How Do You Determine A Company’s Optimal Capital Structure?


You develop a comprehensive three-year operating-plan composed of individual disciplines such as sales, marketing, services, development, and F&A, from which income statement, cash flow, and use of proceeds are computed. From those assumptions, modulated by your assessment of risk, come the capital requirements needed to run the business through its transitional periods.

Setting up the operating plan is not the magic, walking through it with a founder gives a remarkable insight into the business, the process of gathering the information and discovery often instrumental in leading to decisions as to how to focus on the business on producing optimal profit margins.

Like how I once dissected a medical business and discovered how the business had diluted its profit margins by focusing on too many product lines. Returning it to becoming the king of one rather than the king of none.

Nothing beats a great vision of a product or service to produce value, but without a strong operating plan to support the viability of its realization, a vision remains just that.

Having completed the operating plan is also a fantastic instrument in fundraising efforts, as the time spent on walking through the variables of the plan feeds potential investors the dog-food to make a viable investment decision, for you are now talking their language; finance.


Schedule a one-on-one conversation with Georges to learn more about the specific topics below and how to systemically improve human ingenuity and capacity through policy, capital, and innovation.

Georges van Hoegaerden
Georges van Hoegaerden
Georges is the Founder and Managing Director of method41. From analyzing the workings of policy, capital, and innovation, Georges noticed how these siloed constructs are woefully incompatible with the principles nature deploys to produce regenerative performance. With humanity stuck in a fabric of its own making, Georges set out to reinvent the operating-systems of humanity to fix the theory that determines what humanity can discover, aiming to fundamentally improve human adaptability to nature's entropy.
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