Whilst considering a specific or overall business strategy (be it the sale or purchase of a business, a major capital investment or a management buy in/buy out) an important part of these considerations will be to understand the likely financial impact of your planned course of action.
The construction of forecasts, budgets or projections provides you with insight and enables more informed decision making as to whether a particular strategy should, or could, be implemented. It will also add clarity as to what level and type of funding might be required as well as the effects on cash flow and working capital.
We would work with you to ensure that your projections are robust, well constructed and driven by a mutual understanding of how the business works in practice. As part of this we would highlight the key assumptions and input variables utilised, as well as building in sensitivity testing, in order to ensure that the causes of certain outcomes/results are clearly identified.
We will help ensure your projections are realistic and achievable as well as indicating where the risk areas are that may need careful financial management (if any). Projections also allow for smarter financial management via the comparison of actual results against those originally predicted. This often leads to better controls being implemented where there are potential causes for concern. They can also be used to set target benchmarks for management in order to assist in the growth of the business.
Financial models will almost certainly be a requirement of third parties such as investors, banks other finance providers and will need to be credible when subjected to the financial scrutiny of those potential stakeholders. A result of our working with you to test the initial draft documents will be a final projection that will increase the chances of a successful outcome for both you and those external entities.