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Introducing the Working Capital, the thief of my silver

This year was better than the past, but I have less money than before ... What happened to my money? Who took her? Why do not I have? This seems the work of Black magician or a disciple of himself Harry Potter, is neither more nor less than what usually happens in micro and SMEs, when all the numbers but say they won silver, silver is not. A track, which has the silver, known as Working Capital or Working Capital, for lovers of international standards.

The problem is not necessarily to win, it just won silver in the format "effective." This gain may be involved in more merchandise to sell or manufacture, or may be owing me my clients. Put aside the goods or machines that could have bought with that gain, as it is very rare not to see that the money was spent on things of this magnitude. Debtors and goods, not are so visible as a car, machine or new deposit.

The Working Capital changes almost daily, purchasing sales, collections and payments we make, and just the name indicates that it is the capital that our company or enterprise needs to work. About

already know that this is the Working Capital, this explanation may seem very vague technique, but in pursuit of achieving understanding that it is for those who see it for the first time, I think it is easier to understand without delving into highly technical issues.

In a simple example that lets us see better what is this "thief of my money," we can say that

"At the beginning of the year had $ 10 cash, debts $ 10; merchandise to be sold for 40 and due to my suppliers of goods other $ 10.

-During the year I sold x $ 100, buy for 50 $ (I sold) and had other business expenses of $ 10, pay what you buy this year, and copper only half of sales .

-At year's end I was left with debts of $ 60, merchandise for $ 40 to be sold, I end up owing another $ 10 to see my suppliers, and how to pay for the merchandise 50 and 10 of the costs and copper only 50, I had no effect. If you win 40 and 10 would have had $ 50 but I have no cash.


WHERE ARE THE $ 40 to win and I have him!! In this example, we are getting into what I need (Debts). While we have won silver in the form of CASH, we will find in our higher working capital. In the reality of each company, may be a little on each side, making it often too complex to find.
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This seems simple in this example, it complicates the finance to more than one company, because if I pay tax on that gain, or give his share to each member of your profit, the money is not literally ! The classic example is having to pay VAT on invoices that have not copper.

A secret, and this black box can eat my money, I also can invent money if necessary. Let's say if instead of increasing my debtors and stock merchandise, increase what I owe my suppliers for purchases made, and obviously won silver this year, will more cash than it did at first. Some businesses finance their working capital with short-term bank loans or use the payments to providers to improve their position. Maybe with this explanation, we can understand why when we demand a payment to a company that we know who wins a lot, we always make the famous bicycle. Or your gain is in the black box and has no cash, or we are using just to finance more cheaply than with a bank ... with the financial crisis and as a reality, pay attention to working capital financing becomes a necessity not suffer unexpected financial shocks.

invite everyone to comment, query or tell about their experiences with the Working Capital, to leave a comment.

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Internationalization Levels of an Enterprise Society

The internationalization of a company is difficult to measure or diagnose. See what happens in other countries, can serve as a parameter to compare that situation are domestic firms.

In Germany, as an example, we can see that all companies are more girls that are designed from birth with a clear international vision. While it is possible that within the development strategy, is not expected for some years to make investments to meet international demand, from birth, large and small, are ready to bring their product to the world, with FOB prices export, international catalogs and knowing that your product is to be prepared and shipped.

course the German state encourages this scenario, removing any bureaucracy as possible for the employer, as Unlike our country, in Germany, there is no need to hire a customs broker, becoming the state, from every seat of the Customs, who will provide everything you need to export the product. For some reason is that German companies fail to develop as they do, and Germany compete for first place (along with China) the world's leading exporter.
To measure the level of internationalization of a company, we can establish 5 levels that allow us to orient ourselves in that level are working. Logically are approximate, and may be that some cases are not strictly in a single level.

1 - Level 1: companies have not worked abroad, either because they were born recently, or because their structure or product will benefit from the opportunities abroad. We find entrepreneurs, small businesses and large number of service providers

2 - Level 2: find companies that have had minimal contact with foreign trade, more by necessity than by having been proposed. At this level, the world has helped us eventually to supply us with a product that did not exist in the local market (or even the total cost of import suggested that the lower value of the product in the local market), or have exported a product, by peak demand.

3 - Level 3: At this level we find many companies that have a more habitual, interaction with foreign trade. Importing or exporting products offered or demanded, not by a specific need, but as an alternative business. Working with other foreign companies in a customer-supplier relationship.

4 - Level 4: Foreign trade is interpreted as a development strategy in the long term, firm, and represents even more relevant to the operations conducted in the local market. They have strategic alliances with suppliers and customers, working with representations of the products, sharing business strategies, while respecting the brand, culture and objectives of the manufacturer.

5 - Level 5: international companies, or multinational, their knowledge, capital and value added, have offices or investments in joint ventures (with foreign partners). Participate in Joint Venture, and other forms of association in any country to present business opportunities. This level is reached in Argentina by large enterprises, or SMEs that have failed and developed over time, a successful internationalization process.

Finally it should be clarified that there is a possibility that the same company, being at level 5 for some countries, strategies performed at 4 or 3 in others, as this will depend on the importance of a country with which we work, and the interest generated for the company. Beyond strategies have three levels, the company achieved without doubt the level 5, and that's where it should be considered.