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orion_joel
08-17-2008, 02:12 AM
Hi All,

I have worked for a number of very large companies, and while i have been generally in relatively entry level positions compared to management and such, i have generally gained positions to a level that different parts of the financial plan have been shared to help me improve performance for my area, by knowing how it affects the company as a whole.

What i have come to realize is that financial planning is very much something that most every large company spends a lot of time calculating a plan and attempting to follow that plan as best as possible. This i think is the key to some of the largest companies success is being able to formulate a plan and follow it.

Who here has taken the time to work on formulating a financial plan for their business, and has it been something that has helped or hindered growth? Has been something that has been created and forgotten or continually improved?

I look forward to hearing comments and thoughts on this topic.

Spider
08-17-2008, 06:45 PM
My Monthly Cashflow Projections that I explained in this thread (http://www.small-business-forum.net/financing-your-small-business/194-what-your-main-source-financing.html#post1960) consititute financial planning - and Yes, they were updated monthly and contributed greatly to the company's progress and growth.

orion_joel
08-18-2008, 01:07 AM
Frederick, yes that is exactly what i mean, it sounds like they helped you out a number of times.

How far did you take the level of financial planning. I know some companies i have worked for take it quite far, in as much as working out everything as a percentage of revenue (or expected revenue) and trying to keep within the set range. For example they may estimate remuneration should come in at about 10-15% of revenue (they usually try and set a specific target based on expected revenue from historic records).

Do you think in the early stages of business it is worth putting a lot of time into the financial planning, in the respect of spider's method, and my example above. Or is it better to work towards this level of financial planning as it is needed within the business.

Spider
08-18-2008, 01:44 PM
My Monthly Cashflow Projections were the total extent of our financial planning. Mind you these were looking twelve months out and I did one every month. This 'doing one every month' was not just a monthly update - it was a 12-month projection done from scratch every month. We had no need for anything more. In fact, the projections were central to our management, being the guide by which we worked. The 'management work' being primaily to make sure the good bits happened and the bad bits didn't. So, they didn't just help us out a number of time, Joel, they helped and guided us all the time.

I didn't include any percentage calculations as you described, nor did I try to keep within a formula of any sort. What you seem to be describing, Joel, is something that senior management might prepare for others to follow. My projections were prepared by me for me to run the company. The sole criteria was to never be in a position were there was less money coming in than was going out. If we maintained more money coming in than going out, I felt sure the profit picture would take care of itself.