In the words of Benjamin Franklin, “If you fail to plan, you plan to fail.” Undoubtedly, planning is at the center of moving forward in your life, whether you are starting a new business or entering a new industry. To realize your dreams, planning is essential. Proper planning can help individuals achieve their desired outcome and attain their financial goals, giving you a better chance for positive results.
There are numerous ways to gain financial freedom, but one that has come consistently on top is strategic investment planning. Chris Martin, owner, and CEO of GlenMartin, urges his friends and colleagues to closely review the overall strategy of any deal. Is there a proper thesis around how to enter the market? Does the investment strategy add value? Has the financial model established a well thought out set of assumptions and risks? Is there a well thought out exit strategy?
Strategic investment planning and financial freedom go hand-in-hand. With an expert, you can plan an investment that ensures high ROI. Chris shares some of the reasons strategic investment planning is essential.
Know your market
I find many people confuse the term market or marketing for the word advertising. To know your market, who makes up your market, how large is your market and at what stage your market is in is so important. Those entrepreneurs who do not study this important element of their business are really missing a huge element of why they do what they do. To know your market answers many of the important elements of what your business is about. It supports the answer of who to reach out to. How much could you potentially capture? It likewise considers who your competition is and what they price their offering for. I encourage all serious entrepreneurs and investors to review marketing strategy closely.
Does your investment strategy add value
Depending on the stage of the business or opportunity a strategic investment must have reason to add value. Much like a plant, maturity is a gauge of readiness for additional growth. If your business is not producing, have you answered why? If your business has plateaued, are you interested in expanding further? Strategic investment must bring a benefit to all stakeholders. Expanded equity investment in an enterprise or real estate must be supported by some track record for revenue generation.
Financial models built on stable assumptions and risk profiles
To know your business is to know how your business financially operates. A financial model that is built on a set of well thought out assumptions is essential to long term success. Maturity of a business may have many strategies that are intertwined and complementary. Do these strategies account for risk of failure or risk of your market changing? Is your strategy adapting to the market you serve? Carefully crafted financial models solve many complex business requirements but more importantly provide a financial compass for stable growth. To support growth a financial plan must account for appropriate cash flow.
All investors are interested in the exit strategy. Not only are they interested in getting paid along the journey but they are most interested in the exit. Exit is comparatively speaking to the harvest. A farmer grows a crop for the harvest. Without a harvest a farmer can not continue as a business. This is especially true of investors. Investors invest for the harvest or the “Exit”. So all great business strategies must offer a clear exit strategy for the investor.
To find out more about strategic investments offered by GlenMartin, follow Chris Martin.