If you’re a long-term reader, you may have noticed a trend in our posts. Our goal is to help our clients achieve cash flow stability through long-term planning once their immediate cash flow needs have been achieved through strategic financing. One of the ways to do this is by monitoring your company’s long-term planning.
Like most areas of life, financial operations respond best to clear directions and objectives. Strategic planning presents an opportunity for creating and monitoring long-term goals in addition to more immediate short and mid-term goals.
Create a Financial Roadmap
Strategic planning is the roadmap that provides a sense of direction for your company to achieve the objectives set in your mission and vision statements. Without taking the time to establish the plans, you’re on a journey with no direction and may never achieve your goals.
Once long-term strategic goals are established, these plans allow the company to set metrics to act as mile markers against which the company can compare its actual results.
Be Proactive vs Reactive
Strategic planning allows your organization to be proactive rather than reactive. It gives you the ability to anticipate and plan for unfavorable market conditions rather than scrambling to find cash at the last minute. This lead time can save you money on interest rates and allow you to save cash reserves for lean months.
Forecasts are a large part of being proactive. Cash forecasting based on historical data and company objectives is crucial.
Generate Operational Efficiencies
When monitoring your long-term plans, you’re able to observe where spending can improve and set up budgets for upcoming expenditures. This generates opportunities for operational efficiencies. Consistent monitoring of metrics shows where you are on the roadmap to achieving your company objectives, allowing for course corrections as needed.
Realistic objectives paired with a strong foundation of continually reviewing metrics leads to the opportunity for valuable insights. These insights set the direction and motivation for the next round of long-term business planning.
Increase Market Share and Profitability
Is your goal to have 30% of the market? What about scaling so that you have a 15% profit margin? Do you know how you compare to your competitors or even to your prior period? Metrics that monitor your strategic plan provide valuable insight on market share, market trends, and the success of your product offering.
Your insight will allow the company to direct marketing efforts to support a profitable result. The company can take the knowledge of where they are and devote resources to best achieve their ongoing business goals.
Company Resiliency
Strategic planning and monitoring your company’s metrics help build resiliency. Rarely is business a steady upward climb with steady profits. The business cycle ebbs and flows in waves of profits and debt. A solid long-term plan with consistent review allows company leaders to build strong foundations, focus on what works and throw out what doesn’t in an efficient decision-making process.
Company resiliency is built through exploring emerging threats and opportunities and understanding how these relate to the company’s mission and vision.
Liquid Ally Difference
At Liquid Ally, our primary goal isn’t a short-term solution to your cash needs. Our goal is to aid you with your strategic planning and achieve your company mission and long-term vision. We work hard to vet hundreds of lenders to ensure we’re able to match your company with the best financing package that meets your needs now and in the future.
To find out how we can help your company meet its long-term goals, schedule a Complementary Liquidity Assessment.