Amber:
While financial and strategic planning are separate distinct processes, they are connected in a cyclic fashion (Thibodeaux, 2016). Financial planning is how the organization plans and manages finances (Thibodeaux, 2016). Strategic planning is when an organization develops goals to determine the path of the organization (Thibodeaux, 2016). Each process requires planning, data analytics, and implementation. I feel that financial planning should be the first planning process completed. This is because it gives you a picture of the budget you have to work with. Knowing how much money you have to allocate towards various projects will allow you to choose the plans best suited for your organization. You can establish goals through strategic planning; however, you wont know the best way to reach those goals without knowing what funds you have to spend. In theory, a good strategic plan can help to create efficiencies and cost savings which can create a better financial plan for the following year (Thibodeaux, 2016). When changes occurs in either process, it may require re-examination to determine if funds will allow the organization to achieve the goal or if plans need to be revised.
Thibodeaux, W. (2016, October 26). The Relationship Between Strategic & Financial Planning. Retrieved from https://smallbusiness.chron.com/relationship-between-strategic-financial-planning-21063.html
Shakeil:
Strategic planning is an organizational management tool that is used to set priorities, focus energy and resources, strengthen operations and ensure that employees and other stakeholders are working toward common goals. (www.balancedscorecard.org). Financial planning sets priorities and goals for the organization and maps out clear strategies for achieving them A financial plan is a comprehensive document that includes details about a companys cash flow, savings, debts, investments, insurance and other elements of the organizations financial life. (www.nerdwallet.com).
Strategic and financial planning works cohesively in a company. Any change to the organizations budget necessitates a reevaluation of the current strategy in place. (smallbusiness.chron.com). There are several steps involved in both strategic and financial planning. The first step is to ensure that everyone in the company is on the same page and aligned with the organizations vision, mission, and goals. Next, it is important to prioritize the companys objectives, in order to maximize the organization’s resources and avoid wasting time and money on projects or activities that are not important. Performing a SWOT analysis is also important at this time. This will determine if the resources the business currently has will help them reach the defined goals and objectives. After ensuring that all goals are aligned with the vision and mission of the company, it is time to put the plan in place. The final step a continuous monitoring both plans and adjust them if necessary.
Although everyone will ultimately be responsible for utilizing the strategic plan, the CEO is responsible for implementing the plans and ensuring that the company is heading in the right direction. Therefore, I believe that strategic planning should be the first step an organization should initiate.
References
The Basics of Strategic Planning, Strategic Management and …Retrieved from www.balancedscorecard.org bsc-basics strategic-planning-basics
The Relationship Between Strategic & Financial Planning …Retrieved from smallbusiness.chron.com … Strategic Planning
What Is a Financial Plan, and How Can I Make One …Retrieved from www.nerdwallet.com blog investing what-is-a-financial-plan-how-…
Damien:
Investopedia defines financial plan as a comprehensive statement of an individuals long-term objectives for security and well-being and a detailed savings and investing strategy for achieving those objectives. In some scenarios there is a distinctive amount of board members who work alongside each other in the planning of the long-term scenarios that the business wants for itself or even work alongside with a certified financial planner for assistance. When it comes to a small business, owners will develop a strategic plan that represents the process of documenting and establishing the direction the company wants to proceed for future success. Plan often develop the ideas of potential challenges and opportunities the business could be presented with and how they will be able to overcome and be able to become successful. In my opinion business owners definitely need to be involved but also the business owners legal team which includes an attorney, any partners, and financial advisors. I think that each business is different and unique in their own way. In my personal opinion, I think you need a financial plan before you can have a strategic plan. In the business world you need to have money which comes from a financial plan which includes your startup money and then how your business will obtain income. The financial plan can provide that for the owner or potential owner of a business.
Kagan, J. (2020, February 5). Understanding Financial Plans. Retrieved from https://www.investopedia.com/terms/f/financial_plan.asp
Vo, E. (2020, January 27). What Is Strategic Planning? Strategic Planning Process. Retrieved from https://sba.thehartford.com/business-management/what-is-strategic-planning/
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