This document discusses risk management strategies for businesses facing cash flow issues. It suggests exploring options like obtaining funds from stockholders, banks, or generating profit from customers. Banks will only lend if a business demonstrates capacity, capability, collateral and favorable market conditions. Ultimately, risk management is about building trust between a business and its lenders through transparent financials and prudent spending on expenses, assets, and materials.

1. Risk Management
per chi produce
Dick Lam

2. Financial Crisis

6. Cash is King
In retrospect,
• Was there a day in the past that I did not
have any cash issue?
• Why? When you have sufficient or
more than enough cash, what did you
actually do?
– ………..
– Yes.

7. Where to get money?
• Stockholders
• Bank
• Business
– Profit
– Customers
– Suppliers
– Assets
– Employees??

8. Stockholders, do you have money?
• Yes
– But, why don’t you invest?
– No problem. Can I get back the money?
And when?
• No
– Then, what should we do?
– Fight or Flight?

9. BANK
A bank is a place where they lend you an
umbrella in fair weather and ask for it back
when it begins to rain.
Robert Frost (1874 -1963), US poet

10. 4C principles
• Capacity - the ability of the owner/manager/business,
as lending to a project=lending to the person
• Capability - the feasibility for the project to make
profit and cash flow to pay for the interest and
repayment of principle
• Collateral - guarantee for the loan
• Condition - the market atmosphere on the business
sector

11. It is all a matter of TRUST!
Trust
You &
Your Business
But, why should I believe you?

12. Business
• Profit = Sales – Cost – Expenses
• Customers: A/R
• Suppliers: A/P
• Asset: True Value

13. Where to burn money?
• Operating Expenses
• Capital Expenditure
• Raw Material

14. Business takes risks,
Need to master the risks