Without Proper Financial Planning Your Company’s Future Is at Risk
Business owners will often avoid financial planning, assuming that if they work hard enough and achieve enough success with their companies, everything will all work out in the end. Some businesses are successful enough for this to be true, but for most this is wishful thinking. To achieve your goals and dreams – and have enough money to retire on – you need good financial planning too.
Your financial plan should involve:
- Deciding on realistic personal and financial goals
- Determining where you are financially now and where you want to be
- Creating a plan to reach those goals
- Putting that plan into motion
- Evaluating your progress periodically to determine success
- Adjusting the plan accordingly
There are many aspects of financial planning, including:
- Cash flow planning
- Investment planning
- Retirement planning
- Risk management
- Tax planning
- Succession planning
- Estate planning
Involving a Financial Planner
If you do not feel knowledgeable about the different aspects of financial planning, it’s a good idea to bring on a professional financial planner to advise you. A knowledgeable financial advisor can help you plan for both your own personal financial future and the future of your business. He can assist you in coordinating these with each other for cash flow, tax, and investment purposes.
Your financial advisor can also help you keep your communication with your CPA, CFO, insurance agent, and lawyer up to date so that no important financial issue is overlooked. While hiring the services of outside professionals will cost money, their expertise is more than worth it in the long run. Investing is complicated. The U.S. tax code is incredibly complicated. Predicting what the economy may do and how it will affect your company is a skill and an art. You choose your advisors because they have knowledge and expertise that you do not.
One thing your financial planner will help you as a business owner do is to write a business plan. Just as writing an exit plan is the first thing you should do when you begin that process, creating a business plan is the first step in steering toward a more considered and profitable business future. Business plans are necessary both as a roadmap to future goals and to help gain financing from outside bankers or investors.
If you have a business and you want it to succeed, do not ignore financial planning. If you are unsure where to begin and would like help in assembling a team of advisors for your company, Prometis Partners can help you with that. When we work with our clients, we observe carefully how their companies run and make recommendations for how to strengthen or eliminate any weak areas. Bringing in the right advisors is key to the success of any business.