La business planning It is the process by which an organization defines its objectives and develops strategies to achieve them, formulating different plans that will guide this necessary process to achieve success. It is important to have talent and good ideas, but without good planning all of the above is meaningless.
La financing and management of the company They always go hand in hand. If business planning is necessary to achieve business goals in the short, medium or long term, financial planning is necessary to achieve business economic stability and reduce financial uncertainty. To do this, you must have trained personnel with sufficient knowledge related to the business financing.
1. What is financial planning?
Financial planning consists of identifying your financial goals, carrying out a financial analysis to establish the available resources and with all this, drawing up a strategy to use those resources in the best possible way to achieve the desired goals in terms of financing your companies and projects.
We can describe the financial planning as the process of designing and applying a map or roadmap towards what you want to achieve in terms of business financing and management. In practice, it means establishing in advance how resources are going to be used in order to find the best strategies that guarantee economic viability and the achievement of the stated goals.
2. How to boost your financial planning?
Developing a financial plan is the starting point. With him you will know What are the financial needs in the short, medium and long term?. Beyond achieving economic viability, it allows you to be aware of the financial status of your organization and, therefore, choose the best path to achieve the highest economic returns.
With this information you can calculate the commercial break-even point, also called dead center or break even. That is, the minimum sales volume from which you have neither profits nor losses. This will allow you to make strategic decisions about prices and costs, establish the best financial strategies and know what factors can affect the financing and management of your company.
3. Why should you plan for business financing?
Financial planning is a necessary tool for financing and management of your company. We can summarize the benefits derived from this planning in eight aspects:
Identify the real profitability of the business or project.
Establish financial objectives.
Establish what is the financial health and in this way guarantee financial sustainability
Know what initial or immediate investment It is needed to obtain income.
Know the amount of required resources to develop the activity during a specific period.
Define what productive capacity you have and, consequently, calculate the maximum earning potential viable.
Make better decisions about sources of business financing convenient.
Map out strategies, scenarios and lines of action that improve corporate finances to be prepared for possible contingencies.
Inform and To be accountable to partners, investors and other agents linked to the project as well as being able to attract future investors.
4. What are the keys to these plans?
In order to develop and implement the comprehensive financial plan necessary to guarantee the achievement of your objectives, you must address these stages:
Set and prioritize your objectives.
Establishes deadlines reasonable, but ambitious, to achieve them.
Make a good financial budget. In it you must specify everything that is necessary to achieve satisfactory results.
Measure, control and review decisions finances that you are taking. In no case should you deviate from the route that leads to achieving the objectives. However, this also means that, sometimes, you will have to readjust your actions compared to what you initially planned and take advantage of that opportunity to grow.
5. How financing influences the future of your company
Without money, your business project is a utopia. That is, the business financing It allows you to make corporate ambitions and desires come true as well as carry out projects that will make the organization grow.
There are five essential variables for financing and management of a company. Not only are they the main beneficiaries of correct planning, they are also the elements in which you can act to achieve your purposes:
Investment plan
Balance
Cash budget
Provisional profit and loss account
Treasury plan
Risk management
In practice, bad decisions and actions in these areas harm your activity and endanger the survival of the business. Often, even though the commercial and productive situation is positive, Financial mistakes condemn closure and lead to failure. Therefore, it is necessary to pay extreme attention to achieving a perfect financial planning as well as having the help of a professional in the field.
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