Financial Planning
Financial planning involves the process of setting goals, evaluating resources, and creating strategies to manage finances effectively. It encompasses budgeting, investment planning, risk management, and retirement planning to ensure the long-term financial stability and success of a business. By analyzing current financial status and projecting future needs, businesses can make informed decisions to achieve their financial objectives.
8 Key excerpts on "Financial Planning"
- Stephan Leimberg, Robert J. Doyle, Michael S. Jackson, Martin J Satinsky(Authors)
- 2019(Publication Date)
- The National Underwriter Company(Publisher)
...WHAT IS Financial Planning? CHAPTER 1 INTRODUCTION In the purest sense, Financial Planning is, quite simply, cash flow planning. It is planning to have available the amount of cash needed at the time it is needed, or in the hands of the desired person, to accomplish an individual’s financial goals. The steps taken to implement a financial plan will be in response to these cash flow goals. For example, if a couple is currently retired and their only source of cash to maintain their lifestyle is the limited investments in their Individual Retirement Accounts (IRAs), those investments will need to be structured more for current income and less for appreciation. On the other hand, if the couple is comfortable, and that have more than enough assets to handle their personal financial needs for the rest of their lives, they may allocate more of their investments for growth in order to enhance their ultimate bequests to their children or to charity. Financial Planning can also be defined as: 1. creating order out of chaos; 2. a deliberate and continuing process by which a sufficient amount of capital is accumulated and conserved and adequate levels of income are attained to accomplish the financial and personal objectives of the client; 3. the development and implementation of coordinated plans for the achievement of a client’s overall financial objectives; 4. an effective and responsive combination of income tax planning, retirement planning, estate planning, investment and asset allocation planning, and risk management planning. Select one of the above, or select all. There seems to be no one universally accepted definition of Financial Planning. That’s understandable since the planner’s role must be as different as the needs of clients and their ability or willingness to pay for advice...
eBook - ePub- David Butler(Author)
- 2007(Publication Date)
- Routledge(Publisher)
...Chapter 6 Financial Chapter 6 planning Chapter 6 Financial Planning is a fairly general term which covers a range of different activities, from the initial estimating of resource requirements and associated costs, forecasting sales revenue, identifying ongoing operating costs and preparing the budgetary plans which combine the former information. It also involves cash flow forecasting to ensure that there are no gaps between income and expenditure, analysing breakeven levels and forecasting profits. It is because the process draws together all of the other aspects of planning the business, and then expressing those plans in monetary form, that it is so important to prepare correctly, as it is the primary point of interest for bankers and any other potential financiers or investors. The objective of this chapter is to describe the various processes involved, and the reasoning behind them, so that the reader is in a position to prepare the necessary information for his or her own business plan. The sort of information which is required by bankers is also virtually identical to the evidence requirements of Unit A4 of the NVQ in Business Planning. In particular we shall be examining the financial forecasts specified in the evidence requirements for Element A4.3, cash flow, breakeven etc., individually and in more detail later in the chapter...
eBook - ePubStart-Up Guide for the Technopreneur
Financial Planning, Decision Making, and Negotiating from Incubation to Exit
- David Shelters(Author)
- 2012(Publication Date)
- Wiley(Publisher)
...Chapter 4 Financial Planning for Maximizing Returns Having a financial strategy and a plan to execute it based on the fundraising stages is mandatory for every entrepreneurial venture seriously interested in achieving a successful exit. Too often I witness start-ups with elaborate, well-thought-out plans on how to develop, produce, market, and service their product through commercial launch and beyond. However, they fully intend to proceed without formulating some form of financial strategy or plan. Financial Planning, at least on a preliminary level, is necessary initially to determine whether you have a potential viable business. Conducting effective business planning requires an informed understanding of what is and is not financially feasible in regard to your venture. To execute your business plans requires money. Without securing sufficient funds on acceptable terms and in a timely manner, every other focus of your business efforts is moot. A financial plan serves as a basis to calculate an acceptable return on investment (ROI) and determine a successful exit strategy. A financial plan with well-defined financial objectives is a must. This chapter begins with a descriptive listing of the various benefits of formulating a financial strategy and plan for your business. Then we focus on thinking strategically in devising a financial plan, including an illustrative analogy. We then turn to the areas serving as a basis for establishing financial objectives. We introduce FREEs—fundraising effectiveness and efficiencies—on both macro and micro levels and the conceptual methods of FREE measurements before we proceed to examine the construction of an effective financial plan...
eBook - ePub- Brümmer LM, Hall JH, Du Toit E(Authors)
- 2017(Publication Date)
- Van Schaik Publishers(Publisher)
...129 8 Financial Planning: the cash budget Learning outcomes After studying this chapter, you should know the conditions for compiling successful budgets know the goals of a budget system be able to discuss the functions of budgets be able to list the limiting factors when compiling budgets be able to discuss the Financial Planning process understand the cash budget, and do a cash flow forecast for an organisation know the steps when compiling the main budget be able to discuss progress reporting and control of deviations in the budget system be able to describe how budgets can be used as a tool for financial management. Introduction The goal of an organisation is to maximise the wealth of its owners. In order to achieve this objective, the seven functions of the organisation (financial, communication, marketing, production, purchasing, human resources and information) must be coordinated throughout its various divisions. The management functions (planning, control, organising, commanding and coordination) are used in coordinating of the activities of the organisation in the achievement of its goal. Without careful planning, the chance of failure is very high. The right kind of planning and control can be achieved by means of an integrated budget system. Such a budget system is a useful management tool mainly for the planning and control functions, but also for commanding and coordination. Financial Planning and control in the organisation A budget is a plan of action expressed in monetary terms to achieve the goals of the organisation...
eBook - ePubRattiner's Secrets of Financial Planning
From Running Your Practice to Optimizing Your Client's Experience
- Jeffrey H. Rattiner(Author)
- 2020(Publication Date)
- Wiley(Publisher)
...CHAPTER 3 Developing a Well-Thought-Out Personal Financial Plan The purpose of the Financial Planning process is to provide a well-thought-out plan based on the planner gaining an understanding of client wishes and desires to help determine whether they can then become client realities. An understanding of what those client issues are, coupled with any exposures that may put them at a greater risk, and the ability to find appropriate solutions to determine a path toward those objectives, makes for a well-thought-out plan. Our role as an advisor is to understand and realize those paths. Clients need to seek a coordinated approach to the multiple facets of the daily and lifetime financial needs of clients. Some clients may be too busy to learn what they need to know, some may want to defer to the experts, others simply want you to do it with minimal involvement from them. That certainly is the wrong way to proceed. Like the financial planner, the client should understand what is expected of them up front and as a part of entering into the relationship with the planner. To be successful, clients need to have “skin in the game.” They have to proclaim ownership. They have to understand the ins and outs of the financial decisions affecting them. As I say to my students, your clients need to use a similar approach. It's one thing to be a part of the process; it's another to receive direction without a true understanding of how it could affect them if things don't go as expected. Clients cannot be at liberty to state that if something doesn't work, who can we blame? As the hired financial planner, we develop a well-thought-out plan to bring the different components together. As the “quarterback” or coordinator of the different functions that clients need to address, we can help ensure that the process is working as well as possible...
eBook - ePub- Jeffrey H. Rattiner(Author)
- 2010(Publication Date)
- Bloomberg Press(Publisher)
...This includes business software—for contact management, graphics, and database creation, for example—and business hardware—videoconferencing equipment, scanners, and highspeed /high-resolution printers, for example. Chapter 10 presents an extensive list and discussion of Financial Planning software. 8 Develop a marketing plan. A marketing plan is the road map you follow before and while you inform the public about your practice. Marketing, like advertising among consumer product competitors, can be addictive. Many planners do not know when to start a marketing program, or worse, when to stop. Marketing a professional Financial Planning practice does not need to be expensive, but it needs to be focused and monitored. An important element is an analysis of pricing. Product managers, whether selling a service or cornflakes, have to decide how to price. Is the goal to optimize price per unit or total units sold? Manufacturing organizations traditionally strive for high volume with low price points. Service organizations, on the other hand, tend to strive for high revenue per unit, as in the case of a consulting firm. The financial planner has to make a similar trade-off: many less-comprehensive planning assignments at lower revenue per unit, or fewer more-comprehensive planning projects at high revenue per unit. Chapter 7 will guide you through the development of a marketing plan. 9 Comply with all regulations. Financial Planning is a recognized professional service and is regulated accordingly. With the immense power to affect client quality of life and financial well-being comes the obligation to protect the public. Attorneys, physicians, educators, certified public accountants, and other service providers are governed first by personal ethics but also by professional licensing bodies and governmental agencies. The Financial Planning industry has more regulatory and compliance issues to address than many other service professions...
eBook - ePub- Brian Pinder-Ayres(Author)
- 2019(Publication Date)
- RIBA Publishing(Publisher)
...03 Planning the Financial Health of the Practice With the accounting foundations in place so that you know where you are and how you got here, you can then have the confidence to turn your attention to the future. Armed with the knowledge of the practice’s past performance you can start to decide what you would like to have happen next. It is important to have a long-term strategic and financial plan and to allow your thinking to break free occasionally from the tyranny of the accounting year. Although the 12-month financial period is a natural and convenient period of time to use, it can result in an unhealthy focus on the short-term view which is particularly out of step with the long-term nature of construction and architecture. Developing a Strategic Plan Many studies have concluded that there is a strong correlation between those businesses that are financially successful and those where the management team have taken the time to develop and share a vision of where the business will be in five or ten years’ time. The practice that has worked out what it has to offer that is special or different, and has identified the sort of client who would be attracted by what differentiates it from the competition, has already gone a long way to increasing its chances of being a success. Thus the annual budget process needs to be preceded by the development of a five-year plan. The five-year plan needs to define the strategic objectives for the business, and then express them year by year as a series of measurable targets or benchmarks that can be kept under review. That which can be measured can be monitored and managed. Many people seem reluctant to engage with this process and find it difficult to escape from the ‘noise’ of the day-to-day workload...
eBook - ePub- Erica Olsen(Author)
- 2011(Publication Date)
- For Dummies(Publisher)
...While your action items and goals are fresh in your mind, estimate the costs associated with the implementation of each item. All the best-laid strategic plans are subject to time and money. In this section, you look at the estimated expenses and the potential revenue. This review helps you make decisions about when to implement certain action items and whether your cash outlay generates the required revenue to meet your financial goals. As with every business, budgets are never big enough to do everything you want to do. A business can be considered a financial success when it Stays in the black and turns a profit Has a healthy balance sheet (See Chapter 4 on ratios) Generates good cash flow Produces a good return on investment (ROI) for its shareholders Attaining financial success, starts with a financial assessment that’s based on historical record and future projections. By looking at the past to help plan and predict the future, you can gain much better control over your company’s financial performance. A good financial plan gives you a detailed picture of the financial health of your business and the viability of your strategic plan. It also helps you know if you’re getting off track during implementation so you can take action before anything serious occurs — like running out of cash. To conduct a financial assessment of your strategic plan, take the following steps: 1. Estimate revenue and expenses. 2. Conduct a contribution analysis to determine if your strategies positively contribute to the bottom line. 3. Combine all your numbers in a one-year and three-year financial projection. The cold reality is you’re in business to make money. If you’re not making a return on your investment, at some point, you don’t have a business; you have an expensive hobby. Ouch! That hurts, I know, but it’s the truth. If you don’t believe this, skip this section. But if you do, your financial assessment concludes with an analysis on your ROI...
