CHAPTER 13
Plan Section 8: Special Topics I INVENT – RODIN
NOTHING.
I
REDISCOVER.
DEPENDING ON THE CIRCUMSTANCES,
the basic business plan topics may need to be supplemented by details covered by one or more special topics. In this chapter, we take a brief look at some of the more common issues that might arise in a specific context, including financing strategies, facilities and equipment, operations, information management, risk management strategies and regulatory matters.
Financing Even the best product requires working capital to finance development of appropriate opportunities. In the case of a domestic company, financing requirements will cover facilities, raw materials, marketing and sales, salaries and reserves to keep the company going as inventories are sold and collections are made from customers. Cash is also required to fund new product development initiatives that will not generate a return for several months or years in the future. The transition to global activities will require cash to develop the infrastructure for exporting products, as well as funds for the establishment of new facilities and sales offices in foreign countries. The international business plan will generally include extensive financial information, including historical results of operations and projections for future receipts and disbursements of cash. These projections must be tied directly to the identified sources of funds described elsewhere in the business plan. In describing the sources of funding, the plan must include projections or estimates regarding the timing of receipts, the sources of funds and the terms of repayment in the case of debt financing. A variety of funding sources may be available to your company for expansion into new foreign markets. Of course, the company may fund internal operations out of cash that is generated from current domestic activities. Each bit of income collected from the business should be allocated either toward distribution to the owners of the business or to some form of reinvestment in the business in worthwhile projects. As noted elsewhere in this book, there will come a time in the evolution of the business when the highest expected return on investment may be in a new foreign market as opposed to a local market that is already mature. Investors may be brought in specifically to fund a business plan that is focused on international operations and expansion. The funds may be paid directly to the company with the understanding that an agreed portion will be allocated to foreign activities that have been identified in the business plan. Such projects as the construction of a new production facility in Asia or the
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