Financial Planning And Business Plan
A financial plan is a crucial part of any business plan. Every business should have a cash flow projection that will show how cash will flow in and out of the business. Financial planning has everything to do with cash flow management which helps you understand when expenditures are becoming too high or if there is a surplus.
A clear projection also gives you an idea if your business needs more investment. A financial plan puts a lot of things in perspective for you in terms of your business plan like would you run into financial risks or how much time it would take for you to break even and so on.
A financial plan also aims at revenue generation where you can plan how much to invest and in what way you can generate the revenue. It neatly segregates the various expenditures the business would need and also highlights the areas from where you will be receiving cash flow. A financial plan and a business plan are closely knit and you cannot achieve success in your business without either.
If a business plan is the vehicle, then the financial plan is its engine that runs the whole show. Liquidisation of finances is something that happens very quickly in business and your investment is gone towards expenses even before you realize it. With the help of a financial plan you will be able to keep control on the expenses for the business and will immediately know if you have crossed the budget somewhere.
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