Introduction to Financial Planning

We are introducing financial planning on the basis of IlexFS channel video. In this video, video maker assumes financial planning just like the planning of planting sweet fruit tree. When you buy the sweet fruit plant from market, you can not know all other works which are hidden and also without doing, you can not get sweet fruit. Same will happen on your business, you can start business but without financial planning, you can not know what are decisions, you have to take, what is capital structure,  you have to make. There are many things in financial planning and video maker explained all these things wonderfully with simple example of plant and its planning up to its becoming of a true full of sweet fruit.

1st Thing - Water = Budget Surplus

Budget surplus is just like water, without this water plant can not grow. Its means, all financial cost must be under budget and budget surplus will be helpful to grow your business. It also means that company has to make budget first before doing anything in financial planning.



2nd Thing - Water Tank = Emergency Fund

When you create a kitchen garden, you buy the water tank for continue supply water to your plant. Same thing is for business, you need emergency fund to operate your business. How much should it? It will depend on your expenditure pattern and income security. Now, question will be asked by you, how can it be created. Try to solve it with the help of your retained earning.

3rd Thing : Your Own Home or Kitchen Garden = Security for Your Funds

Suppose, you go to playing ground and plant a tree. What will happen? Some one will break your plant before becoming it tree. So, for security of plant, you need your own home. Same thing in financial planning, you must think security of your own fund which you have to invest. Even, you are earning just 3.5% on your saving account in govt. bank, but your money is safe. This is important point in financial planning.

4th Thing : Pesticides - Tax Saving Plans

You see some worms  are very harmful for your all sweet fruits will not produce due to this, so it is very necessary to use pesticides. Same thing, will happen in your financial structure. Financial structure will be in such a shape that you can give more tax saving plans to your customers and also get only tax saving plans.