Business Planning....

"You believe in a God who plays dice, and I in complete law and order"€ (Albert Einstein)

Static Business Planning - Ignoring Risk at your Peril.
Most businesses have a quantitative financial business plan, usually in the form of an Excel spreadsheet. In times of business uncertainty a single view of the future summarised in a business plan, however thoroughly prepared, leaves a business exposed to risks originating in its operating environment. These risks are typically currency fluctuations, interest rate movements, sales projection uncertainties and variations in input costs (labour, materials and components) over time to name just a few. Get help >

What-If Business Planning - Acknowledging Risk then Worrying.
In reality a static business plan is little more than a reasoned business case describing business aspirations and is conventionally strengthened by the use of “what if” budgets covering different operating scenarios. Developing a series of parallel business plans covering different operating scenarios is very time consuming and few business or financial managers have the time and resources to develop more than 2-4 comparative business plans. Get help >

Probabilistic Business Planning - Stress Testing and De-Risking.
A much more effective way to plan and budget is open to businesses prepared to use the power of the statistical technique of Monte Carlo simulation to help them comprehensively evaluate the risks inherent in their business plan and budget. Though it sounds complex Monte Carlo simulation is in essence a very simple technique that enables all likely combinations of values and events to be considered within a business plan and the result is a business plan which gives a reliable probability estimate of its real world outcome: i.e. what the most likely outcome of a business plan will be.

With the probable outcome of the business plan understood an optimisation technique, called OptiQuest, can then be used to identify exactly which items within the business plan are the most significant causes of risk and so enable risk reduction strategies to be developed and applied to reduce the overall business plan risk.This approach is equally applicable to the de-risking of cashflow management and project planning.

Using high performance Crystal Ball analytical software from Oracle™ it is possible to perform a complete business plan risk assessment, including the identification of the plan’s riskiest elements, very quickly (typically 2-3 days) and very cheaply (typically less than £900). Get help >