Integrated Business Planning
Integrated business planning refers to the projection of a company’s future business performance in the form of an income statement (P&L), balance sheet (assets and liabilities), and cash flow statement.
The sub-plans of various business units or departments are consolidated into one company-wide plan, resulting in a comprehensive view of the planned performance as well as the capital and financing structure. Thus, integrated planning not only reflects the entrepreneurial objectives but also shows which financial resources are required to achieve these goals.
“Integrated” means that the sub-plans are not developed independently or department-specifically, but are interconnected and linked through a consistent planning framework. For example, revenues from sales planning are reflected in the balance sheet as receivables based on payment terms, while expenses (determined from production and personnel planning in conjunction with procurement) appear as liabilities. Changes in inventories resulting from planned production and sales are recorded as inventory in the balance sheet. Meanwhile, changes in advance payments, inventories, receivables, and liabilities (the so-called working capital) are indirectly represented in the cash flow statement.
The preparation of this integrated business planning is often subsumed under the term financial modeling. Financial modeling generally encompasses all financial analyses that create a simplified representation of reality — focusing on the essential drivers of the business. Equally important is the accurate depiction of interrelationships in order to present the company holistically and thereby correctly portray its asset, financial, and earnings position.
Integrated business planning reflects the holistic restructuring concept and creates the necessary transparency regarding the company’s planned strategic, operational, and financial realignment. As such, integrated business planning serves as a central negotiation basis for shareholder decisions as well as discussions with banks and financing partners.
It is the heart of every restructuring process and a hallmark of professional restructuring advisory.
At the same time, the plan serves as the “target picture” and provides a solid foundation for implementing the restructuring concept and managing progress effectively. Through financial modeling, the successful implementation of measures can be presented transparently, and if deviations from the plan occur, corrective actions can be identified and developed at an early stage.
Even independent of an existing crisis, a rolling integrated business plan serves as an early warning system — thereby fulfilling the obligation of early crisis detection pursuant to § 1 (1) StaRUG. It makes the impact on the company’s equity and debt position transparent and, in particular, helps to identify liquidity shortfalls at an early stage.
Advisory in the preparation of Business Plans
Including optimization of the planning process: rolling forecasts, creation of planning manuals, and enhancement of planning tools.
Review and Validation of Business Plans
As part of Independent Business Reviews, going concern forecasts, or restructuring expert opinions.
Preparation of Integrated Business Plans in Excel
Particularly within the framework of comprehensive restructuring concepts.
Development of Sensitivities or Scenarios Based on Existing Business Plans
Especially in light of market uncertainties (risks) or the implementation of restructuring measures (opportunities).
Support in Negotiations Based on Business Plans
For example, in bank meetings, staff discussions, or presentations to supervisory boards and shareholders.
Never in the “Quiet Back Room”
In all areas, the approach of Turnaround Management Partners involves close collaboration with the responsible employees.
We do not presume to know the business better than the people who work in it. Instead, we rely on the industry expertise and experience at all levels of the organization. We place no value on business plans developed in a “quiet back room.”
A key success factor for using business planning effectively in restructuring is the company’s trust in the underlying concept and the credibility of the figures presented. All existing ideas and meaningful analyses that are already available are integrated into the overall framework.
The goal is to ultimately create a flexible (i.e., scenario-capable) and manageable Excel-based turnaround model — one that is pragmatic to use and developed with cost-conscious effort.
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