1. Stage 5: Financial planning & structuring
In this workbook, we will undertake a critical analysis of financial planning for your business in order that it may achieve sustainable growth.
This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

2. Reviewing progress Before commencing, we will…
Develop a one page summary based on workbooks 1-4, which will be presented to each other as part of our ‘project catalyst’
Review our Strategic Spiders based on any reflections from previous modules

3. Key Points to Review
We will do the above independently. You may want to include the following:
2/3 Key Industry success factors;
2/3 Strategic Actions - How far have they been actioned? If not, why not?
Review plans and actions.
Review of the Strategic Spider - What actions have been taken? - Who needs to be involved?
The impact made so far by attending the Migrapreneurs programme – on you and/or on your business

4. Bringing our community together
During today, please think about:
Community action – what we can do together for mutual benefit;
What the Migrapreneurs programme might be able to do to assist with your business growth
What the University might be able to do to assist with your business development

5. Our goals for today!
Look at the present ‘post credit crunch’ financial marketplace – the new Paradigm
Gain an overview of the Basics of Corporate Finance for SME business
Your Financial Business Plan – Getting your business ready for investment
The purpose will be to have a critical view of your business from a funders perspective.

6. The Credit Crunch! (i)
The Background - how and why it all went wrong. The growth of the Bank’s :- The basis of securitisation Banks Capital Ratios The difference from previous recessionary influences.

7. The Credit Crunch! (ii) The present position
Trading Businesses vs over reliance on property
Future Prospects
Likely scenarios in the Marketplace The need to be at the top of your game.

8. Financing Scenarios
Company’s raise finance for a number of different reasons. Within your Think-Tanks, please spend 10 mins brainstorming the potential reasons for wanting to obtain some type of financing.

9. Overview of Corporate Finance
Some Key Concepts!
Short Term – Working Capital Management
Long Term – Capital Investment Decisions

10. Short Term – Working Capital
The Working Capital Cycle:
Stock
Debtors
Creditors

11. Short Term – Working Capital
The Effects of increasing turnover (sales) and its effect on working capital.
The funders tool - Net Working Assets / % of Sales
The start of sensitivity analysis.

12. Short Term – Working Capital
Within your Think Tanks, please chose one business and construct the working capital cycle of that business. (10 mins)

13. Long Term – Capital Investment Decisions
What are the factors that effect Capital Investment Decisions? Within your Think Tanks please brainstorm the decision making process when considering a major capital investment. Please take 15 mins and be ready to present your findings to other groups.

14. The Investment Decision
Management must allocate limited resources between competing opportunities (projects) in a process known as capital budgeting.
Making this capital allocation decision involves the estimating of the value of each opportunity or project, a function of the size, timing and predictability of future cashflows.
The concept of looking at each project on a value basis using discounted cashflow (DCF) valuation.
The opportunity with the highest Net Present Value (NPV) will be selected

15. Funding Products Market now vast and often complex!
Traditional Overdraft
Invoice Discounting / Factoring
Stocking finance
Working Capital
Term
Revolving
Bullet
Loans
Fixed / Floating

16. Funding Products (cont…)
Swap, Collar – Premium, Zero Premium)
Interest Rate Derivatives
Soft Loans
‘Supported Loans’

17. Funding Asset Finance Mezzanine Finance Venture Capital
Business Angel Funding
Specialist Financing of International Trade

18. Funders (cont…) Risk vs Reward Curve – Funders Motivations!
Pricing in this new paradigm!

19. Funding Balance Principles of Gearing Debt: Equity Interest Cover
Key to ensure that funding ‘balance’ achieved
The Warning signs when its wrong

20. Security Legal Charges Mortgage Debentures Other Corporate Security
Personal Security – Personal Guarantees (Supported and unsupported)

21. Getting Ready for Investment
The importance of preparing a good Financial Business Plan
Bit of fun but careful presentation is important
Fundamentally, need to cover all the bases
Marketplace demands you being at the ‘top of your game’ and you need to demonstrate this and consider every angle
Consider your short and long term aspirations and how they link in
Ultimate financial goals are very important

22. Financial Business Plan
In your Think Tanks, each describe the financial goals of your businesses both long and short term. Be prepared to share this between the groups.

23. The Bankers Perspective
CAMPARI AND ICE!
Character Interest
Ability Commission
Margin Extras
Purpose
Amount
Repayment
Insurance

24. Getting Ready for Investment
We have talked about different perspectives / ways of looking at our business before (stage 1)
Need to critically look at the business with a view to investment
Upsides/ Downsides
Repayment / Exit.

25. Financial Business Plan: What should be included?
Projections - min 3 years
Includes Profit and Loss, Balance Sheet and Cashflow
Detailed list of assumptions in drawing up these projections (this is key)
Detailed explanation of any key financial events.

26. Fundamentals to Assumptions
Upsides
Margins
Sensitivity
The What if’s!

27. Plenary Before we finish:
Prepare a review of what we have worked on today, in relation to your own business
Set yourself action points to work on before we meet again and share these with your Think Tank
Make any final revisions to your Strategic Spider which may have come up as a result of your reflections today.

28. GET IN TOUCH!
Carolyn Usher: Erika migrapreneurs.eu
This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.