Financial

On the surface, doing business today is not much different from doing business in the past. The fundamentals are generally the same. Provide a service or product to sell, advertise it, find a buyer, exchange payment, and resupply inventory. Even though the fundamentals have remained the same, the underlying processes that keep the system together and in check have grown in to a many tentacled beast. Instead of a simple “Here's some money, thank you for the product!” transaction, businesses have to consider credit, foreign exchange rates, and national and international tax rules and regulations. These new problems affect local businesses as well as international businesses. Products are produced and manufactured all over the world, which means even the local grocer down the block may have to factor in costs relatively unheard of in the past.

Kudler Fine Foods is a small grocer that specializes in foreign, high end, hard-to-find specialty food items. The business has expanded from one store to three stores in under five years. The original store opened in 1998 in La Jolla, CA. Two years later, the second store opened in Del Mar and in 2003, the third store opened in Encinitas. Kudler wants expand to locations outside of CA and wants to set up a web presence with an online e-commerce shop (Kudler Fine Foods, 2003).

With one store, Kudler’s financial needs were simple and straightforward. The owner was in charge of making purchases and keeping track of inventory. With a simple system that involves few people, keeping track of finances was a matter of writing down or recording in a spreadsheet, incoming and outgoing transactions. The single store did not require many employees or staff so payroll consisted of multiplying the hours of the few employees by their individual wages, taking out the predetermined amount of taxes and recording it on the spreadsheet. Running one store didn’t require a large amount of checks and balances.

Opening a second store in a...