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SunTrust: A Six-Year Plan Can Maximize Business Value

Offers six core elements every long-term business plan must consider

Sep 16, 2015

ATLANTA, Sept. 16, 2015 /PRNewswire/ -- Business growth is top of mind for four out of five companies, but only a third of business executives have completed significant planning for growth, according to a recent SunTrust Banks, Inc. (NYSE: STI) survey. Twenty-eight percent have done little or no long-term business planning.

Strategies for Growth in a Six-Year Plan - SunTrust

"While long-term planning is critical to the ongoing financial success of a company, carving out time to begin is often a challenge for many business leaders," said Beau Cummins, head of commercial banking at SunTrust. "We found that even those who have established a planning process often focus only on a two to three year period, which does not enable robust scenario planning."

SunTrust surveyed more than 500 small and mid-sized businesses nationwide on their growth goals and business plans.

"Long-term planning should simplify day-to-day decision making, saving time and more effectively employing capital. When we ask our clients about their 'sixth year,' responses are usually very different than when we discuss immediate growth," said Cummins. "Stating longer-term plans -- whether that means going public, acquiring competitors, involving private equity or building for the future -- helps leaders better focus on increasing business value."

A six-year plan tells a more comprehensive story. It provides an in-depth view of a company's goals, allowing executives to accelerate growth now while positioning the business to take advantage of strategic opportunities in the future.

SunTrust suggests businesses consider the following when developing a six-year plan.

  1. Determine a Competitive Strategy. This is the foundation of a company's business plan and should be rooted in a holistic evaluation of competitor behavior including, pricing, sales strategies and product development, as well as industry trends, economic/business cycles, customer segment shifts, and emerging needs.
  2. Optimize Growth Strategies. According to the 2015 SunTrust Business Pulse survey, organic growth is the preferred path in pursuit of growth of nearly 60 percent of business leaders. To pursue organic growth such as expanding product or service lines, exploring new business segments, and entering new domestic or international markets, businesses should leverage banking partners with expertise in securing funding and evaluating long-term strategic options.
  3. Evaluate Divestiture Opportunities. In order to enhance management's focus and current profitability, consider the sale of an under-performing business or product line, a spin off into a new entity or liquidation of certain assets, as well as strategic divestiture.
  4. Consider Capital and Debt Restructuring. To unlock capital or improve cash flow, first evaluate the business' debt/equity mix, as well as other funding sources.
  5. Define the Ownership Plan. It's never too soon to start planning for the future governance of a business, and it takes an accomplished advisory team of experts, including: a CPA, financial planner, business consultant, banker, and outside legal counsel.
  6. Maximize Future Options. A comprehensive six year plan helps management focus its resources along the way in order to achieve its growth objectives and maximize its options, including ownership transition, recapitalization or ultimate sale of the business.

"Business leaders often focus on the income statement, but when they look six years out, the planning shifts to balance sheet optimization to drive business value," explains Cummins. "At SunTrust, we help our clients develop plans throughout the lifecycle of their company, not only to meet short-term needs. We use all of our talent and resources – from treasury and payments to our investment banking group – to help companies grow efficiently and profitably with the long-term future in mind."

For more information on how to develop The Six-Year Plan, visit the SunTrust Resource Center at suntrust.com/SixYearPlan.

About SunTrust Banks, Inc.
SunTrust Banks, Inc., one of the nation's largest financial services organizations, is dedicated to Lighting the Way to Financial Well-Being for its clients and communities. Headquartered in Atlanta, the company serves a broad range of consumer, commercial, corporate and institutional clients. As of June 30, 2015, SunTrust had total assets of $188.9 billion and total deposits of $144.9 billion. Through its flagship subsidiary, SunTrust Bank, the company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic States and a full array of technology-based, 24-hour delivery channels. The company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services.  Through its various subsidiaries, the company provides mortgage banking, asset management, securities brokerage, and capital market services. The SunTrust Internet address is suntrust.com.

Photo - http://photos.prnewswire.com/prnh/20150916/267104-INFO

SOURCE SunTrust Banks, Inc.

For further information: Thomas Crosson, (470) 218-9178


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