Financial Planning and Development

Financial planning is concerned with determining how a business will afford to achieve its strategic goals and objectives. A Financial Plan Should Come immediately after setting the strategic plan of the organization, where it wants to be and how it intends to get there.

At Asset Profiling, We guide Our Clients through the entire process of describing the business of our client so that it can formally be put down with clear objectives and clear plans. Once we have described the Business Profile and set the mission and vision of Our Clients, We go ahead to develop Financial Plans with them. In short financial plans describe how much financial resources the organization will need to achieve its strategic objectives, how it intends to gather these financial sources (money) and how they will be controlled.

The Financial Plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the time-frames involved.

The Financial Planning activity involves the following tasks:

  • Assess the business environment
  • Confirm the business vision and objectives
  • Identify the types of resources needed to achieve these objectives
  • Quantify the amount of resource (labor, equipment, materials)
  • Calculate the total cost of each type of resource
  • Summarize the costs to create a budget
  • Identify any risks and issues with the budget set.

More specifically, developing a financial plan takes care of the following;

  • Financial goals: A financial plan is based on an organization’s clearly defined financial goals. Financial goals should be quantified and set to milestones for tracking.
  • Net Worth statement: A snapshot of assets and liabilities serves as a benchmark for measuring progress towards financial goals.
  • Cash flow analysis: An income and spending plan determines how much can be set aside for debt repayment, owners’ profit disbursement and investing each financial period.
  • Comprehensive risk management plan: Identify all risk exposures and provide the necessary coverage to protect the family and its assets against financial loss. The risk management plan includes a full review of insurance, liability coverage, property and casualty coverage, and catastrophic coverage.
  • Long-term investment plan: Include a customized asset allocation strategy based on specific investment objectives and a risk profile. This investment plan sets guidelines for selecting, buying and selling investments and establishing benchmarks for performance review.
  • Tax reduction strategy: Identify ways to minimize taxes on the client’s income to the extent permissible by the tax code. The strategy should include identification of tax-favored investment vehicles that can reduce taxation of investment income.
  • Estate plan: Create arrangements for the preservation and distribution of assets with attention to minimizing settlement costs and taxes. Review and update estate planning instruments.

Performing Financial Planning is critical to the success of any business organization. It provides the Business Plan with rigor, by confirming that the objectives set are achievable from a financial point of view. It also helps the Management to set financial targets for the organization, and reward staff for meeting objectives within the budget set.