Financial Projections
Funding a business is an important choice that a business owner should make. To support the American Beef Cattle business, the company will find reputable i nvestors and have enough experience dealing with companies (SBA, n.d.) . The company will also secure business loans using its business premises. The company’s desired position in the debt and equity ratio is four since it has invested in many assets and its operation. The company also realizes its potential and the value it will gain from increasing its business operations. The company will be provided with capital funds by money lenders, such as banks and other private firms, and its shareholders. The money gained will be used to operate as capital. Also, leasing will play a greater role in the business; the company needs a small amount of money only to pay for the use of machinery used and its premises, thus better liquidity. Besides leasing and loans, the company will engage the outside investors to raise capital for the business.
The company will enact proper strategies to help curb business risks that are likely to occur. It will keep adequate funds to provide a reliable rock hedge against any risk that can occur. Also, the company will diversify its production to reduce risks by spreading the business across multiple classes. Managing risks will ensure that the company can pay its debts. This will involve improving business receivables and managing payables. This will increase the production speed, turn inventory into receivables, and receivables into cash. Moreover, this improvement will be achieved by offering discounts to the customers, prompt invoice issuing, and monitoring the incoming payments. While establishing the business, the company will consider two crucial assumptions. First, the company will develop presumptions concerning its common business environment to focus on interest rates and demographics. Second, the other assumption relates to the business where it focuses on the business capabilities that it must develop and maintain.
Delegate your assignment to our experts and they will do the rest.
Monitoring business using KPI's is essential to ensure appropriate and timely decisions and plans can be developed. American Beef Cattle will monitor business equity and profit margins to the extent to which the business's ratio relies on external borrowing to find the operations. It will also monitor the ratio in which the business makes a profit in reflection on the cost of sales and the product pricing policies. The company will use the following procedure to ensure efficiency; first, the company will set corporate goals and determine policies and procedures that will be applied to attain the goals set. Second, the business information will be consolidated by gathering data and analyzing the pertinent data to manage it better. Finally, the management staff will be involved to determine the measures to improve the business's profitability and efficiency. Additionally, to monitor the business's financial performance, the company will use some key standard measures. The first measure is the liquidity ratio, which will determine the company’s capability to achieve its short-term financial responsibility (INFO, 2009) . Secondly, the working capital will be used to determine the business’ liquidity available in running the daily business operations. Also, asset turnover will be used to determine how the company uses its assets to generate income (Havard, 2020) . Monitoring and measuring the business performance will help the company to attain a higher volume of output and yields by increasing the standard and actual production outputs based on the amount of input in terms of materials for production and labor. Through managing the production inputs, such as reducing resource wastage used in production, the company will achieve around 75% efficiency levels.
B. Contingency Plan
In case the primary plan fails, the company will use the business contingency plan of negotiating for uncommitted reserves. Uncommitted reserves can provide resources that can help buy time for the business until other resources are available. Besides negotiating uncommitted reserves, the company will also identify the threats that might affect business operations, such as a change in government policy. The contingency plan developed would ensure that the business doesn't fail when the unexpected happens. Businesses need certain measures to be taken upon to prevent its operations and other harmful effects (CDC, 2018) . The following measures can be taken: establishing an evacuation plan in advance by marking the entry and exit routes and ensuring they are accessible. The company will keep emergency contact numbers updated, such as ambulances and police and disaster relief agencies. Also, the company will protect the important records of the business to avoid loss.
If some company members leave, there have to be strategies to ensure the business's continuity. First, examine the business plan, such as what happens when a member leaves the company—examining member roles and functions, and capabilities. After pinpointing that, the company will find other individuals to run those duties. This will ensure that the business functions have not stopped. Re-examining the business plan will be another key factor by re-organizing the present team members who have the technical skills to ensur e continuous business production performance. Developing a contingency plan concerning the unexpected disappearance of team members would ensure a continuous production process, and this will enable the company not to disappoint its stakeholders.
References
CDC. ( 2018, November 30). Emergency Preparedness for Business . Retrieved from Center of Disease and Control Prevention: https://www.cdc.gov/niosh/topics/emres/business.html#:~:text=These%20plans%20include%20different%20stages,such%20as%20evacuation%20plans%2C%20procedures
Havard. (2020, May 05). FINANCIAL PERFORMANCE MEASURES MANAGERS SHOULD MONITOR . Retrieved from Havard Business School Online: https://online.hbs.edu/blog/post/financial-performance-measures
INFO. (2009). Measure performance and set targets . Retrieved from Info Entrepreneurs: https://www.infoentrepreneurs.org/en/guides/measure-performance-and-set-targets/#:~:text=There%20are%20a%20number%20of%20other%20commonly%20used%20accounting%20ratios,are%20using%20your%20business%20assets
SBA. (n.d.). Fund your business . Retrieved from SBA: https://www.sba.gov/business-guide/plan-your-business/fund-your-business
