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In business, one of the things that leaders do from a high level is create Standard Operating Procedures. For your final project, you're going to
In business, one of the things that leaders do from a high level is create Standard Operating Procedures. For your final project, you're going to do just that. A standard operating procedure looks at the core principles in what you do in your core business role. As a finance student, your SOP is going to be specific to finance. In your standard operating procedure, ensure you cover the following items:
- Start with Why - Why are you publishing this document and what is the intent of the SOP?
- Capital Budgeting process - Who is involved and how are projects taken from concept, to budget, to execution and closeout? What is your capital landscape?
- Project analysis - What criteria must a project generally meet in order to be considered? (What are the hurdle rates of IRR, ROI, PB, NPV, etc.)? What typical payback period are you looking for on the project? What payback periods do you seek to achieve in projects?
- Project documentation - Think about the Excel worksheet you did on cash flows... what re the required documents for projects (for all phases - idea or concept through closeout).
- Risk analysis - What are the major areas you're looking to analyze risk? How are you monetizing that risk? How are you presenting risk in a way that can be understood by everyone?
- Portfolio analysis - Many companies have a "portfolio" of projects... How are projects working together to achieve a goal? What are you using to analyze projects and their impacts on each other? How are profits being rolled over into new working capital? What % of the profits is going back into new projects vs company profits?
- Conclusion - tie everything together.
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