What is the difference between a business plan and a financial plan

Money is a headache for many business owners, because, regardless of profit, they are constantly in short supply. In practice, such situations often arise if people do not know how to properly manage money, that is, they do not draw up a financial plan. We will tell you what it includes and how it makes life easier for owners.

Financial planning: what it is and why

Financial planning is an integral part of the company's development. Everyone understands that it means writing financial plans, but they do not fully understand the very concept of "plan". For example, when managers are asked to provide them with a sales plan, employees think about a certain number - income. But in fact, they must make a list of tasks that will allow you to get such an income.

The task of financial planning is effective financial management, or financial management. It should be a controlled, automatic process for receiving and distributing funds. True, many business owners and managers still choose manual financial management, and this is their mistake. Trying to save money, they personally control all cash flows, spending all their time on it. The company only loses from this, because instead of engaging in its development, developing a strategy, the head plunges into operational activities.

In this case, funds may be incorrectly distributed. For example, often mandatory items of expenditure are not allocated, taking into account the strategic plan. Money reserves are not created, which, when difficult times come, will help the business to stay afloat, and its management - to successfully get out of the crisis.

Financial planning helps to solve all these issues.

Financial Planning Concepts

A financial plan is, in a global sense, a plan for changing financial indicators by which a company's solvency and business success are judged. Financial planning comes down to planning the company's income and expenses. Consequently, the objects of financial planning are profit, capital, credit money, expenses. These include financial relations, the relationship between individual elements of the value of GNP, which appears during the distribution of funds.

The goal is to balance the costs and revenues of the company from all types of its activities, assess the efficiency of resource use, and increase income.

Financial planning functions are also important. Let's consider them in more detail.

  • Security. When planning, risks are taken into account, and, as already mentioned, a separate item of expenses is drawn up - the company's cash reserves (usually 3-5% of the margin per week is enough to accumulate a "safety cushion").
  • On-farm coordination and integration. When developing a financial plan, you should take into account the needs and interaction of various departments of the company. On the one hand, in order to receive funding, department heads must draw up applications for the purchase of certain goods, payment for services. On the other hand, the financial plans of different departments should be interconnected. If a huge amount is allocated for promotion (distribution division), sufficient funds should be allocated for the technical department (production). Otherwise, the company will not be able to cope with the large flow of customers.
  • Optimization. The job of the people who make the financial plan is to choose the best options for using resources so that the business will only benefit from this. For example, if there is not enough money to cover all expenses this week, you can reallocate funds so that more is spent on advertising. It is she who brings income, so you should not save on it.
  • Control. Financial management allows you to continuously monitor the activities of the company's branches.

Principles

Financial planning is based on 7 principles.

Own business: juice production

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Ministry of Education and Science of the Republic of Kazakhstan

West Kazakhstan State University. M. Utemisova

Faculty of Economics and Management

"Financial planning as an integral part of the organization's business plans"

Student of group 09410 "Finance"

Introduction Chapter Financial plan as an integral part of the business plan

D

Financial planning as part of a business plan

The popularity of freshly squeezed juices is growing every year. This is largely due to the low quality of juices on store shelves. The buyer is willing to pay more for the best quality. The raw materials for production are quite cheap, and the juices themselves are sold with a 100% wrap. That is why fresh juices are a very profitable business as a business.

Among all sections of the business plan:

  • Cover Page
  • Confidentiality Memorandum
  • Executive Summary
  • Investment Plan
  • Marketing plan
  • Production plan
  • Organizational plan
  • Financial plan
  • Risk analysis

the finance section is responsible for providing summary monetary information. In general, all business plans can be written using different techniques and according to different requirements. Their format will largely depend on the goals of the project, its scale and main characteristics. The same differences may be present in the financial sections of such plans, however, as a rule, the process of writing this chapter can be divided into several main stages, namely:

  • Estimated standards;
  • General production costs;
  • Cost estimate and calculation of the cost of goods or services;
  • Report on the main financial flows;
  • Profit and loss statement;
  • Estimated financial balance of the project;
  • Analysis of key financial indicators;
  • Description method (methods) of financing.

The structure of the financial plan of the business plan

Calculation standards

This clause must define and describe the following points:

  • Prices that will be indicated in the business plan (constant, current, with or without taxes);
  • Taxation system, amount of tax, terms its payment;
  • The time frame covered by the business plan (planning horizon). As a rule, this period is about three years: the first year is described in more detail, divided into monthly periods, while the following years are divided into quarters.
  • Indicate the current inflation rate, inflation data for the last few years. Taking this factor into account regarding the prices of consumables, raw materials, etc. - everything that will need to be purchased for the implementation of the described project.

General operating expenses

The salary data correlates with the information previously stated in the organizational and production plans.

Variable, ad hoc costs depend on the characteristics of production, goods, services. Various factors can be taken into account here, for example, seasonality. It is possible to make correct calculations of variable costs only by analyzing the volumes of goods or services provided and the approximate levels of sales.

Fixed, regular costs depend on the only variable - time. These expenses include expenses for business management, marketing, premises support, equipment maintenance, etc.

Estimate of costs and calculation of the cost of goods or services

1 Theoretical foundations of the study of a financial plan in the business planning system

1. The essence and purpose of financial planning in the enterprise

1. Business planning in the enterprise management system

1. Financial plan as part of business planning

2. Analysis of drawing up a financial plan in Pavlovskinvest LLC

2. General characteristics of the activities of Pavlovskinvest LLC

2. Analysis of the financial condition of Pavlovskinvest LLC

2. Analysis of the financial section of the business plan of Pavlovskinvest LLC

3. Recommendations for improving the financial planning of Pavlovskinvest LLC

3. Ways to Improve Financial Planning

3. Development of an investment project

Submit your good work to the knowledge base just Use the form below

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FEDERAL STATE AUTONOMOUS EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

"SOUTH FEDERAL UNIVERSITY"

on the topic "Financial plan in the business plan of the enterprise"

4th year students 72 groups

specialty "Finance and Credit"

Sofia Mikhailovna Treneva

1. Theoretical foundations of business planning

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