Business Finance Test
Looking for Capital
Issues that need consideration
prior to looking for additional capital. Is your own house in order? First,
review the 13 major reasons
businesses fail .
Next order our
Business Finance Test Report (#3)
to review the non financial indicators of a strong or weak business.
This self administered test is one we use on turnaround consultations
as a baseline for further corrective action with a company in trouble.
Key areas covered include the following types of questions:
- Liquidity: Is
the company current on Federal and State Withholding Taxes?
- Growth, Profitability
and Control Systems: Does the company have program to quantitatively
measure customer satisfaction?
- Management: Is
it multiplying or dividing your business equation?
- Does the CEO
interact with all levels of staff and management?
- Is the turnover
of management staff greater than 20% per year?
- Does the Board
of Directors bring constructive ideas for growth to meetings?
- Has the ratio
of debt to equity changed over the last year?
- External factors
that indicate trouble
- Does your
banker call often and request additional collateral?
- Does the CEO
spend more than 10% of his time on legal matters?
- Is more than
35% of the company's operation dependent on one vendor or one customer?
- Is the company's
pricing policy tied to the dominant firm in your industry?
- Are you familiar
with the Z Score for your company and industry and know where you stand
Note: the Z Score
was developed after many years of analyzing companies and their financial
dynamics. This formula takes into account the income and expense,
balance sheet and cash flow statements. Z Scores can accurately predict
(95% probability) the likelihood of a company health or slide toward
If you are just starting
your own business
Most startups do not
spend enough time in the pre-incorporation stage. There is always pressure
to get incorporated, get some money and get started. While we agree this
is important there are other issues that should be decided first.
- Starting with
the most important the goals of the founders and the exit strategy.
- Next comes the
business format compatible with the goals of the founders.
- Next how the business
now and in the future might integrate with the founders and future stockholders
tax and estate problems.
- Buy/Sell Agreements
for shareholders coming and going, key person insurance and valuation
methods for future capital exchanges, buy backs and new stock sales.
For a complete strategy
to get your Pre Business Plan and Business Plan strategies in alignment
and to better attract investors check out Report
goal is to provide you the best funding tools available and to get your
Venture Planning Associates,
of the hundreds of sites offering business plan products and services, your VenturePlan
site is among the best, if not the best. "
Mike Rischard CPA, President, Agilecor
we received first round funding ($5 million) the VC firm asked us to show
how our financial models were created. They wanted to use OUR TEMPLATE (which
we developed from the 7 Venture Capital Reports) to help them evaluate alternative
scenarios for their portfolio companies!" Michael
.Lay, CFO, e-Commerce Internet Company
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