Finance is the life blood of any business, hence proper financial planning is essential for the success of every business unit.
1. If you have a proper plan, then the money you have can be utilized more effectively. You know where to spend and how to spend and also you foresee your future monetary requirements and will limit your current spending to meet the future needs. In short, it gives a better financial understanding.
2. Financial planning gives you an idea of how to procure funds in case of emergencies or when the fund you have is limited. The plan will certainly consider the options available and the most cheapest and feasible option when it comes to arranging funds. You get an idea of how much extra fund needs to be arranged and through which source.
3. Another important advantage is that it helps you to wisely invest your funds. Be it fixed assets, inventory or current assets, everything requires money. A proper planning will help one to understand where to spend and how to maximize production or profit by spending in a particular manner.
4. Cash flow is a must in a business; if the flow gets stopped, it will affect the entire function of the business. Financial planning helps to stabilize or manage the cash flow by regulating the business unit's spending pattern.
5. Tax planning is another area which Indian business has to face. It is also included under financial planning.
Not only in business, but in your day to day life also financial planning is important. It helps one to have a check on their expenditure and helps in limiting it.
"Do not give up, things might not favour you always"