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Financieel Management

The business plan is a very important document and its main objective is to help raise finance, but it also serves as an aide-mémoire for management in focusing their mind on their ambitions for the business and how to achieve them.

A clear, concise, well-presented business plan is an important factor in securing investor confidence in the management team and the business. The business plan is also the basis for determining the funding structure and the offer price.

The business plan is thus primarily a sales document and should demonstrate management’s commitment to the buyout. It must represent management’s conception of the business and its prospects. It demonstrates how the business will be managed after the buyout and how value will be created for all the shareholders.

The business plan contains detailed financial projections incorporating profit & loss accounts, balance sheets and cash flow statements for a period of up to 5 years. The projections should be positive, credible and specific. It is generally not appropriate to outline funding structure.

Potential investors and banks will wish to read the thoughts and philosophy of the management in whom they may invest. Consequently, the management team should write the ‘heart’ of the business plan. The financial adviser will review the plan and projections critically and constructively and can assist in the actual writing.

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