Strategic Plan Development

Situation: A newly organized public company formed as the result of a merger was positioned for dramatic growth. The company wanted to determine its potential financial position after two additional proposed mergers. It was necessary to engage a professional financial consulting firm that could design and develop a custom financial business-planning model. This business model needed to present a three-year forecasted operating income statements, balance sheets and cash flow statements. Critical to the plan and success of the mergers was an accurate forecast for the investments that would be necessary to bring the company's entities to profitability.

IntegraGroup's Role: IntegraGroup was engaged to develop a customized planning tool that would be driven by a comprehensive set of assumptions about product pricing and cost, along with personal staffing requirements, facility needs and operating costs. Starting with a blank electronic spread sheet we develop four fully integrated business models each representing one of the operating subsidiaries plus a consolidation and a summary presentation schedules. Each of these models presented a three year detailed plan including income statements, balance sheets and cash flows. By integrating each of these models into a consolidating and summary model the company's management could know exactly when and to what level it would need capital funding to support its start-up and growth plan. By modifying a single product pricing schedule or staffing assumption management had instant information as to the probable result of their decisions. Potential investors could themselves use this model to compute any number of possible scenarios to test the viability of the forecast and determine the high and low rise points of the business opportunities. Since this was a public company, future stock price ranges could be computed based on industry comps and current market assumptions.

Conclusion: Before the additional mergers, the company ‘s management finalized it's business combination and growth strategy. Investors were prepared for three rounds of financing starting with $3.5 million at the time for mergers with, an additional requirement six months later and a final round six months from then. Funding commenced, the mergers closed and business began.