There is one simple reason to understand and observe monetary planning in your business - to avoid failure.
Eight of ten new businesses fail primarily because of the lack of good fiscal planning.
Financial planning affects how and on what terms you will be able to attract the funding required to establish, maintain, and expand your business. Financial planning determines the raw materials you can afford to buy, the products you will be able to produce, and whether or not you will be able to market them efficiently.
It affects the human and physical resources you will be able to acquire to operate your business. It will be a major determinant of whether or not you will be able to make your hard work profitable.
A clearly conceived, well documented Fiscal plan, establishing goals and including the use of Budgets to ensure monetary control, will demonstrate not only that you know what you want to do, but that you know how to do it.
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