 In this section, we are going to discuss what are the various steps of a financial planning process. So, when we look at the overall business, sometimes we have to analyse that we need to stay at the current position or we want to, we should expand in future because day to day, due to variation, along with time, the product that you are selling in the market, due to its demand or increase, you may be interested in entering into a new business or you want to expand this current business. So, in order to make this situation financially strong or to cover it financially, we make financial plans. So, to make a financial plan, there is a certain procedure that needs to be followed. So, if we look at the various aspects that are important, considering which we can execute any financial planning process, then we can split this process into six steps. Six steps means that first of all, you have to imagine what is my financial position and what are my financial goals. How much extra money do you need in the coming year, in the next two years, in the next five years, whatever objectives you have made for your firm to meet them, or you have to maintain it at the same level, so again, you need money to maintain a certain level of production or you have to take out some variants of your product like new versions. So, for that, you will have to write an R&D, you will have to make a section of research and development, you will have to spend money on it or you have said that our sales are getting dipped. So, for that, we have to put some expenses on extra marketing or we have to change the composition of our product so that its sales are not getting dipped and we can revive its sales. So, for all these decisions, you need money. And how much money do you need and how much money do you need to spend on the heads, for that, we have to do financial planning. And in financial planning, we have defined different types of goals. To achieve the goals, there could be a number of different alternatives and to achieve a certain goal, you may have one or more options that you can use your own money and do a new product launch. So, the savings that you have done, for example, of any business, you have to take loan or borrowing. So, all these decisions will be in the form of different alternatives. You have to account for all the alternatives first and then you have to evaluate them. So, after evaluating them, you have to decide which of these options we have to select and how the entire process will take place. And again, a financial plan has to be flexible. The entire process is flexible. You have to keep flexibility in that because again, there could be some changes in the market, there could be some external factors. So, you should have space in financial planning that you can re-evaluate some of the things when new changes are coming. So, you can re-evaluate your process and you can decide the change situation in the financial perspective. So, as I have told you, the entire process can be decomposed or divided in 6 steps. First of all, you have to understand and analyze your current financial situation. This means you have to account for your income, your savings, your overall expenses and your debts. And as per that, you have to consider the decision you have to make. The second step is that you need to identify the goals that you want to do. So, as I have told you, suppose if your objective is to maintain that you have a total market share for example, 20% market share, then you have to retain 20% market share. So, for this retention, what kind of expenses do you need? Do you need new technical expertise, do you need experts in your staff and do you need new technology or do you need availability for resources? And when you have identified them, then you need to identify how many expenses you have to bear for them. So, you will have to consider what are the various goals which you are going to achieve in 1 year, in 2 years, in 5 years. The goals can be short term, the goals can be medium term, the goals can be long term and you have identified them and told them about brainstorming, critical thinking, there could be multiple ideas which you can come across but eventually you have to enlist that specifically short term, medium term, long term we will try to achieve these goals. Once you have identified the goals, next thing is, how will we achieve those goals? How much money is being paid for them, where will that money come from and when you collect the money to achieve those goals, then what will be your cost? So, you will have to consider the various alternative options which you can have in order to achieve those goals. Once you have enlisted the various alternatives that we can achieve with these kinds of resources, next you have to evaluate the alternatives which you have taken. Because some of the options can be very expensive, some of the options cannot be doable, some of the options may be very high level of technical expertise or again suppose the government has revised the monetary policy and increased the interest rates so what will happen that your cost of borrowing will increase and it could be that the different alternatives that you were looking for like how much money will you borrow from a bank or from a funding institution then it could be that with the revision of these policies those things are not efficiently or economically so we have to evaluate the alternatives and then choose the alternatives which you feel are suitable after taking them again there is another very important thing associated with all these different types of decision making that is the risk factor so when you are borrowing or you are using your own money or whatever you are because finances are involved that means there is risk involved so when we are going to consider or evaluate different alternatives funding opportunities or making all these decisions then there is a very key factor that you will have to evaluate the risk associated with different alternatives and always when we evaluate different alternatives then we consider the risk factor and this firm decides or its financial analyst or financial planner decides that how much risk can be taken on this particular stage according to that you make your financial decision making next is after considering all these points you create your own financial plan so I have already told you that when we make a financial plan then we have to take all these considerations but also we need to make it sure that there should be flexibility because even if you are making a short term financial plan 100% things are not under your control there may be some increase in the inflation or some other market scenario has changed some new technology has come your competitor has brought some new technology your sales can go from the market so you have to consider all these things and to consider this the document of your financial plan you have to maintain flexibility in which you can change its heads revise its heads so these are the important things next we need to look at that what we have made a plan a piece of paper you have to explain which steps which mayors will execute this financial plan so the entire plan in which you have mayors write that these are the ways from which we execute our financial plan so the financial plan is a very important part which is an action plan in action plan you have all key performance indicators and all objectives first you have to write objectives then your key performance indicators and eventually this is what the main goal is you have to connect with those goals so your action plan will be defined then you have to match that action plan which you made in the beginning and this work is associated with those goals next when you have linked your goals with action plan then you prioritize that you have come to know that we have to do these four work and to do these four work these are the steps these are the performance indicators we will have to bring them but first which of these four work which work we have to do on the second number which work we have to do on the third number then you have to prioritize your goals according to the situation which you are in in terms of the overall market competition your objectives according to that you have to prioritize along with prioritizing it's always a good idea to consult others that you should have experts which you can recommend that this is how I have prioritized this action plan so give a second thought second opinion but we need to make it sure that your ideas your goals your financial plan we need to make it sure that we are very confident because it is a document so you are just trustworthy people your financial consultants you are discussing all these things and other trustworthy people can also say that we have to protect ourselves so you can get insurance so you can go to the insurance agent to discuss because they have an area of insurance so they have done a lot of risk assessments so they can guide you that you have reduced the weight the weight is more according to current trends according to current scenarios we should consider that you have not done so insurance agent can guide you about different aspects so that your financial plan is better and the objectives you want to meet to help you second important expert investment experts investment experts because again they analyze the data the changes in the market they see them and they can also guide you that you should do this you should do this you can take their opinion and improve your financial plan and last point is that we need to make sure that whatever financial plan you make it should have a space of reevaluation and revision that as soon as you go through 6 months things may change your priorities can change the overall financial position can change so in that you can reevaluate different heads or revise so in that you have to keep an eye on this and this is how we can construct a financial plan in which you will go step by step so it will become easy for you to nicely develop it if you consult people you will get external opinion and when you implement it then again it becomes easy if it is documented then the implementation becomes easy for you so it is always better to have a financial plan which is developed very well and all the other things relative factors and information you should consider them like gold set you should know we have to achieve this priority wise for them there will be so much money from where will this money come how much cost will come on it and how we have to bear that cost with the way of admiring or where will that money be generated by which we will pay additional cost