A plan and goals are the keys to most successful
businesses as it gives the business a lead of where it is heading and what
goals are to be achieved. Two types of planning that are used by businesses are
strategic and financial planning. Strategic planning is used to set priorities,
strengthen operations, focus resources as well as adjust and adapt the
organization’s direction as a response to the always changing environment.
Thus, the two types of planning have different
focuses, they are linked together through the fact that both types include
defining objectives, putting the plan into effect and monitoring the different
One link between the two types of planning is that the
purpose of strategic planning is as mentioned earlier, to give you a sense of
direction for the progression of the business. By knowing which way to follow,
in other words a good mapped out strategic plan, you should be able to eliminate
and prevent road bumps on the way. If you are able to cancel out inefficiency,
it’s easier to control growth in revenue and hopefully decrease costs. As a
result, it’s possible to foresee and project budgets which can be interpreted
as stability and growth in the business. Stability and growth is of great
importance if you have investors and lenders in the company.
By using financial planning, the business budget will
become part of the financial plan and I will be easier to plan and project
realistic incomes and costs from a defined amount of financial resources.
organization or business, all departments are equally important in their fields
and each need their own plan and directions to pursue the department’s goals. Functional
departments of an organization such as marketing, operations, sales, executive
management and finance etc. therefore use financial planning to reach their
desired goals as well as their overall requirements that are to be met in every
if you break down the financial planning and apply it to each department, you
will see how each department’s use the financial planning differently. Financial
planning includes a finance plan, a marketing plan that consists of market research
and promotion, a production plan which demonstrates expenses needed for the
facilities, and a human resource plan that makes sure that to organization has
the best and most suitable staff for the job.
though the various departments have different goals, financial planning makes
sure that each department has a road map to follow for both short and long-term
activities. All areas of business are closely coordinated to the financial planning
department to act in compliance to the strategic plans toward a common goal
which is wealth maximization of the business.