Would you fly on a plane if you knew the pilot had not filed a flight plan and if you knew there were no air traffic controls to ensure the plane kept to its flight path?
So why do so many businesses operate without a financial plan and without regular reviews of actual results against their plan?
A financial plan or budget should be based on the most likely scenario for future sales, profits, cash flow and financial position. ‘What if’ scenarios should also be included to determine the ability of the business to capitalize on opportunities or deal with risk. What if your business lost it major customer or supplier? Or what if you as the business owner became sick and were out of action for several weeks or months?
A sound financial plan will help you stay on course and get to your destination and navigate opportunities and obstacles.