7 Keys To Financial Planning
No matter what industry you work in, your goal is likely to expand your company and improve your market share over time. You may be content with 10 employees, but you’d really like to have 100.
You may be happy breaking $1 million in domestic revenue, but your true goal is to break into overseas markets and multiply those earnings many times over. These are simply two examples, but every company–from a startup to an established brand–has some idea of the future growth they’d like to see.
The key to financial planning, then, is to focus on scalability so that your plan can adapt and change with your business. This can be reflected in things like:
- Data gathering
- Statistical analysis
- Expense forecasting
- Revenue forecasting
- Tax considerations
- Payroll requirements
- One-year and multi-year budgeting
Your operating costs are going to change every single year. An inflexible plan doesn’t allow you to budget in a way that reflects your true costs. This can cause you to miss the mark on your budget and financial goals. But it’s not your company’s fault; it’s the fault of your financial plan. If you have a dynamic plan that is geared toward growth and developed with your unique needs in mind, you can hit those marks and plan accurately for the future.
When considering that future, you want to think about things that may become pressing needs, even if they are not now. That doesn’t detract from your current needs–such as meeting payroll and daily expenses–but allows you to also consider how your financial system should address things like:
- Future hiring frenzies as the company grows
- More pressure on research and development as you move to expand your product lineup
- A greater tax burden as your company earns more each quarter
- More complex business expenses and tax write-offs
- A focus on offering a more attractive benefits package as you seek to bring in top talent from the industry
- Forecasting for future purchase trends as competitors open their doors, take their products to market or fold as you dominate that market
- Tax implications of working in other countries or even simply other states
One of the biggest potential changes is when you set up an Initial Public Offering (IPO) and take your company from private to public. This a massive change that can fund unbelievable growth, but it’s also a complex process that requires you to consider the needs of current investors, future shareholders, and founders or top-level executives. It’s not a change you make lightly, and it can impact the future of your company for decades or even generations to come.
At the end of the day, no business is 100% stable. You’re always growing, changing, reacting to the current market environment, cutting costs, increasing the workforce, or making a multitude of other changes that impact your financial position.
This is why it’s so critical to work with a proven firm like Rialto Accounting. We use our experience and understanding of your company’s specific needs to create a scalable plan that can grow with you, and we offer lifetime support and guidance to help you succeed.
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