Organizing your company’s finances and maintaining a business financial plan – regardless of the size of the business – are essential practices today for those who want to see their company grow and advance in such a competitive market. In practice, however, many managers neglect this essential step, and end up reaping setbacks and a series of problems involving the company’s capital.
If you already had a business plan for your company or are considering creating a business plan for your future business, but have never planned for the financial organization stage, then reading today’s article is necessary for you.
Just keep reading further and learn what a financial plan for your business will look like in order for it to expand, keeping control over your finance and maintaining sound health for business.
What is business financial planning?
Corporate financial planning, therefore, would be nothing other than a forecast of the expenditure and revenues to be incurred within the company-the purpose of the same being only to indicate an economic situation relating to the business and allow defining guidelines and plans for the short, medium and long term. It is with this tool that the manager can identify how much money the company has and will have available in cash during a given period of time and direct the use of capital to what is necessary.
Without financial planning, therefore, the company tends to be left without short, medium and long-term guidelines, opening the way for financial mismanagement, failure to meet financial obligations and even the death of the business in a short period of time.
How important is financial planning for companies?
As you already know, without financial planning for your company’s growth, you end up leaving the business to its own devices and, in most cases, you end up having to face a series of unforeseen events and financial problems at some point, since projections, analyses and investments related to money become more difficult to make without proper financial organization.
A company that maintains good financial planning, on the other hand, can identify its strengths, weaknesses, threats and opportunities and direct its efforts so that the business grows in a homogeneous and healthy way. Making investments, scheduling payments and reaching growth goals, in this situation, becomes a much simpler task for the entrepreneur.
How to make financial planning for your company?
Many managers don’t know, but making a financial plan for your company’s growth can be a much easier task than you might think. In this process, however, it is worth focusing on some essential steps, which can be decisive when it comes to making a good business financial plan. Check out below how to make your company’s financial plan in simple steps and keep your business on the path to success and growth:
Know the situation of your company
When it comes to financial planning for your company’s growth, there’s no point in estimating numbers and values. You need to know the real situation of your company, all the numbers and estimates related to the business , in order to format a financial plan aligned with the business’s situation. Making a business balance sheet can also help organize finances and plan the business’s next steps in relation to money. This way, you can direct efforts to areas that need it most, project investments and even plan changes to be made along the way.
Design different scenarios
Making projections of different business scenarios is essential for financial planning. Whenever possible, define three different scenarios and draw up a plan based on each of these pre-established contexts. This step is essential for the entrepreneur to align their income and expenses with different situations that may occur in their business, anticipating potential problems that could arise unexpectedly and harm the company’s cash flow. If you have a budget spreadsheet, this is the time to use it!
Make plans and follow them
Once you have identified the business situation and projected hypothetical scenarios for the future, it is time to develop an action plan. At this stage, develop plans for your company, not forgetting to include goals and objectives regarding finances, your team, the market and the results you expect to obtain in the short, medium and long term.
Based on these definitions, you will be able to align your business’s financial planning with the company’s goals and, from there, follow a direction that can effectively elevate your company and make it grow in relation to its competitors. But be careful: after making plans and setting goals, be sure to follow them! Many companies get to this stage, but end up planning so much that they forget to execute what was planned along the way. Therefore, plan ahead, but do not forget to put your plans into practice in favor of your business.
