Speaking

I am an invited speaker at events around the world, large and small.

I am asked to speak for two reasons. First, I speak on the boring topics that are so critical to every business owner’s success. And, second, I bring them alive with humour, stories and laughter.

Here is a sample of the audience comments from a recent speech on cash flow. Yes, cash flow!

Fantastic speaker I really enjoyed this speaker and topic.”

“Absolutely loved it.”

“So inspiring! Really great resources, he’s so generous and that is simply amazing. Encouragement and just a good kick in the pants.”

Excellent and engaging speaker.”

“Really engaging.”

Great interaction!”

“Very interactive speaker, honest. Really great! :)”

Alex was funny and engaging and made finances and strategy easy to understand.

“Fantastic speaker.  I really enjoyed this topic and it was helpful.”

“Alex is an amazing presenter, very personable and took the time to reach out personally to those he could / in need.”

Please email me to learn more about how I can add a spark to your meeting or conference.

Bio

Alex Glassey teaches business owners and their advisors the fundamentals of business success including strategy & innovation, business planning, sales growth, and cash flow. He shares his articles, courses, webinars, videos and software with tens of thousands of entrepreneurs, bookkeepers, accountants, consultants and educators around the world. Alex is the author of “Customer Dreams” and the designer of StratPad and the EnBA. Alex lives in Victoria, Canada with his wife, Renata.

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Alex Glassey professional head shot

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WORK WITH ME

I love nothing better than working closely with creative, ambitious small business owners. If this is you, then we need to connect.

AG Work With Me image1

Here are eight ways you can access my knowledge and experience. I have arranged these in order, from those that require the least investment to those that require the most. I’d like you to know that I fully guarantee all of my work and products.

  1. Explore my sites. I’ve got lots of articles and videos on topics near and dear to the hearts of business owners.
  2. Subscribe to my updates. I write often but irregularly on how small business owners can win. I write about thinking, focus, leadership, planning, execution and philosophy from the business owner’s perspective. By subscribing, you’ll get my latest thinking delivered straight to your inbox. Learn more (link coming shortly).
  3. Buy one of my products. You can find them all in my store. They represent my best thinking on various topics, including strategy and planning, what to focus on, coaching, lead generation, and more. Learn more (link coming shortly).
  4. Join the EnBA™. This is my virtual classroom, designed to give you the inspiration, training, and resources you need to take your business to the next level. We open registration just three times a year. Add your name to the waiting list so you don’t miss this powerful opportunity. Learn more …
  5. Book me as a speaker. I speak publicly all over the world on topics that inspire and educate business owners and entrepreneurs. Recent topics include “How to create a world class small business” and “Why understanding your customer’s dreams are critical to your business success.” If you have an event you would like me to consider, please visit my speaking page (link coming shortly) then email me.
  6. Join (or host) a workshop. I conduct one- and tw0-day workshops from time to time for business owners. Check my workshop page (link coming shortly) for up-coming sessions or email me to schedule one in your city and country.
  7. Consult with me. If you’re wrestling with a particular issue, question or opportunity and would like to quietly discuss it with me, I would be honored to help. You can schedule some time by emailing me. We can chat just once or tailor something to fit your specific needs including workshops and retreats.I ask you to pre-pay for this consultation as this preserves my time for those who are serious about their business. That said, I offer a guarantee on ALL my products and services; I will cheerfully refund this fee if you don’t believe that you’ve received appropriate value from our time together.
  8. Hire me as your business coach. I love one-on-one coaching, but I have limited time available for it. Therefore, I am very selective. I only work with people who are absolutely committed to success. That said, if you think you would benefit from working one-on-one with me, read all about it here and let’s get started.

Have something else in mind than what I’ve outlined here? Feel free to e-mail me. I would be happy to talk with you.

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OutThink ‘Em!


Get GREAT articles designed ONLY for business owners for FREE!

If you’re like most of my readers, you’re totally committed to building a great business. But the truth is, you’ve never done this before so you struggle with knowing the right things to focus on.

Every week I write new articles for business owners. I explain business fundamentals. Clearly and simply with as much humor as I can. (Hey, this can be pretty boring material!)

Join now, and let’s grow your business better and faster, together:

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WHY YOU NEED TO THINK DIFFERENTLY ABOUT YOUR CUSTOMERS

Do you feel constant pressure from your business? Are you squeezed between customers who want more and competitors with lower prices? Are you working harder and harder and making less and less?

You’re not alone.

It’s Never Been Tougher To Stay In Business

Notice that I didn’t say, “It’s never been tougher to GET INTO business”. Getting into business has never been easier – which is part of the problem. You’ve got a million competitors everywhere which means that your customers have more options than ever before.

I’m sure you’ve tried hard to figure it out. You’ve taken a workshop, or hired a consultant, or bought a business book.

And you know you have a fabulous product or an amazing service.

But none of it seems to make much difference, does it?

Something HAS to change – something to help you find and keep loyal, well-paying customers – or you don’t have a chance.

World-Class Presentation - Amity copy 30 - boats on rocks - small

And It’s Only Going to Get Tougher

Here’s why:

1. More people will start even more businesses – read competitors. The cost of starting a business continues to decline. Employment in government and larger firms is less certain. People are retiring in droves – and then starting a business.

2. Technology brings EVERYONE in the world to your customer’s door. Which increases their choices and drives down prices.

3. Thinking conventionally doesn’t help. It inevitably leads you into a hyper-competitive “transaction box” that squeezes out your profit, your creativity, and your success.

Feels pretty grim, right?

Well, when you’re playing a game and it feels this dismal, you really only have one option…

You Need To Change The Game

change game

Conventional business thinking ignores a fatal flaw: there’s a fundamental conflict at the heart of every one of your customer relationships. You want to get more cash. They want to spend less cash.

This is a zero-sum game. And your customer controls the cash so it’s a game you’re going to lose.

Until you change the game and focus on what really matters. Imagine… If only your customers saw you as a vital partner in their future. If only they didn’t compare you with all of your competitors.

If only they thought of you as a unique and trusted friend. Well, now you can make that happen…

“I had to finish reading CUSTOMER DREAMS at one shot. It was that good. One of the best books for entrepreneurs and should be a must read for any startup or established business. It is well written, very engaging and full of tips that could literally transform any business.”

Ahmed Aljonaid
JAPAN

To Succeed, Focus On Your Customer’s Dreams

Rethinking the role you play in your customer’s life profoundly affects how you think of them and what you offer them. Even better, it profoundly changes how they think of you.

Focusing on customer dreams provides three benefits:

1. You’ll create different, better products and services. You’ll no longer deliver what your customer asks for but what they really need to succeed.

2. You’ll break out of the competitive herd. Your customer will stop thinking of you as “just another supplier”. They’ll look at you as a trusted, long-term part of their success.

3. You’ll experience increased creativity, innovation and profitability. You and your customer will work together and share your mutual success.

“CUSTOMER DREAMS is a refreshingly candid look at the real trials and troubles of a customer-facing business. By deeply examining the role that we each play in the lives of our customers, we learn to differentiate our offering and truly put customers first. But CUSTOMER DREAMS is not a trivial lesson – this is a rock solid look at the way a shift in perspective can transform an organization (large or small).”

David Worrell
USA

Buy CUSTOMER DREAMS and Get Started Now!

This Ain’t Rocket Science – You Can Do It!

Ohio Workshop - cropped small

The difference between Customer Dreams and every other business book is…

It’s not as complicated as it seems.

Your thinking will start to shift within 15 minutes of opening Customer Dreams. And when you get to the step-by-step guide at the end, you’ll be excited to get up the next day and put your ideas into motion.

Sure, there’s hard work involved. But no small business owner that I know (and I know thousands all over the world) was ever scared of hard work.

Listen, don’t take it from me. Take it from the 164 business owners, consultants and educators in 35 countries who read the first draft of Customer Dreams and then told me what they thought. You can see some of their comments down the right side of this page. Go ahead, take a minute and see what they think. I’ll wait…

Customer Dreams consists of an easy-to-read story about a small business owner called Sam Brooks. Sam struggles with the deadly pressure from too many competitors and too many fickle customers. You’ll see exactly how Sam figures things out and revitalizes her business. Yes, it has a happy ending – otherwise I wouldn’t have published the book… ?

After Sam’s story, Customer Dreams breaks down the entire process into three step-by-step sections:

First, it shows how a small business gets caught in the “transaction box”.

Second, it shows the benefits of escaping the “transaction box”.

Third, there’s a step-by-step guide that you can use to make your business stronger.

Customer Dreams isn’t a feel good parable or armchair theory. It’s based on sound fundamentals which have been proven all over the world.

It’s practical. It’s real. And it works.
Book MockUp_white background with contact shadow

“CUSTOMER DREAMS is a breath of fresh air. It has a singular theme, is very easy and enjoyable to read in one sitting, and has ‘real life’ situations and characters that we can identify with. We understand the issue which affects most of us who run a business, and we can clearly see how to think outside the ‘transaction box’ to increase sales, profit and customer satisfaction. This change in thinking is already benefitting us and our businesses. Many thanks Alex.”

Ronny Putnins
AUSTRALIA

Buy CUSTOMER DREAMS and Get Started Now!

If You Are Serious About Building a Thriving Business

If you are determined to succeed as a small business owner, then you must think differently. This is your chance to avoid the ongoing pressure, the frustration, and the wasted time and money that come from wrong-headed thinking.

Trust me, I’ve experienced this frustration myself (several times!) and I’ve seen it in the eyes of thousands of entrepreneurs as we’ve battled to figure out what works…and what doesn’t. All that experience has been distilled into Customer Dreams. It shows you thinking that works and tactics that get results.

Now is your time. You’ve invested so much of your time, energy and money into your business. It’s time to maximize its potential – and change the lives of your customers, yourself and your family.

I would be honored to help you.

Imagine how much better things could be – and let’s get started.

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START HERE

This is a very quick note to introduce myself and tell you what you’ll get from our relationship.

I’m a five-time business owner and a business professor. I live in Victoria, Canada with my partner, Renata Uznanska. I have an MBA from a great school, but I try not to let it get in the way of what I do. ?

I teach business owners around the world all the awful, boring but critically important stuff they need to survive and thrive. Things like pricing and strategy and cash flow and financial statements.

Wait! Don’t go!

I KNOW they’re boring and awful, so I do my best to make them simple and interesting and, yes, fun!

A lot of my tools and information are free. My newsletter, some workbooks and videos, my business planning software: all free. Some stuff isn’t free, like my book and some online courses, which I leave up to you whether to buy or not.

That’s it! Interesting and important information that I guarantee will help you grow your business and become (even more) profitable.

Next step? Just sign up to get my newsletter. You can see the most recent topics on the right. You decide whether to get it weekly or monthly, and you can unsubscribe instantly at any time.

I look forward to learning more about you, and I wish you the very best with your business experience.

Alex

P.S. I invite you to connect with me in other ways, anytime: LinkedIn, email, phone.

 

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Entrepreneur’s Business Accelerator

You’ve started your business. You’re getting some traction. You’re super busy. And you now realize that there are a LOT of things you need to know to be successful!

The EnBA is 17 short, focused, practical, online courses that cover everything a business owner needs to know.

• Each course is self-contained.

• Courses focus on you: you use YOUR business as a living case study.

• Every course is practical: you end up with a 91-day plan that is guaranteed to make a significant and measurable improvement in your business. Or you get your course fee back.

• Each course has between 4 and 7 hours of video lessons and is supported by workbooks and/or worksheets and/or software.

You can take an EnBA course in one of three ways:

  1. GUIDED. Courses are scheduled and run with a live instructor who guides you through the entire process. These courses include live Q&A and live office hours with full audio and video.
  2. SELF STUDY. Self study courses are provided with video instruction that you can take as it suits your schedule. These courses include all of the same content and material of a Guided course, but they have limited or no instructor support.
  3. EnBA SPRING 2016. A very special 91 day guided course that covers much of the EnBA from Strategy to Planning to Cash Flow. Course starts January 30 and ends 91 days later on April 30.

 

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Home | Search | Register | Sign in Funding Needed Looking To Invest Business Ideas Need an Expert Resources All About Angel Investors All About Venture Capitalists Business Funding Resources Small Business Funding Startup Capital Needs Business Plans & Proposals Entrepreneur – New Business The Importance Of Quality Business Plans Viewed: 20995 Times Securing startup capital for your new business can be a tricky process. At this point in time of getting your new business going, your business plans are essential at this stage of setting up your business. In it you will already have scoped out what your money needs are and how you plan to raise the startup capital, and you’ll be using it to persuade potential investors and lenders of the benefits of funding your new business. Your financial calculations in your business plans therefore need to be thorough and accurate and presented with confidence. Everyone expects that they’ll be able to stick to their business plans and only need to borrow the absolute minimum, but more often than not something unexpected crops up to throw a wrench in the works. It therefore makes good business sense to include a contingency element in the amount of startup capital you request. It’s better to do that now and have the extra cash as a safeguard than it is to have to return to your lender or investor not far down the line to ask for more money. If it wasn’t in your original business plans they are likely to be concerned about your financial ability and your request may be rejected. Many people wonder how much startup capital they should request. You want to keep costs to a minimum and invest your money wisely in your new business, while still having the security of a little extra for backup if required. What startup capital you borrow should give you a realistic challenge for your new business but should not be too risky. And back up your calculation with evidence in your business plans, since it has to be credible.  Digg It    Stumble It    Deli.icio.us Related Articles Business PlansQuality Business plansWriting A Business PlanEvaluating The Business PlanNew Business ProposalCreate a Business planBusiness Plans to raise capitalEssentials Of A Business PlanWriting A Business LetterCreating Business StrategyTips For Business PlansQuality business plan About Us | Terms of Use | Privacy Policy Contact Us | Help | User Blog | Links Angel Investor Network | Venture Capital Firms | Raise Capital Find Startup & Small Business Funding © 2010 Go4Funding.com All rights reserved.

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The Importance Of Quality Business Plans


Viewed:
20995
Times


Securing startup capital
for your new business can be a tricky process. At this
point in time of getting your new business going, your business plans are essential
at this stage of setting up your business. In it you will already have scoped out
what your money needs are and how you plan to raise the startup capital, and you’ll
be using it to persuade potential investors and lenders of the benefits of funding
your new business.

Your financial calculations in
your business plans
therefore need to be thorough
and accurate and presented with confidence. Everyone expects that they’ll be able
to stick to their business plans and only need to borrow the absolute minimum, but
more often than not something unexpected crops up to throw a wrench in the works.
It therefore makes good business sense to include a contingency element in the amount
of startup capital you request. It’s better to do that now and have the extra cash
as a safeguard than it is to have to return to your lender or investor not far down
the line to ask for more money.

If it wasn’t in your original business plans they are likely to be concerned about
your financial ability and your request may be rejected. Many people wonder how
much startup capital they should request. You want to keep costs to a minimum and
invest your money wisely in your new business, while still having the security of
a little extra for backup if required. What startup capital you borrow should give
you a realistic challenge for your new business but should not be too risky. And
back up your calculation with evidence in your business plans, since it has to be
credible.


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Home | Search | Register | Sign in Funding Needed Looking To Invest Business Ideas Need an Expert Resources All About Angel Investors All About Venture Capitalists Business Funding Resources Small Business Funding Startup Capital Needs Business Plans & Proposals Entrepreneur – New Business Essential Components Of Business Plans Viewed: 64536 Times Business plans have a well defined form that shouldn’t be changed by anyone. Business plans include several elements that shouldn’t be modified, because otherwise they won’t have the expected results. When you want to write your business plan remember to stick to its original form. Those that will read it will expect to see a certain format. In the case that they won’t notice the elemental components then they won’t take your plan into consideration even if you’ve presented a great idea. The business plans have five fundamental components: the executive summary section, the business section, the market analysis section, the financing section, and the management section. The executive summary section is the first section in all business plans. Those business plans with a good executive summary will have greater chances to be successful. The audience will be convinced to read the whole business plan if you’ll come with an excellent executive summary. For successful business plans the executive summary is very important. All business plans should include in this section the nature of your new venture and the need you want to satisfy. Also, describe your potential market and why is your product or service needed. Don’t forget to describe how is your business organized, your management team, and include a briefly summary of your marketing plan. Also, remember that the audience wants to see the amount of capital that you need, your sales expectations and how are you expecting to pay back the debt. If the audience is pleased by what you have written till now then they will continue reading the whole plan. But if you couldn’t capture their attention then they will reject your plan no matter how good is your idea. The business section of business plans should include the legal name, physical address and full description of the nature of the business. Firstly, keep in mind that business plans should contain a general terminology. Those that read the plan don’t necessarily have the same level of knowledge like those that write the plan. Also, you should try to explain why your idea is better than that of your competitors. The market analysis section helps you understand better the market on which you want to enter. This section is more like a marketing plan description. All business plans should include in the market analysis section the estimated demand of the product or service, the market target, the industry’s trends, the pricing plan that you will follow and the description of the company’s policies. In the financing section you should prove to the audience that you really want to make your business work. Explain exactly how much money from the personal funds do you have and their sources. Also, mention the amount that you need to borrow and how are you going to repay it. Any relevant financial worksheets like annual income projections, a break-even worksheet, predictable cash flow statements and a balance sheet are important and should be included in all business plans. Good business plans contain in the management section information about the organizational structure of the business and about the management team. Also, it contains resumes and biographies of key members of the management team. There are some persons that might consider that business plans require a lot of time and effort. But, they don’t realize that the time spent writing the plan is well spent. Also, there is a business plan building software that helps people make their business plans. This software is easy to use and at an affordable price and will help you obtain some great business plans.  Digg It    Stumble It    Deli.icio.us Related Articles Business PlansQuality Business plansWriting A Business PlanEvaluating The Business PlanNew Business ProposalCreate a Business planBusiness Plans to raise capitalEssentials Of A Business PlanWriting A Business LetterCreating Business StrategyTips For Business PlansQuality business plan About Us | Terms of Use | Privacy Policy Contact Us | Help | User Blog | Links Angel Investor Network | Venture Capital Firms | Raise Capital Find Startup & Small Business Funding © 2010 Go4Funding.com All rights reserved.

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Essential Components Of Business Plans


Viewed:
64536
Times


Business plans
have a well defined form that shouldn’t be changed by anyone. Business
plans include several elements that shouldn’t be modified, because otherwise they
won’t have the expected results.

When you want to write your business plan remember to stick to its original form.
Those that will read it will expect to see a certain format. In the case that they
won’t notice the elemental components then they won’t take your plan into consideration
even if you’ve presented a great idea.

The business plans have five fundamental components: the executive summary section,
the business section, the market analysis section, the financing section, and the
management section.

The executive summary section is the first section in all business plans. Those
business plans with a good executive summary will have greater chances to be successful.
The audience will be convinced to read the whole business plan if you’ll come with
an excellent executive summary. For successful business plans the executive summary
is very important.

All business plans should include in this section the nature of your new venture
and the need you want to satisfy. Also, describe your potential market and why is
your product or service needed. Don’t forget to describe how is your business organized,
your management team, and include a briefly summary of your marketing plan. Also,
remember that the audience wants to see the amount of capital that you need, your
sales expectations and how are you expecting to pay back the debt.

If the audience is pleased by what you have written till now then they will continue
reading the whole plan. But if you couldn’t capture their attention then they will
reject your plan no matter how good is your idea.

The business section of business plans should include the legal name, physical address
and full description of the nature of the business. Firstly, keep in mind that business
plans should contain a general terminology. Those that read the plan don’t necessarily
have the same level of knowledge like those that write the plan. Also, you should
try to explain why your idea is better than that of your competitors.

The market analysis section helps you understand better the market on which you
want to enter. This section is more like a marketing plan description. All business
plans
should include in the market analysis section the estimated demand of the
product or service, the market target, the industry’s trends, the pricing plan that
you will follow and the description of the company’s policies.

In the financing section you should prove to the audience that you really want to
make your
business work
. Explain exactly how much money from the personal funds
do you have and their sources. Also, mention the amount that you need to borrow
and how are you going to repay it. Any relevant financial worksheets like annual
income projections, a break-even worksheet, predictable cash flow statements and
a balance sheet are important and should be included in all business plans.

Good business plans contain in the management section information about the organizational
structure of the business and about the management team. Also, it contains resumes
and biographies of key members of the management team.

There are some persons that might consider that business plans require a lot of
time and effort. But, they don’t realize that the time spent writing the plan is
well spent. Also, there is a business plan building software that helps people make
their business plans. This software is easy to use and at an affordable price and
will help you obtain some great business plans.


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Effective Management Skills – Investment Evaluation Criteria

Three steps are involved in the evaluation of an investment:

• Estimation of cash flows

• Estimation of the required rate of return (the cast of capital)

• Application of a decision rule for decision rule for making the choice

Investment decision rule

The investment decision rules may be referred to as capital budgeting techniques, or investment criteria. A sound appraisal technique should be used to measure the economic worth of an investment project. The essential property of a sound technique is that is should maximize the shareholders wealth. The following other characteristics should also be possessed by a sound investment evaluation criterion:

• It should consider all cash flows to determine the true profitability of then project.

• It should provide for an objective and unambiguous way of separate good projects from bad projects.

• It should help ranking of projects according to their true profitability.

• It should recognize the fact that bigger cash flows are preferable to smaller ones and early cash flows are preferable to later ones.

• It should help to choose among mutually exclusive projects that project which maximizes the shareholders wealth.

• It should be a criterion which is applicable to any conceivable investment project independent of others.

These conditions will be clarified as we discuss the features of various investment criteria in the following posts.

Investment Appraisal Criteria

A number of investment appraisal criteria or capital budgeting techniques are in use of practice. They may be grouped in the following two categories:

1. Discounted cash flow criteria

• Net present value

• Internal rate of return

• Profitability index (PI)

2. Not discounted cash flow criteria

• Payback period

• Accounting rate of return

• Discounted payback period

Discounted payback is a variation of the payback method. It involves discounted method, but it is not a true measure of investment profitability. We will show in our following posts the net present value criterion is the most valid technique of evaluating an investment project. It is consistent with the objective of maximizing the shareholders wealth.

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Project Management Techniques * The Capital Budgeting

A number of factors combine to make capital budgeting decisions perhaps the most important ones financial managers and their staff must make. There are a huge number of variables that must be considered although many can be defined as legible due to their probability of occurrence. However the cost of failure is great with companies facing bankruptcy if their market judgment is vastly incorrect. This report then focuses on evaluating the major risks that effect capital budgeting decisions and how that information can aid the techniques used to analyze fixed asset investments.

First, since the result of capital budgeting decisions have an impact for many years, the firm will lose some of its flexibility. For example, the purchase of an asset with an economic life of ten years locks the firm in for a ten year period. Further because asset expansion is fundamentally related to expect future sales a decision to buy an asset that is expected to last ten years requires a ten year sales forecast. If the firm invests too much in assets, it will incur unnecessarily high depreciation and other expenses. On the other hand, if it does not spend enough on fixed assets, two problems may arise. ‘First, its equipment may not be efficient enough for least-cost production and second, if it has inadequate capacity it may lose a portion of its market share to rival firms, and regaining lost customers will involve heavy selling expenses and price reductions, both of which are costly’. If a firm forecasts its needs for capital assets in advance, it will have an opportunity to purchase and install the assets before they are needed. Unfortunately, many firms do not order capital goods until existing assets are approaching full-capacity usage. If sales grow because of an increase in general market demand, all firms in the industry will tend to order capital goods at about the same time. This results in ‘backlogs, long waiting times for machinery, and an increase in their prices’. The firm which foresees its needs and purchases capital assets during slack periods can avoid these problems. Capital budgeting typically involves substantial expenditures, and before a firm can spend a large amount of money, it must have the funds available – large amounts of money are not available automatically. Therefore, a firm contemplating a major capital expenditure program should plan its financing far enough in advance to be sure funds are available.

A key area concerned with the capital budgeting decisions made by firm’s lies within the capital structure policy as this sets the tone for all future financial decisions.

Incorporating the tax deductibility of interest but not dividends and bankruptcy costs leads to the trade-off theory of capital structure. Some debt is desirable because of the tax shield arising from interest deductibility but the costs of bankruptcy and financial distress limit the amount that should be used. This is because when companies are highly levered the threat of default risks is great. Therefore an optimal range of debt finance needs to be incorporated into capital structure policy.

This is an extremely important concept for companies to consider when undertaking in capital budget decisions as their capital structure will have a large influence in determining which investment options to pursue. For example if the company decides to follow an investment proposal where the discounted payback period is great during the later stages of the project although the initial cash outlays are large. If the company is heavily financed through debt then the risk placed on that project will be high due to the probable default risk occurring if the short term future produces an uncertain event that throws the investment into doubt. A recent example of this case is described below:

The recent crisis in the football industry has demonstrated the importance of keeping a tight control of a company’s finances. As the industry became increasingly profitable throughout the 1990’s many clubs operated under the trade off theory principles. To incorporate increased spending in parallel with exponential transfer and wage increases clubs borrowed excessively to a point where the industry could not sustain itself any longer. This reached a head during May 2002 when the sudden collapse of ITV Digital resulted in the threat of bankruptcy for many smaller clubs. This situation was due to fact that smaller clubs had gambled their future on the excessive amounts of capital they were receiving from ITV Digital. Capital budget decisions had been based around spending for short term gains thus allowing football clubs to neglect their long term survival and as a result over six hundred footballers were made redundant during the summer in order to cut costs.

For example the highly profitable semi-conductor companies of the mid 1990’s like Samsung, did not shift their capital budgeting decisions policy towards higher levels of debt as the trade off theory suggests. This can be explained through the fact that in high-tech growth industries current assets are best described as risky and intangible. Therefore borrowing heavily would appear foolish as in times of crisis the company’s current assets would be rendered worthless resulting in nothing tangible to safeguard against spiraling default payments. This does appear slightly pessimistic considering during times of prosperity one would expect expansion and growth however there are many other risk factors that need to be taken into account when forming capital budgeting decisions.

Sales Stability: Companies with a stable source of income can feel more comfortable about supporting higher levels of debt because they are able to service the debt.

Asset Structure: When fixed assets are at a higher percentage relative to current assets, higher levels of debt can be supported due to the security factor. The lender is aware that if the interest can not be paid, fixed assets can be sold off.

Operating Leverage: The relationship between fixed and variable costs suggests that a high level of operating leverage will result in a high level of fixed costs. Therefore a company that is highly levered in operating leverage should have low levels of financial leverage to prevent the increase of costs.

Management Attitudes: These attitudes change regarding the current financial climate and whether personal styles tend to be more conservative or aggressive.

Lender and Rating Agency Attitudes: The credit rating of a firm has implications regarding the entire capital structure policy of a firm.

It is essential that top management is aware of the information gained from producing the capital budgeting decisions and it is not just limited to the financial management department. Often within companies there is a capping of the capital budget made by top management which can extinguish any investments projects no matter how profitable they might be. Therefore there needs to be a good two way communication process between senior management and financial management to prevent conflict occurring.

One way of achieving this is through SWOT analysis. Before developing strategies to accomplish the firm’s objectives, a manager needs to access the internal strengths and weaknesses of the firm. This evaluation should include the firm’s financial health, physical capital, human resources, production efficiency, and product demand. External threats and opportunities that impact the firm’s ability to accomplish its objectives also need to be considered. An external threat and opportunity analysis might include evaluating the behavior of close competitors or assessing the impacts of the business cycle on clientele incomes and the resulting product demand. The SWOT analysis helps the firm understand the current constraints placed on it by both internal and external forces and enables the firm to take corrective action, when possible to better position itself to accomplish its objectives.

Through implementing SWOT analysis correctly a greater amount of information is available to make informed capital budgeting decisions. The technique can then be implemented with in standard investment appraisal techniques such as NPV, discounted payback period and IRR. By providing SWOT analysis to aid capital budgeting decisions the threat of failure deceases. However reviewing or post-auditing is a final step to review the performance of investment projects after they have been implemented. While projected cash flows are uncertain and one should not expect actual values to agree with predicted values, the analysis should attempt to find systematic biases or errors by individuals, departments, or divisions and attempt to identify reasons for these errors. Another reason to audit project performance is to decide whether to abandon or continue projects that have done poorly. Therefore in order to eliminate poor performance the various risks associated with capital budgeting decisions need to be applied as strictly in the auditing process to aid in the decision making process for future capital budgeting decisions.

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