“Financial Planning of Entrepreneurs”.

I’m saying hello to my wonderful members of this amazing community on Steemit. Also, I would like to give thanks to @mainuna for being the one who organized this contest.
It won’t be nice to experience a contest like this without having to invite my friends and that’s why I’m inviting @ability20 @mou.sumi and @eluustanley.

How does financial planning ensure the long-term sustainability of a business?

I know a lot of us think financial planning is only about how much people use in starting a business which is the capital but I’m here to tell you that financial planning doesn’t end there.
Financial planning is a process in which the current financial situation of a business is assessed so as to experience better planning for its future.

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Financial planning is knowing the amount of money you’ve got and how to invest with it so that you can make profit. It is also very important to note that financial planning is one of the fastest ways in which a business person or investor can calculate his profit.
This way, it will enable the business owner to make the right investment that will yield a reasonable profit.

What is the role of savings in dealing with unexpected expenses?

Why do we save in the first place? We save because of emergency days or emergency moments. The money we save or savings account will be used to settle unexpected expenses. It is very important for a business person to have extra savings because there are so many situations that may occur and will need the interference of more money.

In this way, such business will not have to rely on bank loans or any kind of loan whatsoever. This is just like a business insurance. If your business is insured which can be seen as some kind of savings as well, there will be no further need to take loans.
When a business is about to go down, that’s when the savings account comes in to function.

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What kind of financial management strategies should entrepreneurs apply to avoid financial crisis?

There are so many financial management strategies that entrepreneurs can apply to this. There will surely be one that will be suitable for every business person.

•   Savings

Savings is one of the best ways that a business person can manage finance. Let’s take for example. Let’s imagine that a business person was robbed or her shop was burgled, how do you think the business can be revived? Fine, she may buy goods on credit so that she can start up the business but don’t you think it will be necessary to have some money too. That’s when your savings comes in. Once you are a business person, you should always try to save some money because of unexpected circumstances.

•   Profit rollover 

I think one mistake that so many business people do is that they tend to spend every of their profit and the shop will remain the same which means that it won’t improve in any condition or any way. That’s a big mistake.
For example, I’m a business person and one thing I always make sure to do is that once I make some sales, I reinvest all the money including the profit back to the business. If I need to buy something, I will but always make sure that I don’t buy more than my daily profit and that happen maybe just twice a month which means that I have reinvested my profit back into the business.

Why is it important to determine startup capital for entrepreneurs?

I think this has to do with stages. As an entrepreneur, you need to know what you want to sell and make a proper research. For example, I engage in grocery business and I’m a wholesaler. Before I started this business, I made sure that I made enough research of what I will need to buy and what is likely to sell or move fast in that area. If an entrepreneur should do this, such person will have an estimate of the starting price of the business and then he will think of how to source for funds.

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Sourcing for funds can come in different ways. It can be taking government grants, loans, from your savings and support from family and friends. With my little knowledge, I do not think it is advisable to take loans especially when it is for starting a business. Though, a business may need loan for its expansion but for a new business, a loan is not advisable until you run the business till a certain level.

Share some of your own financial planning that is important to the business.

I only make use of two important financial planning strategies.
Firstly, I always make sure that I save some money. Once I make profit, I split it into two. I save one for future expenses and use the other to buy more goods.
This way, I can be able to face any financial challenge that comes my way.