This is Why Financial Planning is so Important to Your Business

This is Why Financial Planning is so Important to Your Business

04 Dec 2019


This is Why Financial Planning is so Important to Your Business


Financial planning in business is like big-scale budgeting. It's a crucial part of running a business and, if done correctly and regularly, will help your business grow and sustain growth. But exactly why is financial planning so important to your business?
What is financial planning in business?


It's the process of allocating funds to every aspect of your business and ascertaining how your business is going to achieve its various goals. The process includes the analysis of past financial reports, the forecasting of net revenue, the analysis of risks, and the estimation of operating costs.


Financial planning should be done before the start of every new financial year. It's important that you are realistic in terms of budget, estimations and forecasting.

And management Accounts updated each month throughout your financial year.


Why is financial planning important in business?
Even if you are a small company with a limited budget for expenditure, it's vital you have some sort of financial planning process in place. It acts as your guide for running your business, helping you define a realistic strategy for growth and more.


Financial planning allows you to create a revenue model that incorporates potential profits and losses along with cash flow tracking. You can then compare the statistics with your financial plan to figure out where your business is currently at. In other words, you can measure your actual progress against what you had envisioned. That way, you are better prepared to make decisions, big or small.


A solid financial plan ensures you have enough funds for each aspect of business, including equipment, staff, marketing - and emergencies. It gives you as a business owner peace of mind and aids the overall functioning of the company by ensuring financial stability.

Financial planning empowers you by helping you understand your company's current and future finances and profitability. If you feel you need expert financial planning assistance, get in touch with me and we can discuss your needs during a FREE telephone consultation