Financial planning: how to create one from scratch?
Posted: Mon Dec 09, 2024 5:07 am
First, it is possible to separate the expression “financial planning” according to its words for a better understanding of the topic. Thus, “planning” means creating a plan to optimize the achievement of a certain objective. Then, “financial” is related to finances, that is, money: both investor database personal and that of an establishment.
Therefore, financial planning is nothing more than organizing your personal finances. The focus is on greater predictability of cash flow in the coming weeks/months/years. This reduces potential problems with excessive spending at the end of the month.
Discover our financial services and organize your company !
Click here
Why is financial planning necessary?
image of coins and paper notes
As mentioned before, Financial Planning allows for greater predictability of cash flow in general. Therefore, this tool allows finance to act on future investments, but also to achieve green at the end of the months.
In the view of Ross, Westerfield, Jordan (1995, p.522): “Financial planning determines the guidelines for change in a company. It is necessary because (1) it establishes the company’s goals. This motivates the organization and generates benchmarks for performance evaluation. (2) The company’s investment and financing decisions are not independent, so it is necessary to identify their interaction. (3) In an uncertain world, the company must expect changing conditions as well as surprises.”
How to create a financial plan from scratch?
Cost recording
First of all, the most important step in financial planning is to have an adequate record of expenses in a well-organized online spreadsheet. The best way to do this is to separate fixed costs from variable costs, in addition to using a suitable spreadsheet template. For example, check out our tab of free spreadsheets to use in your business and ensure a format that suits your needs.
Fixed costs are those that have the same values every month. Some examples are: rent, condominium fees and internet. On the other hand, variable costs do not have the same value every month, depending on the amount of use or productivity. Other examples are: electricity, water, sales commission, raw materials and logistics and delivery costs.
Revenue Record
After calculating the year's costs and separating them into fixed and variable costs, it's time to estimate the company's revenue for the year. Separating revenue into months is a good strategy. If it's a personal plan, use your salary, vacation, 13th salary, any bonuses, rent, and any other expected resources. Don't know how to calculate all your expenses? Consult our team and carry out a personalized cost analysis with us.
Therefore, financial planning is nothing more than organizing your personal finances. The focus is on greater predictability of cash flow in the coming weeks/months/years. This reduces potential problems with excessive spending at the end of the month.
Discover our financial services and organize your company !
Click here
Why is financial planning necessary?
image of coins and paper notes
As mentioned before, Financial Planning allows for greater predictability of cash flow in general. Therefore, this tool allows finance to act on future investments, but also to achieve green at the end of the months.
In the view of Ross, Westerfield, Jordan (1995, p.522): “Financial planning determines the guidelines for change in a company. It is necessary because (1) it establishes the company’s goals. This motivates the organization and generates benchmarks for performance evaluation. (2) The company’s investment and financing decisions are not independent, so it is necessary to identify their interaction. (3) In an uncertain world, the company must expect changing conditions as well as surprises.”
How to create a financial plan from scratch?
Cost recording
First of all, the most important step in financial planning is to have an adequate record of expenses in a well-organized online spreadsheet. The best way to do this is to separate fixed costs from variable costs, in addition to using a suitable spreadsheet template. For example, check out our tab of free spreadsheets to use in your business and ensure a format that suits your needs.
Fixed costs are those that have the same values every month. Some examples are: rent, condominium fees and internet. On the other hand, variable costs do not have the same value every month, depending on the amount of use or productivity. Other examples are: electricity, water, sales commission, raw materials and logistics and delivery costs.
Revenue Record
After calculating the year's costs and separating them into fixed and variable costs, it's time to estimate the company's revenue for the year. Separating revenue into months is a good strategy. If it's a personal plan, use your salary, vacation, 13th salary, any bonuses, rent, and any other expected resources. Don't know how to calculate all your expenses? Consult our team and carry out a personalized cost analysis with us.