge loses.
Another moral issue that can arise from this case is honesty. Kay’s character is not desirable especially in the field of business where individuals are expected to be morally upright. This can make other individuals and businesses to lose confidence in her. The loss of trust among her customers can lead to the collapse of her company. This is because individuals are reluctant to do business with people who are not honest (Jensen, 2003).
Moreover, the lack of respect for others can create an antagonistic relationship between her business and other competitors. For example, the individuals who were competing with her for the contract will not be happy with her. The lousy relationship can affect the operations of her business since the industry stakeholders must cooperate. In this case, she can suffer the isolation of other individuals in the sector.
Besides, her character portrays her as a person who does not follow the law. The disgruntled stakeholders may argue that she could have followed the due process before being awarded a contract. If she is prosecuted, Kay will pay a huge fine which will hurt the business (Fildes, 2011). This is because she can use some of the resources belonging to the company to pay these penalties. Therefore, Kay can experience cash flow problems in the future. Thus, Kay might not be able to pay for her debts when they fall due.
Consequently, she may not get loans from financial institutions such as banks. Moreover, her business is at risk of being closed should she be jailed for her crime. Kay runs her business alone, and she might lack a competent person who can run the business on her behalf.
Dickinson, V., 2011. Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), pp.1969-1994.
Fildes, R. (2011). Forecasting. Los Angeles: Sage.
Jensen, M.C., 2003. Paying people to lie: The truth about the budgeting process. European Financial Management, 9(3), pp.379-406.
Penman, S.H., 2001. On comparing cash flow and accrual accounting models for use in equity valuation: A response to Lundholm and O’Keefe (CAR, Summer 2001). Contemporary Accounting Research, 18(4), pp.681-692.
Penman, S.H., 2006. Handling valuation models. Journal of Applied Corporate Finance, 18(2), pp.48-55.
Parker, R.J. and Kyj, L., 2006. Vertical information sharing in the budgeting process. Accounting, Organizations and Society, 31(1), pp.27-45.
Velasquez, M.G. and Velazquez, M., 2002. Business ethics: Concepts and cases (Vol. 111). Upper Saddle River, NJ: Prentice Hall.
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