What is: Financial planning is a projection of revenues and expenses that aims to indicate the general economic situation of a person, company or project. From financial planning, it is possible to define how much money is available and thus direct its use.
Why do: Without complete financial planning, it is virtually impossible to realize the projections, analyze and apply your investments at the right time, assume costs and recognize the best opportunities to direct your business.
Advantages of Financial Planning
Any business - be it big, medium, or small - needs fundamentally to have a complete and realistic financial planning, so that it can grow in a healthy way. And, important as it is, many entrepreneurs ignore its relevance. Perhaps this is the main cause of many companies finalizing their activities in the first years of existence. The new entrepreneur may find it difficult to design their financial planning. However, if you take a few fundamental steps into account, you can easily identify your profile, your goals, and your way of doing things. See how easy it is to plan your success!
STEP 1: Recognize your real situation
There is no other way to begin the preparation of financial planning: it is necessary to delimit the conditions of your company. Consider the market time, the positives and others to improve, the type of service, the target audience, the type of communication you have with your audience, and all the features that make up your profile. In short, in addition to general aspects of your company, it is also necessary to make a balance sheet of your business. Considering your actual situation, you can better define the type of planning for your company and your initial investment to make the necessary changes. The spreadsheet becomes an aligned tool at this point.
STEP 2: Predict different scenarios for your business
No one can predict the future, but we can all prepare for it. We can predict some scenarios of action. The point is to define three different scenarios to facilitate your planning. In addition, at this stage, you can also align your revenues and your spending structure - set the monthly average revenue and raise what will be the company's fixed and variable expenses. The Budget Worksheet is a very useful resource at this time of financial planning.
STEP 3: Draw an Action Plan
This is the time to come up with a meticulous plan of action that will make everything written on the paper come true. It's the right time to roll up your sleeves and take some measurements, such as:
- Define your goals;
- Map the necessary actions;
- Create a realistic schedule;
- Divide tasks according to the responsibilities and competences of your team;
- Measure results;
- Document your actions so that they can be evaluated in the future.
The Monthly Financial Report and the Monthly Sales Report are quite effective in this task.
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