Financial approaches for projects development

03.05.20 02:08 PM

Innovate and improve without goals is not enough

Nowadays, companies and Startups in the world are continually searching for new ways to innovate in product development, improve their production processes, and implement new strategies or methodologies that allow them to increase their profits. However, for a company to achieve these goals in such a competitive world, it must focus on three crucial specific objectives.

Tradewar for a market share. Photo on Unplash by Franki Chamaki.

1. Market Share            

Represents the percentage of participation that a company or product has in the market segment where it competes. Usually calculated by the number of sales of the company among the total sales. This goal is often to use because it allows us to know how well our product is received compared to others.

This variable takes into account different variables such as the number of sales, prices, the elasticity of quality and distribution, the geographic area where sales and advertising expenses are made, among others. Still, at the same time, it is abstracted from variables such as inflation, economic situation, GDP, among others.

Based on this objective, we can make critical decisions, such as drawing up new sales, advertising, distribution or production strategies. Remember that any company needs study the market because it is the most important resource about costumer and if our products or services does not satisfy costomer needs, the enterprise goes directly to broke.

Cash. Photo on Unplash by Vladimir Solomyani.

2. "Cash is King"

A phrase coined by many entrepreneurs and investors such as Warren Buffet, who usually operate with a higher liquidity margin than they might need in the face of difficulty, that is, with higher cash flow. These happen because the cash flow or availability of liquid money that is capable of generating our company will allow us to overcome the various difficulties that may occur throughout your life.


At the time of raising capital for any project, these are usually valued based on the income-generating capacity that it will provide. For this reason, one of the most common forms of business valuation is through the use of discounted cash flow methodology, which estimates future revenues and brings them to net present value taking into account variables such as WAAC, country risk, rates off. The higher the cash flow, the higher the value our company will have.

Checking profit&loses. Photo on Unplash by Campaign Creators

3. Tangible Results

We do not feel confident in a company or product, which is why it is necessary when developing a project, show at least a minimum viable product (MVP) or tangible positive results (Profit). Furthermore, if you intend to raise capital, introducing a new product to the market, in addition to giving people reliability, you should allow criticism and comments reception for future improvements. Currently any investors, entrepeneurs, shareholders before to investing their money makes some estimates about the profit and MVP for future comparisons 

If as an entrepreneur or future businessman, you consider these three objectives, you will assure you to be closer to your macro goals and will reduce the risk of failure of your product or project.Our team, at Consultips Group, provides solutions, improvements, and strategies, firmly believing in these three objectives, seeking to generate value for its customers.