Financial planning and LOs LO12818

Bob Williams (
Sat, 8 Mar 1997 11:59:32 +1200

Hi Folks,

A request for guidence.

I am involved in a 3 year action research project with a goal of
establishing whether there is a viable business in providing energy
efficiency services in the low income rented accommodation sector. I
won't bore you with the details, but the issue I want to raise is the
result of the project's rather complex funding structure and funding
constraints. What this has evolved into is a financial planning system and
a monthly financial reporting cycle which is becoming entirely self
serving. What I mean by that is that it does not actually serve as a
effective means of monitoring our financial performance, nor does it
really satisfy the various funder's (different) requirements for financial

So we have decided to start again, and plan a new financial system.

We have decided to base the system on the following model. We imagine the
project is already a "business" in the formal sense (or at least a fully
costed business idea), and we are building a financial business case to go
to the bank or potential shareholders. What financial system do we need
to construct which will help us do that ?

So far so simple. The snag is that having tried a few ways of doing it,
we decided that we cannot really construct a business plan in the
generally accepted sense of the word. (Discrete costed activity areas
with predicted monthly out-turns). We are a business at the developmental
stage, so the tradition of monthly expenditure against identified
milestones won't be very useful, since even the notion of what constitutes
a milestone tends to change every few months. Also activities are highly
contingent on each other. If we do certain things in a different order,
other activities actually disapper or change in their scale and timing.
We thought of using critical path techniques, but realised that we were in
danger of turning something artificial (our current financial planning
system) into something totally unwieldy and unuseful. Put in my language,
we have a long term business strategy, but only very short term business
plans (perhaps 2 months max in some areas). What kind of financial
planning and monitoring system can cope with this ?

I am conscious that trying to keep this note short and focussed, I have
missed many details. I hope that the thread of our problem remains clear.



"Only Connect" E.M. Forster (quoting Walt Whitman)


Bob Williams <>

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