What Is Business Financial Planning For?
Corporate financial planning is the issue that differentiates an organization that knows where it wants to go from one that walks according to the flow, as the manager needs to make strategic decisions regarding its operation.
In this sense, financial planning serves to project the company’s revenues and expenses, enabling the identification of the company’s economic situation. In other words, it helps the manager to think critically about the business, design scenarios, define action plans, and establish objectives.
In this way, business financial planning can be seen as the basis for a company’s various practices and decisions, regardless of the type and size of the business. After all, every company needs resources to function in any branch or segment.
However, contrary to what many think, business financial planning is not limited to the financial part. On the contrary, it involves all areas of the company. For the gear to work, it must be integrated with other vital sectors, such as Human Resources, Sales, and Operations.
What Makes Up Financial Planning In The Company?
It can be said that business financial planning is composed of a cycle of 4 steps that involve:
The first phase consists of proposing goals and organizing the company’s future actions. In this context, some essential goals can be stipulated, such as:
- End the year in blue;
- Being able to pay bills on time;
- Increase revenue by 20%;
- Double the number of active customers;
- Reduce fixed costs by 10%.
Now is the time to put your strategy into practice. And for that to work, you need skilled people by your side to perform different functions. Therefore, invest in employee training first.
In addition to training employees, it is essential to monitor the progress of activities and observe what can be improved. Remember that the stock performance index will directly influence the results of corporate financial planning.
In this last step, you will have already evaluated the development of your plan; that is, the strategy roadmap will already be updated. Therefore, it is time to put the plan into practice, applying the necessary modifications.
What To Avoid In Business Financial Planning?
Poor business financial planning can ruin a company. Therefore, it needs to be prepared based on reliable data, considering different scenarios. Below are some common mistakes that should be avoided when preparing a business financial plan.
- A plan without controlling the company’s accounts;
- Not integrating the different sectors, making them work out of sync;
- Overestimate the company’s revenue;
- Plan but not execute the plans;
- Not being aware of external factors;
- Pricing products and services without criteria.
How To Reduce Marketing Costs With Financial Planning?
As we explained, business financial planning facilitates the projection of income and expenses to indicate the actual economic situation of the company. When you have a clear sense of the business landscape, it is easier to know what decisions need to be made.
In other words, it is as if the business planning works as a guide for the company’s performance during its journey in the market. To execute thoughtful business financial planning and benefit all sectors of the company – commercial, operations, marketing, among others -check out seven tips that we have listed for you.
- Recognize the current situation of the company;
- Design different scenarios;
- Draw up an action plan;
- Calculate the ideal price for your product or service;
- Consider expert help;
- Use digital tools;
- Log and control everything.
By following these tips, you will increase the chance that your business financial planning will work. With this, all company areas will benefit, and you will save unnecessary expenses due to errors.
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