The Advantages and Disadvantages

Advantages of Financial Planning
Here are the advantages of financial planning:

  • It will help you to obtain funding if you need it.
  • It will set out clearly the money that you need to put together to start the business and then to run it for a period.
  • It will help prevent you from going into a business that will not be successful.
  • It will highlight periods where your business may need extra financial help.
  • It will help you to spot problems early so you can make plans for the necessary solution. (for example, it will highlight whether you are holding too much stock or whether your collection is less than it should be or that you will be short of cash at a particular time).
  • It will inspire confidence in lenders and banks that you may have to approach for finance.

Disadvantages of Financial Planning
Disadvantages are:

  • It can take a lot of time.
  • It can be a costly process because you will need the assistance of your accountant or financial adviser.
  • A financial plan merely forecasts and the acc...

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