Steps To Put Together The Best Financial Strategy For Your Company
Putting Together A Solid Financial Strategy Is Crucial To The Success Of Any Sme.
For this, it is necessary to design the financial strategy for the SME.
When we refer to the financial strategy, we refer to the financial instruments the company must use to finance itself.
Logically, it will be necessary to separate long-term financing from short-term financing.
Regarding long-term financing strategies for SMEs, we will focus on financing non-current (fixed) assets.
Short-term financing is the financing of current assets (current).
The first thing we do is carry out a financial economic analysis.
Although it is necessary to detect the operational needs for funds (NOF), it is also necessary to know how the business evolves, so we need to project the Income Statement and Balance Sheet.
Once the analysis has been carried out with the projections and with the amount of the NOF required, it is necessary to analyze the bank pool of the company.
That is, the financing available to the company to see if our banking pool covers the NOF the business needs to operate.
Not only is it necessary to analyse the quantities, but we also analyse whether the instruments available are needed.
Here Are Some Steps You Can Take To Put Together Your Sme’s Financial Strategy:
Set financial goals: First, you should set clear and specific financial goals for your SME.
This may include revenue, profitability and growth targets.
Analyse your current finances: Next, you must analyze your current finances to understand the current financial situation of your SME.
Review your financial statements, including the balance sheet, income statement, and cash flow.
Identify your financial strengths and weaknesses: Once you have analyzed your current finances, identify your strengths and weaknesses to focus on improving your finances.
Develop a budget: Develop a detailed budget that reflects your financial goals and helps you control your spending.
Evaluate your financing options: If you need financing to grow your SME, evaluate your financing options: bank loans, collective financing, angel investors…
Keep track of your finances: Once you have implemented your financial strategy, keep track of your periodic finances.
Review and adjust your financial statements to ensure you’re on track to meet your financial goals.
In Summary, Putting Together A Solid Financial Strategy Is Essential For The Success Of Any SME.
By following these steps, you will be able to establish:
- clear financial goals
- Analyze your current finances.
- Identify your financial strengths and weaknesses
- Develop a budget
- Evaluate your financing options
- Do regular monitoring of your finances.
In addition, SMEs often face challenges in obtaining financing for their operations and growth.
However, several strategies can help SMEs access the capital they need to maintain and grow their businesses.
Here Are Some Financing Options For Smes:
Bank loans: SMEs can apply for loans from traditional banks.
These loans often have strict requirements, such as a good credit history and collateral to back them up. However, if the requirements are met, it may be a viable option.
Crowdfunding: involves raising funds from a large group of people through online platforms.
It is important to remember that this is not a loan but rather an investment in the business.
Angel Investors: Angel investors are people who invest in early-stage SMEs.
These investors often have business experience and can provide additional advice and resources.
In some cases, it can be a valuable source of financing.
Venture capital: Venture capital is similar to angel investor financing but often involves larger investments in more established companies.
Venture capital investors often look for companies with high growth potential and are willing to take more risks.
Microcredits: Microcredits are small loans that are granted to SMEs and entrepreneurs.
These may have less stringent requirements and may be a good option for those who do not meet the requirements of traditional banks.
Reward Crowdfunding: Reward crowdfunding involves raising funds in exchange for a reward.
This option can be useful for SMEs seeking financing for specific projects.
In summary, SMEs have several options to obtain financing.
It is important to carefully research and evaluate all available financing options before deciding.
In short, in your financial strategy, you must ensure that you are very realistic when making your projections so that they are infallible.