Topic

Planning Horizons

Topic Progress:

Extend Your Planning Horizon

When it comes to financing, thinking months—even years—down the road is appropriate. Because the future is uncertain, financing is an inherently risky proposition. Getting prospective lenders and investors to know you—to trust you—takes time. Sure, you can get a merchant cash advance at an exorbitant rate within a few days. But getting reasonably priced, flexibly structured, long-term financing takes longer.

Extend Your Planning Horizons
Plan ahead to increase the quantity and quality of your financing options.

Somewhat ironically, anticipating your needs also makes it easier to respond effectively to unforeseen circumstances. If you manage your financial affairs reactively, on the other hand, you’re more likely to make sub-optimal choices.

Making poor financing choices matter. The wrong financial structure can put the cart before the horse regarding your larger business strategy. That is, the requirements to fulfill the needs of the source of financing can easily be at odds with the best long-term decisions for the company as a whole.

Furthermore, bad financing choices have a bad habit of lasting a long time. You can fire a poor performing employee, and you can replace a supplier of shoddy materials. However, it’s tough to “fire” the wrong financial partner.

Consequently, it just makes sense to have a financing plan in the drawer ready to execute. By the end of this course, you’ll have a better idea of what that plan should look like for your business and your personal objectives.