intelligent

Financial planning needs to be a priority for SMEs , whichever stage they are in their journey . Without it , the opportunity for growth will be small . And it is a plan which needs to be adjusted all of the time , as cash flow changes . Gareth Anderson , Head of Business Management at Allica Bank , discusses the steps SMEs can take to good financial planning .

HEN IT COMES to running

When there is time to think ahead , there are growth strategies to develop , marketing plans to roll out and recruitment drives needed to keep the engine running . Nevertheless , I am constantly reminding the SMEs I work with that , while there are a million other priorities to be seen to , financial planning is crucial and shouldn ’ t be overlooked .

Without the right financial plan in place , there is no budget for recruitment , marketing or growth or what funding there is might be unsustainable or better directed elsewhere . So , financial planning should be a key pillar in any SME strategy . But what is financial planning , and what does good look like ?

Taking stock

Unlike setting a broad business strategy and then spending a year working towards it , financial planning is more like a constant process of tuning and modification . Cash flows in and out of a business daily . Often , this cash flow will be predictable , making financial planning easier . On other occasions however , it may not be .

A business might gain or lose a client , impacting cash flow . Perhaps a big order comes into a business , meaning production needs to be ramped up and bigger premises found . A new investor might come onboard and give the business a cash injection . All of these things and more mean that financial planning is more a constant process of iteration rather than a fixed document .