Financial Management of a Small Handicraft Business: Introduction

Financial Management of a Small Handicraft Business

Acknowledgements

Introduction

I. Cost calculations in the handicraft industry

I. 1. Production costs

I.2. Overhead apportionment

I.3. Selling and distribution costs

I.4. Ways to reduce costs

II. Pricing

II. 1. Value in the market

II.2. Costs and pricing

II.3. Contribution analysis

III. The concept of working capital

III.1. Defining working capital

III.2. The role of working capital

III.3. Performance measurement

III.4. Profits

IV. Financial planning and decision making

IV. 1. Management Accounting

IV.2. Planning for working capital requirements

IV.3. Releasing cash from other assets

IV.4. Working capital decisions

Conclusion

A manual of credit & savings for the poor of developing countries

Introduction

The origin of this pamphlet is a series of training programmes organized during my period in India as Oxfam Trading's representative. It looks at the basic approach to product costing and pricing, and the internal financial management of a small scale production unit. The objective is to assist such units to achieve profitable production, to gather the financial information necessary for planning and decision making, and to meet their working capital requirements.

Some common financial management topics are omitted. For example, it is assumed that a small handicrafts production unit would not undertake significant capital expenditures, nor seek alternative investments. The concentration throughout is on day-to-day operations of a business with a social purpose.

The pamphlet is intended for use by course leaders who have a basic understanding of the subject matter. It is hoped that it might provide useful resource material for training sessions aimed at managers of small businesses.