Planning for the future may not be high on your list of priorities, especially with the everyday demands of running a business. However, it’s proven that those business leaders who are proactive (in other words, those who strategically plan for the future) are those whose businesses continuously succeed. Because it’s not a matter of if certain business scenarios will happen – but when.

Here are the four scenarios a long-term financial projection can help you plan for:

1. Business Expansion or Reorganization
Before you expand or reorganize your business, you need to take stock of your capital. A long-term financial projection will shed light on future capital requirements (debt or equity). In order to receive a loan, banks have to consider your capital structure. Will you be adequately capitalized? A financial projection can answer that. Whether your business is growing or maintaining, a financial projection will clearly define what you need, how much of something you’ll need, and when you’ll need it.

2. Acquisition of a business
If you’re looking to acquire a business, you need to understand the projected cash flow. A financial projection can forecast your cash flow, ensuring you’ll have the necessary funds and resources available to run your business.

3. Bank Covenant Issues
A long-term financial projection can anticipate problems before they happen, which then allows you to take corrective action to prevent the problem. Banks will potentially make arrangements with you if you bring a potential issue to their attention.

4. Sale of Your Business
The sale of your business is determined by several factors.  A long-term financial projection can give you a mark to aim for in order to create the best atmosphere for when the time comes to sell your business. You want all of the elements to be just right to get the best value for your company.

Taking the time to financially plan for the long-term can help prepare you for when certain business obstacles or opportunities arise. So take the time now and get a financial projection for your business.