Business plan for value creation
The Corridors Connecting Plans Method© was developed for companies that face a significant change in circumstances. Examples are significant growth strategies, a change in the composition of financing, a start-up or a change in laws and regulations.
The way the company plans to deal with such situations should be judged against its strategy in order to determine whether there is actually a potential for value creation.
Without a focus on results and proper execution the company will be stuck with nice plans that only use up money.
Orientation
The company usually initiates growth strategies. Autonomous growth is normally the result of planning, acquisitions more often arise from an opportunity that presents itself. In the case of autonomous growth, financing generally involves the need for working capital, but an acquisition frequently necessitates additional financing options. Working capital for stand-alone projects can be a tricky business, since there may not be alternative uses for the funds because it is a tailor-made solution or because there is an increased risk due to lack of experience with the way it works.
The need to strengthen or maintain a sound balance sheet structure may arise relatively quickly when new plans are implemented. This can be dealt with through the use of subordinated loans or an equity injection. It is important to be aware that without such financing the company may not be able to realize the expected growth at all. This type of financing usually changes the relative power in the negotiation regarding the allocation of additional value creation, especially if the latter is made possible to a large extent by the financial commitment of an investor.
It may be necessary to find a different source of financing due to a decision by the finance provider to refocus activities. This could be a trigger for a company to assess the soundness of its own business model.
For a start up the risk profile is usually a reason to look for a finance provider that understands the business model in order to avoid losing unnecessary time.
It is essential to understand one's own bargaining position to be able to achieve a match with a suitable provider of finance: approach this issue as a value creation moment.
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Decision
It is essential to approach the new situation from a pragmatic plan. An integral part of this should be a check whether the current organization and its team are ready for the new situation. Maximization of value combined with sound risk management is vital for the company as well as the finance provider.
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Action
Identify the skills and activities that should enable the growth spurt. Summarize them in a pragmatic plan and evaluate subsequent developments regularly in order to be able to adjust where necessary.
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Explanation of the solution
Knowledge of the chain and competitors (market analysis)
In order to assess the potential, an analysis of the market is essential. The question whether it is possible to obtain a position that is both profitable and sustainable needs to be answered.
Internal organization
Daily affairs demand a considerable amount of attention, which means that internationalization may end up with a low priority.
That is unnecessary if one is willing to accept flexible solutions. During the course of the project the company should make sure internationalization obtains a secure place within the organization. Therefore, at least one of the company’s employees should fulfill the role of internationalization champion and act as a linking pin between the internationalization project and the rest of the organization.
Access to a network
Building a network requires substantial efforts. Gaining access to an existing network in which one is able to make use of established links can save a lot of time and increase the chance of success.
Corridors BV is happy to open up its network to its clients.
Competences: The necessary competences and sectors are covered.
Partner: jellow and its corresponding structure.
Budget
Government subsidies and other support have become increasingly rare. It would be unwise for the company to proceed with a project that is not viable without such help. A sound budget is called for, even if the project is staffed entirely by the company’s own employees.
Partners
Because the foundation has been laid and the company is in a more advanced stage of development, an extension of the network of business partners can be supported if the company so desires.
Explanation of the solution
Decision-making and uncertainty
Decision-making is up to the company’s management of course. However, based on our knowledge and experience we can contribute the necessary elements. This is merely to facilitate the process.
A transparent environment contributes greatly to a solid decision-making process. The highly pragmatic Corridors Connecting Plans Method ©is particularly suitable to support proper sharing of information.
The company is the focal point.
Potential difficult to estimate
Companies operate in a dynamic environment and decision-making is not an exact science, just like in other strategic matters. A careful process that measures progress is the maximum achievable.
Solution : Keep the project highly adaptable and plan for milestones at which an evaluation will take place, to facilitate an adjustment if necessary.
Company size
Companies from a small country like the Netherlands are often smaller than foreign players. In many cases this leads to tensions in relations, for example between a parent company and its foreign subsidiaries.
This factor should be taken into account, particularly if success is likely to be highly dependent on the bigger party.
Explanation of the solution
Value Creation
Looking for financing? Make optimal use of the momentum by strengthening the company’s team and giving it access to financing based on a sound plan with strong execution power.
Team
The activity plan is an essential part of the Corridors Connecting Plans Method©. It establishes commitments that should lead to concrete actions. This is a good way to ensure that everybody is on the same page. Moreover, it provides a basis for evaluation and, if necessary, adjustment. Everything is oriented toward optimizing the chance of success through proper preparation.
The activity plan
The activity plan is an essential part of the Corridors Connecting Plans Method©. It establishes commitments that should lead to concrete actions. This is a good way to ensure that everybody is on the same page. Moreover, it provides a basis for evaluation and, if necessary, adjustment. Everything is oriented toward optimizing the chance of success through proper preparation.
The financing
To the extent that additional financing is necessary, our method is designed to find the right form. This should be tailor-made, since the main focus is on the company and the financing is a means to support it in its endeavors to maximize value creation.
Even if there is no immediate need for additional liquidity, financing is an integral part of the plan. This way the company is well prepared should financing suddenly become an issue, for example in the case of a strategic partnership.
Advising and liaising
Many companies experience failure despite serious potential. A good adviser that is able to turn that potential into concrete action reduces the risk that your company falls into this trap. The adviser is critical but constructive, has a helicopter view and specialist project management skills. Our advisers are selected on the basis of these requirements. To benefit from our support, the company needs to be prepared to embark on the road to self-reliance.