How to Prepare for Your Companys Financial Future

Sooner or later, most business owners need to look for outside financing. Whether it's a line of credit with a bank to handle predictable cash crunches or a significant capital investment to improve plant and equipment, virtually every business will need access to additional funds at some point in its life.

But the time to start thinking about how to make the best impression with bankers and private investors ideally begins long before you schedule an appointment to discuss your financing needs. In fact, the best preparation you can undertake to get the financing your business requires is the very same work that you should be doing to ensure that your business is financially sound in the first place. Business owners that can consistently demonstrate their ability to effectively plan the future of their company will stand out in the crowd of more haphazard entrepreneurs.

Here are several things that you can do now to ensure that your search for outside financing will be successful:

Determine Realistic Rates Of Growth: Unless you're the next Amazon or eBay, "pie-in-the-sky" projections about how quickly your revenues will grow will usually be seen as so much wishful thinking. Effective financial planning requires you to develop your business around realistic growth rates. Otherwise, you'll wind up in the hole before you even begin.

Develop Pro-Forma P&L's, Cash Flow Reports: Once you have estimated what your revenue picture will look like, you can more accurately predict what your financing requirements will be. Put together projected profit and loss statements and cash flow estimates so that you know exactly how much financing you'll need and when you'll need it.

Write Your Business Plan: Contrary to popular opinion, written business plans are not just for those who are looking for venture money. A well-written business plan can be an effective planning and management tool for every business. Often, the very act of writing about your business forces you to think through complex strategic issues, reevaluate your critical business assumptions and identify other areas where careful analysis will strengthen your chances of success.

Revise, Revise, Revise: Take a look at your plan and your projections at least once a year, and revise them according to actual results. If your performance falls short of your expectations, analyze why you failed, implement the necessary changes in your business strategy and adjust your projections to more realistically forecast future results. Likewise, if you were too conservative in your projections, don't be afraid to scale up your targets.

Keep Your Finance Contacts In The Loop: A good relationship with a banker or outside investor should be developed over time, not simply when you have the need. Keep your financing contacts up-to-date with what's going on in your business by providing regular financial reports and by meeting with them periodically to apprise them of how things are going. The more knowledgeable they are about your business, the more comfortable they'll be in providing you with the help that you need when you need it.

William von Achen is president of Strategic Management Resources, an executive coaching and management consulting firm offering advice and counsel to business owners and senior executives. For more information visit our web site at http://www.smrweb.com

---

How to Use an HR Consultant

Bringing an HR consultant into your organisation can often be... Read More

Action Learning: Its More Than OJT

For centuries companies have used on-the-job training (OJT). OJT works... Read More

Use Noncompete Agreements To Protect Your Business

Q: One of my former employees has launched an online... Read More

Allowing Employees Responsibility

Merely assigning a task with detailed instructions is not effective... Read More

Are You the Culprit?

Are you a business, non-profit or association manager who pretty... Read More

Communicating CEOs

I see a PR firm has done a survey on... Read More

Another Use for Meetings

Every meeting is a laboratory where you can observe and... Read More

When Change Is In the Wind...Heads Up!

In these days of takeovers and mergers, of downsizings and... Read More

Why Saying Well Done Works

Encouraged by the recognition, Sarah Lewsiton went home from work... Read More

Innovation Management: Radical Innovation

Creativity can be defined as problem identification and idea generation... Read More

OJT - On The Job Training

IntroductionManagers have two powerful ways of improving the performance and... Read More

Does Your Management Style Remind People Of Something They Read In Dilbert?

With thanks to Jeff Foxworthy, the comedian who does the... Read More

Auditing Improves Effective Planning

Speak of operations assessment, and we'll hear its significant value.... Read More

Dialogue vs. Discussion

Have you ever sat in a meeting where everyone is... Read More

Get Meeting off To a Great Start

When asked what part of their job they find a... Read More

IT Expenditure - Why Businesses Spend Huge Amounts on Ineffective IT Investments

Another IT White Elephant!It seems that almost every day we... Read More

Three Business Lessons From The US Postal Service

There was a buzz in the air recently about the... Read More

5 Awesome Actions of Highly Creative Leaders!

How many times have you wondered why you are unable... Read More

4 Simple Steps to Successful Delegation

Last month, my featured article was about creating a "Stop... Read More

Innovation, Idea Selection, Valuation

There is no sure fire route to commercial success, but... Read More

Help for the Meeting-Weary Manager

Most of us have found ourselves working on a team... Read More

How To Conduct Effective Meetings

Before you call your next meeting, the FIRST step is... Read More

Get Down With OCP: Evaluating DBA Job Applicants in an OCP World

Not long ago, weeding through DBA applicants with a tech... Read More

Power of Pinpointing Accountability

I have always said that if I were to write... Read More

5 Tips For Creating Great Jobs

1) Create A Powerful "Mission Statement"-When your business mission is... Read More

People Are Our Most Important Asset!

How many times have you heard or uttered this phrase... Read More

Coaching Champions at Work

I saw Brian Kerr (the Irish national football coach) on... Read More

Employee Motivation: Make Everyone A Cheerleader For Your Company

Do you manage by walking around? What do you see?... Read More

Optimizing Your Cash Flow With Proper Accounts Receivable Management

Businesses miss on growth opportunities and even close their doors... Read More

Getting to Consensus

The need to get people in an organization to pull... Read More

How to Get Your Procedures Project Done

Wouldn't it be nice for business owners and executives to... Read More

Employee Turnover: Is It Eating Up Your Profits?

Keeping the cost of doing business down, yet providing a... Read More

Being a Great Boss

Are you one of those bosses that people just love... Read More