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The Consequences of not planning or not executing the Strategic Plan include:
Outrunning resources (assets, credit, capital, people, market opportunities)
Continuing successful practices of the past in a changing world where many such practices quickly become outdated.
Discovering that competitors are growing faster than your business and partly by winning away your customers.

The consequence is that your business may shrink, or at least have to work harder to replace lost business before a healthy growth rate can be attained.
Becoming more vulnerable to the classic characteristics of overtrading: Lower margins; Losses; Shrinking working capital; slower turnover of A/R & Inventory; Higher leverage; Increasing Other Assets; Diminished Cash Flow. Businesses with these characteristics lack the capital, credit availability, resources and flexibility to take advantage of new opportunities.
Goals are not met.
Frequently, expenses increase early in the year in anticipation of growth in sales and profits. If the growth does not materialize quickly, profits may plummet. In most cases, the gradual return to respectable profitability will not exceed the levels that could have been achieved, had a good strategic plan been executed in the first place.
Financing will be less available and, when available, it will be more restrictive, with less generous terms, and be more expensive.

Conclusion:
Good strategic planning is especially important for Information Technology Reseller businesses. The marketplace is changing rapidly, which keeps successful management quite challenging. Nimbleness is essential for businesses in this industry to be proactive in achieving strong growth and in making improvements, as well as in being able to react quickly and effectively to marketplace changes and competitive pressures. Having a credit facility which supports the existing assets and the anticipated growth is an essential element of a business’ success and, frequently, its survival.

Therefore, good strategic planning should include an evaluation of the existing credit facility and the projected financing needs to support the growth plans of the company. The availability of sufficient financing which is structured to meet the needs of the business will be substantially dependent on the capital adequacy of the company. So, the best strategic plans include specific achievable plans for providing the capital, as well as the financing, for the company to achieve its goals and to maintain its nimbleness to meet all challenges.

G. Alexander Cole is Vice President – Credit for the Inventory Finance Division of FINOVA Capital Corporation. He is the credit officer responsible for FINOVA’s inventory finance, accounts receivable finance, purchase order finance and term loan credit products for the information technology, telecommunications and other industries. He has over 30 years of credit experience in a variety of positions and credit products.