Finance Planning for Small Innovation Companies

Abstract

Nowadays the activities of many small innovative companies are concentrated in the field of digital technologies. Today operation of plenty of small innovation highly-technological companies concentrates in the field of digital technologies. Importance of compiling finance plans for these companies is explained by the necessity to compare the level of supposed costs, profitability and payback time with shareholders’ expectations; decision-making on financing tools; appraisal of investment appeal for potential investors. The key goal of the research is to study current methods of finance planning in order to assess their applicability in practice for small innovation companies. Using a real company as an example, three methods were compared: conceptual appraisal, scenario planning and Monte Carlo method. As a result the following conclusion was drawn: in conditions of uncertainty in making-up finance plans of small innovation companies it is advisable to use probability interpretation of work results, i. e. to use scholastic methods of finance planning to find possibility of damage arising.

Keywords

• conceptual appraisal
• monte- carlo method
• scenario planning
• unit-economics