Maybe you have already faced the following questions:
- Can my company afford a larger investment next year?
- Will this investment generate an added value?
- How high is the synergy potential in new investments, purchases or reorientation?
- What is the liquidity situation for the following years?
In turbulent times, factors mount up, and the company must react accordingly. For instance, the effect on liquidity or equity capital depends on factors like market environment, exchange rate, regulatory environment, funding, capital expenditure on extension, payment of dividends, etc. These items cannot be adequately created with the help of planning on a stand-alone-basis – all factors must be taken into consideration in the integrated overview.
The purpose of good planning should not just be to move to the next step of your project or to get financial support, it should be more about creating a helpful planning tool, and a prospective business concept. With such an integrative approach, it is possible not only to optimize your capital, liquidity and save costs – it also can help you to manage your risks properly. Many such questions should not be considered separately, because a lot of different aspects are closely connected and interdependent.
Planning tool for strategic decisions
When operational realignment is looming on the horizon, or in case of a big investment, the effects on company value must be analyzed in advance. Often companies become active when a transaction must be dealt with (it happens in acquisition, or rather with the intent of acquisition). It usually takes time, as the human and time resources are short, and as a result colossal amounts of money are spent on consultants and solicitors. With the right strategic decisions, it is possible to set the correct course in advance, which in the long-term perspective, reduces costs and strengthens one’s position in negotiations. Strategic decisions influence a company’s course of action for several years ahead, and can be corrected only with major allocation of resources. That is important enough to take the necessary time in making the decision.
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- Financial Planning Under Uncertainty: Convincing Investors
- How do I create business plan that will convince investors?
- Financial Planning: Typical Mistakes of Start-Ups
- Financial Planning For Analysing Capital Requirements
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