You’ve probably heard the adage that “failing to plan is planning to fail.” Nowhere in business management is that truer than in financial planning, the lifeblood of any business.
At ROI Capital Consulting, we have seen many companies fail to do any kind of adequate financial planning, operating instead on a seat-of-the-pants approach to future revenues and expenses, and they almost always pay the consequences. A well-crafted financial planning model is often at the center of a well-run business, whether the business is an ongoing concern or a start-up looking for funding. A proper financial model looks in detail at all revenue streams and expenses and makes projections over the next 1-5 years.
In a fully-integrated financial model, these projections roll up into the three basic financial statements that any business owner should be well-acquainted with: Profit and Loss Statement, Cash Flow Statement, and Balance Sheet. A good financial model provides a road map to future success and its creation forces the business owner to think long and hard about exactly how the business will run, where money will need to be spent to grow, and what drives the revenue streams.
Down the road, the financial model becomes a powerful tool to look at actual expenses versus projections, to look at variances, and make corrections to the projections. At ROI Capital Consulting, we specialize in the development of sophisticated and thorough financial modelling, for businesses of all sizes, from start-ups to large organizations. Feel free to contact us for a no-obligation discussion of your business needs.