Financial, Strategic, and Business Planning Services
Maximize Operations for Business Optimization (View)-
Forecasting: helps determine cash-flow, capital, and investment resources for inventory, payroll, liquidity, and expansion management.
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Budgeting: establishes strategies on spending; set up budget line items.
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Strategic Planning: applies to long-term, 3-5 years planning of ongoing concerns specifically for the reallocation of assets and to achieve strategic goals and objectives.
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Business/Marketing Plans: provides business planning services for new start-ups, feasibility studies, site planning, marketing, and corporate formation and structuring.
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Financing/Funding Proposals: develop loan packages, corporate capitalization strategies, and private placement offerings.
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Planning and Economic Development: provide planning assistance to communities exploring reinvestment and revitalization of commercial strips, site location, and development.
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Site Development: provides site location assistance to businesses planning to start up or expand current facilities.
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Economic and Community Development: provides a plan for small communities or businesses addressing economic development and community needs.
Financial
Management:
Explanation
For The Client
The financial
management of a business is a key to building
value for the owners or stakeholders. It encompasses the whole spectrum
of
business operations, including the management of both current and fixed
assets
that are to be financed through short‑term, long‑term debt, or equity
financing.
Since capital
is limited,
profitability turns on how the capital is divided among the various
assets.
That is, on how effectively the limited capital of the business is
utilized to
produce profits. Since
the use of
capital entails a cost, the other side (liabilities) of the balance
sheet is
just as important as the asset side. Profitability also depends on the
effective use of available sources of capital, and on achieving the
proper mix
of financing at the lowest cost to support the investment in the assets
of the
business.
The business
owner or strategist must understand that the
major goal of financing management is not "profits," but rather
increasing
the overall value of the business to its owners.
Profits are merely part of the value building
value; owners and strategists must assess the present condition of the
business. Only through a careful analysis of where the business has
been and
where it is now can sound plans be laid for future growth.
Utilizing
Financial Management
The budgeting
and forecasting process can proceed when
accurate financial information is in hand. The business owner or
financial
manager must project where the business will be at a given point in the
future. This is
necessary so that the
required level of assets and the best mix of investments can be
determined and
the groundwork laid for securing the best financing mix to support the
required
level of investment.
Proper
management of working capital (the current assets of
the business) is critical to the success of any business, regardless of
its
size. Investment in
fixed assets may be
critical to the long‑term success of the business, but it is the
day‑to‑day
management of working capital that determines whether the business will
remain
in existence long enough for the investment in fixed assets to pay off.
The business
owner or financial manager must strive to
obtain the optimum financing mix for working capital and must balance
risk
against return in deciding on how to divide working capital among
current
assets. Investment
in each current asset
(cash, marketable securities, accounts receivable, and inventory) must
be justified
by the returns achieved at degrees of risk acceptable to the business's
owners.
Working
capital, of course, must be financed.
Owners or shareholders in their contribution
of equity capital usually supply initial working capital requirements
to the
business. As a
business grows, however,
the amount of current assets needed to support the business also grows. If additional capital
contributions are to be
avoided, other financing sources for working capital needs must be
developed.
These other sources may include financing generated by business
operations in
the form of earnings and trade credit.
However, when
that is not sufficient to meet working capital
needs, the business owner or financial manager must look to external
sources,
such as banks, financial institutions and other commercial lenders. With respect to the
various outside sources
and means of financing working capital needs, each has its own
advantages and
disadvantages and may entail different costs. Not all are available to
every
business.
Long-term
Capital Budgeting
Turning to the
longer term is primarily concerned with
capital budgeting decisions and methods for evaluating proposed capital
expenditures. As a
first step, it is
necessary to develop a long‑range business plan. One object of such a
plan is
to examine where the business is now and where it should be at a given
point in
the future.
Once goals and
objectives are established, capital budgeting
decisions can be made as to the most effective means of achieving them. However, capital budgeting
is not concerned
only with acquisition of assets and expansion.
The business owner or strategist also must be alert to
signs that assets
have become obsolete or are no longer productively being used in the
business. The goal
is to achieve the maximum return
possible on all capital tied up in fixed assets.
In regard to
achieving maximum returned on fixed assets,
real estate assets present special management and control problems.
Even though
real estate may be necessary to business operations, operational
considerations
need not detract from the investment potential of real property assets.
Financing
Fixed Assets
On the other
side of the balance sheet, the fixed assets of
the business must be financed through some combination of long-term
debt and
equity financing or special financing tools.
An important consideration in establishing the long‑term
"financing
mix" is that the optimum mix of debt and equity is not static.
The mix
provides the best return to the business and its
owners commensurate with acceptable levels of risk and necessary
changes as the
business and external influences on the business change. The key to effective
response to changing
conditions is to build as much flexibility as possible into the
long-term
capital structure of the business.
The fixed
capital of the business will consist of debt and
equity, each of which has its own advantages and disadvantages. Furthermore, there are
various types of both
long-term debt and equity financing that may be available. In addition there are
hybrids, such as convertible
securities, that may contain elements of both.
However, not all types of financing will be available to
all businesses.
Potential
Sources of Capital
The strategist
will construct the optimum financing mix
within the constraints imposed by the nature of the business and
conditions
within the capital markets. Regardless
of whether additional capital is required in the form of debt or
equity, the
business owner, manager, or strategist will be dealing with
representatives of
various capital suppliers. These
sources
are discussed at length for consideration, as are investment bankers
and
brokers; who serve as intermediaries in meeting the long-term financing
needs
of the business.
Long-term
financing, which is sought in the form of
additional equity capital, may come from the investing public. The
decision to
raise capital through a public offering should be made only after a
thorough
evaluation of the possible advantages and disadvantages of such a move. Following the initial
decision to go public,
the actual mechanics can be quite complex and burdensome. Details include selecting
an underwriter and
writing of the registration statement.
In addition, the
business must know what can and
cannot be done between the initial filing and the effective date of the
offering. Finally, the company, now publicly owned, must plan
strategies
to meet its new rights and responsibilities.
