Finance is like air for any business. Every business strives to always have enough air to breathe freely. Financial planning is like providing oxygen, which needs the right dosage. This process shows when, where, for what, and how much money is needed.
Financial planning can be compared to a navigation device. If you know where you are at a given moment and you also know where you want to be at a given time, you will have no difficulty in controlling this device and you will actually end up where you wanted to be at the desired time. But if you do not have information about where you are, you do not know where you are likely to be tomorrow, you will have difficulty being a good manager.
A financial plan is one of the most important management tools and its goal is to ensure that the company uses money, as a resource necessary for business development, as profitably and economically effectively as possible. Systematic financial planning is a prerequisite for the long-term successful development of a company. It doesn't matter if you have an idea, are now taking the first steps towards its realization, are a startup or are already a business with extensive experience and history, a financial plan is equally important for everyone. Properly planned finances determine the future of a business.
The financial plan allows us to have a complete picture of how "healthy" our company is at any point in time, how much it is able to cover various short- and long-term obligations, it allows us to control the company's revenues, expenses, profits, profitability, liquidity and, accordingly, to take or not take steps that require financial investments. At the same time, the financial plan gives us a chance to control how much we were able to accomplish what we had planned, based on it we can also analyze what shortcomings we had and what we need to take care of to correct.
Unfortunately, numbers, formulas, calculations, accounts, financial issues scare a lot of people, they don't like them, and many are even lazy. Many company founders belong to the ranks of such people, and along with all this, they also think that they should completely hand over finances to someone else (an accountant, a financial manager). Yes, you need to have a competent person (an accountant, a financial manager) by your side, but the manager himself should have information on the financial indicators that are vital to the company and the ability to analyze them, so that the right decisions can be made in a timely manner.
We all want to be successful, the goal of every startup is for their venture to pay off, every businessman wants their company to develop in the long term, reach the desired scale and be exemplary. This is impossible without planning, financial success also requires planning. Properly calculated decisions have a positive impact on the company's turnover, profit, and liquidity. A financial plan will help you avoid mistakes, reduce risks, make the right investments, ensure the company's liquidity, and achieve your goals. Financial planning involves a complete analysis of your company's cash flows and should include, for example, the following:
• Profit and loss statement
• Forecast profit and loss statement
• Sales plan
• Balance
• Cash flow statement
• Investment plan
• Liquidity plan
• Required capital structure
We know that entrepreneurial decisions often arise from the current situation, sometimes we have to deviate from the plan, but the financial plan is undoubtedly the most important tool for business management. A long-term plan makes it easier for us to achieve our goals, it is the foundation for sustainable optimization. A short-term plan is of vital importance, it gives us a chance to identify liquidity problems in a timely manner and take the necessary measures. All indicators together give us a complete picture of the financial situation of our company, and only based on this can we plan strategic steps for the development of our company.
Don't be afraid of numbers, plan, reduce risks, develop, become even more successful!
BPN Georgia is ready to be your personal advisor in this process as well. Join us for a financial planning workshop, receive individual consultations from local and Swiss experts , and don't be afraid of numbers!
"If you control your finances today, you won't be their victim tomorrow."
Emily Stroud
