“Resources,” Starting and Growing My Business (2014), 122–24
“Resources,” Starting and Growing My Business, 122–24
Resources
Can I Afford More Assets? (Part I)
Choose roles and act out the following:
MARIA: Naomi, I decided to buy more chickens. I need more productive assets to grow my business.
NAOMI: That sounds like a good decision to me. So can you afford the chickens?
MARIA: Afford? Yes, I’m getting a loan for the chickens.
NAOMI: How much are you thinking of borrowing?
MARIA: The loan would be 1500.
NAOMI: Why 1500?
MARIA: Well, I know someone who is selling 15 chickens for 1500. It is a good price.
NAOMI: Why 15 chickens?
MARIA: That’s just how many he has.
NAOMI: Do you have enough cash flow for 15 chickens?
MARIA: Yes … well … um, I guess. I don’t know.
NAOMI: What are the monthly payments?
MARIA: I talked to one lender, and he said it would be 275 per month.
NAOMI: Do you have enough available cash each month to make the payments?
MARIA: I hope so.
NAOMI: Maria, you can’t just hope. You need to know that you will have enough available cash to make payments.
MARIA: But, how would I know?
Back to page 108
Can I Afford More Assets? (Part II)
Choose roles and act out the following.
MARIA: Naomi, thank you for showing me how to find out how much cash I have available. Loan payments of 275 per month would have been very bad for me. I would have run out of money in the third month. I would not have been able to make payments. I could have lost my business!
NAOMI: Oh, Maria, I’m so glad we looked at your available cash before you got a loan.
MARIA: Me too. But how would I know how much I could afford?
NAOMI: Well, let’s try it again with a smaller loan.
MARIA: Ok. I’ll try looking at a loan with payments of 150 to see if I can afford it.
Back to page 113