What do you do if you need to develop a financial strategy, but don't know where to start?

Financial strategy depends on who it is for eg individual or an organisation. Basically, a financial strategy is a comprehensive plan that outlines how you manage your finances in order to achieve specific financial goals. As a starting base, I would advise the following: 1. Write down what your financial goals are. 2. Look at the current available cash and then look at the future forecasted revenue and costs and plot these in a cashflow. 3. Prepare a budget that allows you to keep in check your spending. The budget can be an Income/Expenses and/or a Cashflow Budget. I normally advise to do both for companies whereas a Cashflow is sufficient for individuals. The above should provide a good starting basis for financial strategy.

When you need to develop a financial strategy but don't know where to start, begin by assessing your current financial situation, including income, expenses, assets, and liabilities. Set specific financial goals, such as saving for retirement, paying off debt, or investing in your business. Research and educate yourself on financial concepts and strategies relevant to your goals, such as budgeting, investing, and risk management. Consider seeking advice from financial professionals, such as financial advisors or accountants, who can provide personalized guidance based on your circumstances.

1.Assess Your Current Situation: Track your income & expenses for a month to understand your cash flow. List your assets & liabilities. Consider your financial goals (short-term and long-term). 2.Educate Yourself: Consider reputable websites or books on budgeting, saving & investing. 3.Set SMART Goals: Define Specific, Measurable, Achievable, Relevant, and Time-bound goals. Set clear targets to track your progress. 4.Prioritize and Budget: Identify your essential expenses & prioritize them. 5.Explore Tools 7 Resources: Budgeting apps, online financial calculators & retirement planning tools can simplify the process. 6.Seek Professional Help: If your financial situation is complex, consider consulting a financial advisor.

I would start by asking; Where are we? Where we want to be? How to go there?. Then will start analysing the current state, observing the current mechanisms and processes, and match it with the goal we want to achieve, the gap between where we are and where we want to be can be identified by that matching process, then we can start building our financial strategy.

From previous experience with bootstrapping, financial austerity is essential when developing a realistic financial strategy. Listing the steps it takes to get to your end goal and their estimated costs allows you to visualise your needs, which makes deciding what is necessary and what isn't much more structured. Once you have an idea of what your needs are, you can look into options for financing those needs according to the time frame you are working with.

In my experience, I have always found that a deep and thorough understanding of an organisations current financial reality is a good place to start and ofcourse there are various tools that can be used to gain this understanding. Your Financial Statements Analysis, Trends for key ratios, Budget Performance analysis among others can be very useful.

Research industry benchmarks and market trends to understand financial norms and opportunities specific to your sector. Estimate future expenses, revenue, and cash flow. Use this information to identify potential financial gaps or needs. Create a detailed budget that aligns with your goals and forecasts. Include operational, marketing, personnel, and other relevant expenses.

Always important to start with assessing the current financial situation. the management and decision makers need to begin by gathering information about your income, expenses, debts, and savings. This will give oneself a clear picture of where you stand financially.

Once you have identified the business levers, it's time to make the projections, build in sensitivity (best / base/ worst case), and evaluate the outcomes accordingly. These projections, based on the sensitivity of varied elements, help build scenarios and understand the upside and downside scenarios, which helps in making informed decisions.

When we talk about finance strategy, we look at the P&L and overlook the Balance Sheet and notes to the accounts. Reducing the Inventory and debtors days by 5 to 10% and increasing payables days by 10% results in tremendous savings in the working capital cost and, thus, better ROCE. So, to build an effective financial strategy, it is important to have a holistic business view.

Consider how you will fund your business activities. Explore options such as loans, investors, or lines of credit. Develop strategies to optimize cash flow, such as invoicing procedures, inventory management, and payment terms with suppliers.

Think very carefully about whether to diversity your revenue streams. You can often derive much better outcomes by focusing on doing one thing really well, rather than lots of things averagely. However, if you have obvious upsell opportunities and are confident you can land them then this may be worthwhile. Plus, it helps to de-risk your business against unexpected events.

In financial projections, consider multiple scenarios by identifying the parameters most susceptible to fluctuation. Maintain a critical perspective of the projections in relation to the realities of your sector. A saying that always comes to mind is "trees don't grow to the sky."

Study your consumer and competitors well. Determine innovative efforts that will reduce costs and perhaps intrude in areas where you are strong and your competitors are weaker. Think small innovation from daily problems consumers have. Reduce bureaucracy. Streamline to avoid consumer friction points. Develop a solid technology roadmap with limited capx (capx is both good and bad, and if you’re a public company of part of private equity, be careful with the impact of capx on shareholder equity.

Identify financial risks (e.g., market fluctuations, interest rate changes) and develop strategies to mitigate them. Regularly review your financial performance against your plan. Make adjustments as needed based on actual results and changing circumstances.

Here are three actions to take to do this: 1. Conduct a thorough analysis of expenses to pinpoint areas where cost reduction is feasible without sacrificing quality or efficiency. 2. Implement strategies such as renegotiating supplier contracts, optimizing processes to minimize waste, and investing in technology to streamline operations. 3. Continuously monitor and adjust cost management efforts to maintain healthy profit margins, freeing up capital for reinvestment in business growth and innovation. I hope that this is helpful.

Identify financial risks (e.g., market fluctuations, interest rate changes) and develop strategies to mitigate them. Regularly review your financial performance against your plan. Make adjustments as needed based on actual results and changing circumstances.

Drill down to the lowest logical operating units. Examples from real life include locations (practices in a Health organisation eg), product or services groups (specialisations in this case), discrete funded programs (in NfP's eg), cognate functions (disciplines in a university faculty eg). Compare costs across like units. Ruthlessly answer the question "do I need that function/do I need all of it"? Finally, drill down even further to the unit of production (staff positions, assets, infrastructure, inventory) and ask the same "do I need that" question. I've driven financial performance improvements in a small business (my own), two non-profits, and university faculty using this approach. It works if you've got the staying power :)

Cost management is like tending to a garden; it requires careful attention to ensure everything blooms beautifully. Take a close look at your expenses, just as a gardener inspects each plant for optimal growth. Trim away any excess, nurture efficiency, and cultivate innovation. As Benjamin Franklin wisely said, "Beware of little expenses. A small leak will sink a great ship." Let's patch up those leaks and sail toward financial stability and growth.

Of course data is critical but more so, understand why you’re having a slowdown or up turn, data should tell a story beyond the spreadsheet.

One thing I have found very helpful or I fact the only thing that makes a difference is The MONITORING! You get what you inspect not what you expect.. Regular monitoring is the key for the sustainable success!

A strong financial strategy isn't just about the numbers. It's about understanding the story your finances tell about your business's overall health and its potential for future growth. Investor Mindset: Analyze your business's financial appeal, even if you don't seek funding. This ensures long-term viability. Prepare for the Unexpected: Plan for potential disruptions (market shifts, etc.) to minimize their impact on your finances. Automate for Accuracy: Use accounting software to streamline financial tracking and reduce errors. Know Your Industry: Compare your key financial metrics to competitors to spot areas for improvement. Cash Flow is King: Don't neglect short-term liquidity needs while you focus on long-term profitability.

Very very important to regularly review and adjust your plan financial situation and goals will evolve, so it’s important to review the financial plan regularly and make adjustments as necessary

Setting up KPIs was crucial, but what mattered most was the context behind those numbers. Understanding the story they told about our business's performance helped us make informed decisions and adapt our strategy as needed. So, my advice is not only to monitor your financial metrics but also to delve into the insights they provide to steer your business towards success.

La capacidad de escuchar, analizar y ejecutar, genera resultados interesantes por lo que tener acceso a terceros con mayor experiencia financiera que logren dar un apoyo para nuestras próximas decisiones es un plus que muy bien podemos aprovechar hasta consolidar esa estrategia deseada ... No lo veas negativo y al contrario, ve lo positivo

First to develop a financial strategy you’ll need data from your business. Make sure you build your budget on the basis of hard numbers and knowledge. Don’t hesitate to get help from an advisor specialist on the matter to help you build a sustainable financial strategy for your business and make sure you follow it thoroughly with time to time updates for better performance.

The expertise needed will vary by company size, stage, and strategy. A fractional CFO can be a good answer for companies looking to improve their financials and create a better strategy.

Sometimes a financial or accounting expert isn't necessary, but it will depend and vary from business to business. Do what you know first, then bring on consultants to mitigate risk you're unaware of.

Creating a financial strategy starts with ensuring clarity around vision (destination or desired outcome), mission (operational tactics to get you there) and values (non-negotiables - guardrails to keep you on track). This may sound simple, but very few companies do this well. Understanding where you're going, how you're getting there and how you want to arrive is the foundation around which a financial model can be created. To start with the financials is short sided and can lead to frustration. Seek out wise counsel that can build a bridge between the ideal state and the current state inclusive of visionary desires and financial models. BTW, those strategic advisors with financial acumen are hard to come by.

It’s never too early to recognize the difference between financing and budgeting, even if you’re just starting out. Budgeting means making good use of resources you have or are likely to obtain in the short run to stay on a path. Financing is the path: it is an integrated and coherent picture of how you make assets, sources of present and future capital, human talent and future milestones. It’s a nonlinear problem because everything is dependent on everything else. That’s why it’s really the first step. Then you have to go out, explain your value and make it happen. Financing follows.

Creating a financial strategy should be the same way a stranded survivor approaches his safe return home - using 'game theory' and a structured breakdown of goals, assets, strengths, risks, liabilities, available options, expected outcomes, environment, and abilities. Once you establish all these on the paper or in the mind as a ledger, the financial strategy will start taking shape - target revenue, required revenue streams for goal viability, required underlying resources and investment. Risk offset by spreading revenue streams or extending the outcome duration etc. Inadvertently, you will create a very robust financial strategy. What remains would be to create proforma balance sheet or income statement using corporate finance methods.

When developing a financial strategy, it needs to support your company’s growth plan. How you plan to finance the business is integral to enabling a company to successfully execute on its growth plan. What many new entrepreneurs learn (often the hard way), is that the more you grow, the more capital you need to continue growing. For example, if you have a 120 day cash cycle-the time between when you pay for inventory or staff, to when you receive the money from your customers, you will have to finance working capital for that “cash gap”. So, if your revenue plan goes from $2 million last year to $5 million this year, you may need up to an additional $1 million in working capital to support the growth ($5-$2=$3x120/365=$1M).

Well, Currently, if you don’t have any traditional steps like Setting Goals/ Creating Budgets/ Monitoring Revenue Streams etc. to create a financial strategy; that’s not a problem; Just start using technology & tools like Ai powered platforms ( ChatGpt/ Copilot/ Ai Budgeting tools) and place your questions and understand the process from various perspectives and ideas. Assess the process to determine what works for you best in terms of Financial Planning. A financial strategy is a journey, not a destination. Review and adjust your plan as your goals and circumstances evolve. There are many resources available online to learn more about finance for Non-Financial professionals. Don't be afraid to experiment and find what works best for you.

First understand the main goal of the company and objectives to achieve. This is important to decide what financial approach that you gonna use. Identify where is the main leverages and risks to achieve the goal and results desired. Create a strategy to potencialize the leverage and mitigate the risks. Guarantee that this things will be put on the budget. Now every department will have a role in the whole budget to achieve the plan and mitigate risks. Guarantee that all departments has plans to do it and analyze and moderate the budget of every area putting challenges that can be guard rails for the worst case scenario and follow up to everything goes to the best case scenario