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SESSION D.4: (b) TRAINERS NOTES

STRATEGIC MANAGEMENT

FORWARD PLANNING (The Guessing Game)

Objectives:

To observe the importance of realistic forward planning.
To understand the interconnectedness of all aspects of the project.

The financial management of your radio station will often require you to estimate income and costs. Bookkeeping and the annual accounts are concerned primarily with past trading periods. Analysing and understanding past performance in order to control current activity is an important part of financial management.

But financial management is also concerned with planning for the future. To do so you must make intelligent and informed estimates for future performance. The financial plan of your radio station will be based on a series of assumptions about future conditions and station performance. These assumptions must be reasonable, and will as far as possible be based on available evidence about your own past performance or that of other comparable organisations.

This exercise asks you to guesstimate the various elements of your stations financial plan.

The exercise will:

  • Provide you with a checklist of the financial information, which you will need to accurately determine, or (where that is not possible) to estimate in order to develop a reliable and convincing financial plan.
  • Provide you with the basis for a more detailed financial model of the stationís next 2 years of operation.
  • Allow you to derive an early indication of your projectís viability and financing requirements.
  • Help you to understand the inter-relationship of the modelís various elements, and to manage them.

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