Financial planning is a step-by-step process of creating a cash flow analysis for an investor. According to Dlabay & Burrow (2007, p.5), for PET GROOMING COMPANY to have a comprehensive financial plan, its team must adhere to the following process:
Step 1- The team must determine the company's current financial situation with regard to income, savings, operating expenses as well as the company’s debts. As a result, the team must prepare a list containing debt balances and current assets, as well as the amount of cash spent for various items (Dlabay & Burrow, 2007, p.11).
Step 2- The team should establish clear financial goals. These goals should be Specific, Measurable, Attainable and Realistic Targets (SMART). In addition, my team should periodically analyze the company's financial goals and values. Specific financial goals play a key role in financial planning. Moreover, I will give my team members an opportunity to suggest the financial goals for the company. However, the team must reach for consensus for the goals the company must pursue (Dlabay & Burrow, 2007, p.12). These goals must develop an extensive saving and investment program for the company's future financial security.
Step 3 - My team should also identify alternative possible courses of action which will involve developing alternatives for making decisions that are good for the company. Although, several factors will impact the alternatives currently available, the team should continue and expand the current situation if it is favorable. However, the company may change the current situation by taking a new action if it does not fulfill the company's financial planning requirements (Dlabay & Burrow, 2007, p.12).
Step 4 - The team shall evaluate the possible courses of action identified in step 3. The evaluation should consider the company's current situation, values and current economic condition (Dlabay & Burrow, 2007, p.13). In addition, my team should take into account the consequences of taking a particular alternative from available alternatives. This should involve the cost-benefit analysis as well as opportunity cost evaluation. However, the team should choose the best alternatives for the company’s financial journey.
Step 5- Finally, the company's financial planning team should evaluate the associated risk with each decision is made. Since the company is seeking future financial security, my team should select decision with medium risks such as saving and investing in medium risk stocks, accepting bids from the lowest bidder possible, as well as avoiding unnecessary expenditures and upholding high integrity in the company's financial transactions (Dlabay & Burrow, 2007, p.13).