There is a saying " If you don't know where you are going then
you might end up at a different place "
Many organizations understand the importance of this and try to
frame a strategy for their way forward and hence spend a huge chunk
of money and time on it. There are several benefits associated with
the strategic planning to a company and a successful strategy is
the one that is planned and implemented properly to achieve the
objective.
The importance or the benefits are listed below:
- Planning a strategy means planning your future and to get
prepared accordingly so that an organization would be proactive
rather than reactive as company can anticipate some unfavourable
situations in advance. In accordance to that, some precautionary
measures and strong strategic plans can be developed to handle
it.
- The plan gives a direction to a company by setting goals and
objectives to be achieved in future. It also offers a foundation
for growth, success, efficient decision making.
- Financial forecasting means to predict the financial
requirements by the organization. It is basically planning the
requirements and sources of funds for the future prospects or
projects that the company has in its hand. So, it helps to avoid a
situation like cash crunch or cash shortage for any project or day
to day operation.
- Financial forecasting also helps in efficient usage of money by
improving the cash cycle which also improves the operational
efficiency by budgeting, profitability and proper allocation of
funds.
- An accurate and optimal financial budget that is targeted and
well-strategized can turn into boosting of sales and the marketing
efforts into the best possible outcomes like increase in
profitability and market share of the company in the market.
- Business is a turbulent job as it can be on the peak this year
and debt driven in next year. So, in a constantly changing macro
environment and market conditions organizations that lack a strong
foundation, focus and financial foresight will struggle in this
state. So adopting a robust and successful strategic plan which
includes financial planning and management if implemented it
properly will help an organization to move forward.