FINANCIAL PLANNING

IMPORTANCE OF FINANCIAL PLANNING

As we said earlier also that Financial Planning plays an important role, it will help you to define both your company’s short term goals and long term goals and maintain a proposal to meet both these goals.

· It will help in the growth of the business.

· It will help in smooth functioning of your business.

· It will help you to increase your income from different sources.

· It will help you to create goodwill of your company.

· It will help you to think about the future of your company like you will be in a situation to take future endeavors and growth of your company.

· It will help you to arrange funds from the right sources and at a suitable time.

WHAT ARE THE STEPS TO DO FINANCIAL PLANNING FOR SMALL BUSINESS?

Assigning numbers and figures to your plans and also giving them life to them and this will start happening in the financial planning phase.

In the following paragraphs, we will discuss the steps to do financial planning.

· You need to review your strategic plans and also try to modify the problems and find the solution.

· Next step is you need to cultivate on your financial forecasts.

· You need to decide on the sources of investments.

· You must think and work on the adverse situations or we can say that you need to be prepared for the worst scenario.

· Review and monitor help you to find the actual problem areas and also rectify them.

· You must require support from different people and this will help you to get the best solution.

WHAT ARE THE FINANCIAL COMPONENTS OF FINANCIAL PLANNING?

· You must be clear about your objectives.

· You must have an estimation of your income generated from your sales.

· Must plan your Income Tax.

WHAT IS FINANCIAL STATEMENT?

You have to create your books of accounts that contain Income and expense statement, cash book and balance sheet, which helps you to know your current financial status.

CASH

Cash is one of the essential elements of financial planning. As a wise entrepreneur, you must plan the ratio between investments and liquid cash.

As we all know that Business is all about taking the huge risk. You must plan your finances as it the backbone of any business.

PLAN YOUR INVESTMENTS

You must understand the investment market, including financial institutes, banks and share market helps you in doing the same. Always try to spread your investments.

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