Finance & Funding
Finance & Funding
Sound financial planning and analysis are critical to any company’s success. Both top and bottom line growth are essential for building sustainability. How is cash driving your business?
Areas of Focus
• Cost Analysis: It takes a proactive approach to identify where cost reductions can be made without compromising the integrity of the operation. There are many areas to consider, and it’s important to look at these regularly to keep unnecessary costs to a minimum.
• Revenue Analysis: Top line revenue is critical. Creating a model that maximizes income through product, pricing, and sales alignment is a foundational pillar for ensuring sustainability in your business. To accomplish this, regular measurement is required to know where, when, and how cash is coming in, and to be able to make iterative improvements accordingly. There is no room for complacency when dealing with the lifeblood of your business.
• Profit Analysis: Just as sales and marketing must work together for the greatest results, so do revenue and costs. The formula for greater profits includes the discipline to manage both of these consecutively. Developing an accounting framework, a process for regular review, and utilizing software to build efficiency and ensure accuracy, are just some ways to ensure your business stays on a path of profitability.
The Profit and Loss (P&L) statement is an important report for any business that can help leadership understand past performance and help guide future decisions. Imagine the extra cash you could have leftover if you optimized revenue generation and cost reductions across the organization.
Budgeting and forecasting is an essential part of planning to ensure future success. analyzing past numbers, future forecasts and budgets can be created that provide tangible goals worth striving for.
• Budgeting: Budgets are proven to reduce unnecessary expenses. Sticking to an attainable budget is key to sustaining profitability and keeping costs under control.
• Forecasting: Creating detailed forecasts that accurately reflect past performance, current trends, and future initiatives can be extremely useful in aligning the organization around tangible numbers. It’s important to remove ambiguity and get everyone aligned on future goals down to these details.
There are times when outside investment makes sense to accelerate your business. However, there can be many pitfalls in the process, so it’s important to understand your options. Each situation for capital is different, and should be considered as part of an overarching strategy to help your business reach its goals. Due diligence prior to taking any outside capital is critical for longer term success.
• Lender & Investor Strategy: Determining what capital the business needs and why is a crucial first step. Outlining the return on investment is another important step. Don’t underestimate the need for a compelling story that will showcase your strength, and give them reason to engage.
• Capital Acquisition Strategy: Identifying and effectively reaching your target investors is a notable sales initiative that takes significant care and planning to get right. These are potential partners that may be with you throughout the duration of your company, so you’ll want to make sure you engage with the most trustworthy and viable.
• Lender & Investor Documentation: It’s important to have key documentation in order, such as organizational paperwork, financials, past performance, and future strategy to ensure you are taken seriously, as every serious investor has a diligence process that incorporates these items.
It’s safe to say that not all investors are equal. Choosing the right ones to engage with is vital. It’s important to understand the different types of investors and lenders that exist, along with their specific expertise as it relates to your business, and the type of capital structures they contribute. This is not an area where you want to risk going in the wrong direction.
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