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It is the goals that matter the most, be it life or business. To succeed in life or business, one needs to have clearly defined targets and a path should be laid down to achieve it. We all know that finances are key to both life and business. Likewise, robust financial planning will make sure that targets are achieved in a timely fashion and without any hiccups.

Let’s Understand What Is A Financial Road map

Although it is just another piece of paper in loads of paper that you handle every day while running your business but it is, in fact, the most vital one. Vital, both to your present and future business prospects. 

The road map lays out in detail the financial goals set by you for your business and also showcases the path to achieve that goal. A clear mention of milestones and regular checkpoints to assess progress makes the process of achieving the goals much easier. It is the most detailed sketch of your finances both current and projected. It also mentions ways to achieve it.

Now that you have understood what a financial roadmap is, let us touch upon the process of developing one.

#Step 1: Take a Pen and Paper – Write Down Your Goals…

Planning starts with pen and paper. Make a note of all the financial and other goals you wish to achieve or wish that your business should achieve. Don’t be conservative and write down even the remotest of goals or even the seemingly unachievable goals. No wonder, you might end up thinking of the most achievable one or a goal which might be nowhere in sight might be too close to achieving in the times to come.

#Step 2: Sort, Filter, Arrange, Combine, Add, Eliminate…

The next step is to filter them, arrange them in order of their achievement time, and the process combines some and even add or eliminate some if they look to be too remote and far-fetched. Arrange them as achievable, could-be achieved, and difficult-to-achieve ones.

#Step 3: Make it Rational…

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Coherence with the resources and situations is the first quality of any planning and it equally applies to financial planning. Eliminate the ones that do not fit the resources at hand and are too soon to be on the plan.

#Step 4: Contingency Fund…

Just as every nation has an emergency fund reserve so you must also have it on your plan. It is better to plan for the worse beforehand as you might not be able to anticipate what could be in the offing. For example, nobody had imagined that the pandemic could dampen the world economy to an extent that it has to affect the lives of every single person.

#Step 5: Always Pay Your Debt First…

It is an old saying that one should never take a loan and if one is in debt, one should take the first opportunity to repay it. Reason: You will have all the more chances of taking another loan when things seem to be going southwards. These days loans are a necessary evil for businesses but repaying them makes you staking a claim for a higher loan. This improves your creditworthiness and is most beneficial for the business in the long run.

#Step 6: Don’t Forget Investments?

Be it personal financial planning or business finance roadmap, investments are truly worth it. In terms of personal finance, the right investments secure future while in business, investments in the right venture, expansion plan, or the right operation could bring exceptional profits. One cannot choose spends but it is very important to choose your investments wisely. A single bad investment could be fatal for your hard-earned money and could land you in financial trouble. Investments are made to secure the future and if there is a bad investment, you end up losing the principal amount and forget about the interest.

#Step 7: Ascertain, Insure…

Ensure yourself and your business assets as well as other business operations so that you can be sure that there is a scope for a comeback in case things go haywire. For example, it is better to get all your personnel insured with personal accident policy as well as Mediclaim so that you do not have to worry about those unforeseen expenses if somebody in the office falls or some personnel’s family member falls ill. Likewise, ensuring every shipment makes sure that your processes run smoothly and worry-free.

#Step 8: Advance Planning…

Doing your financial planning means that in a way you are also planning your future. Thus, you must keep all the things in mind. Things like, how do you plan to have your business in the next 5,10 or 20 years? What turnover do you expect in the next fiscal? Your retirement planning and a lot of other things.

#Step 9: Backup Plan… 

Planning your finances is like planning your life. Have a broader view and make provisions for a change of plan in case things do not turn up as per your wishes. Every good plan has scope for every change. It is multi-faceted, has a plan for every new situation, and for every and even the most unanticipated situations. However, there are situations such as the present pandemic which are highly unforeseen and unanticipated even by the most talented brains but a good plan has a backup plan that solves even the most puzzling riddles and keeps you sailing even in troubled waters and gets you going even during the most unfavorable weather.

Thus, we can see that a financial plan or a credit roadmap for the future is an all-encompassing total of what you or your business is presented and how do you expect yourself or your business to be in the next 5,10 or 20 years. It also gives you a target and an impetus to achieve it. Besides, the business finance road map also has scope for every contingency situation, and don’t forget there are back up plans too if all the remedial measures do not work out.