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Financial Planning
& Analysis

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Whilst some business owners may have funds to finance start-up, others need to look for alternative sources. There are two basic types of financing – debt and equity.

  • Equity financing – this may come from private or family investors, angel investors or public (crowdfunding or making the company public).
  • Debt financing – this is money that is borrowed from any source i.e. bank, family or friends etc.

When applying for debt financing, it is the norm to be asked to provide a proportion of equity financing. The difference between this sum and the amount of money borrowed is referred to as the debt-to-equity ratio.

The main difference between the two types of financing is that when seeking equity funding, you would usually give up a specific share of your business in exchange for the money contributed by investors.

Cash Flow Management

Poor cashflow has contributed to the demise of many businesses. Cashflow can be determined as the amount of cash (or cash equivalent) going in and out of a business. Value is created by generating a positive cashflow. Problems occur when you have to pay suppliers but have not received money in from customers. To keep cashflow positive, cash outgoings should be delayed if possible until money has come in. By making regular cashflow projections, you can see if problems are going to occur. Whilst these can only be based upon assumptions, they can be fairly accurate based upon customer payment histories and supplier payment terms.

Management Reporting

To keep track of company financials, it is essential to provide management reporting. These reports enable management to make informed decisions, but only if they are accurate. A well-prepared report will provide decision-makers with a glimpse into the current financial state of the business. By collecting data and tracking key performance indicators (KPIs), vital insight can be gleaned. Management reports should be easy to understand and cover a set period. They should show whether the company is doing well or not, enabling management to make changes to improve efficiency based upon constructive decision-making. This helps them remain competitive.


A Balanced Scorecard (BSC) is a framework used to guide and manage business strategy. It depicts strategic objectives, measures, targets, and initiatives. At the same time, it balances performance with financial measures and objectives. Think of it as a type of business performance management tool. It works as a methodology, identifying both financial and non-financial goals linked to strategic priorities. It also takes into account target setting and strategic projects. Businesses can use it to measure objectives and identify suitable projects that will help drive the strategy. It shows the balance between financial and non-financial aims across four areas of perspective i.e. Financial, Customer, Internal Processes and Organisational Capacity.


Enterprise risk management (ERM) is a process used to identify events that may prevent risks, threatening strategic objectives and opportunities to boost competitive advantage. Risk management is an essential part of every business so should be inbuilt into all processes. ERM is used to assess major risks, putting in place a suitable response. These responses may include acceptance, avoidance, termination, transfer, sharing, reduction or mitigation via risk control procedures.


Financial Strategy
& Reporting

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