Financial strategy

The financial strategy is the most important tool in the field of business management in order to achieve the set goals. It becomes especially urgent in the conditions of an unstable macroeconomic situation and the volatile financial market conditions.

The strategy and tactics of financial management can be general and operational. Proceeding from this, the general strategy can be formed not earlier than 3-5 years. During this time, the relationship with the budget is established, the formation of the sources of the enterprise's income , as well as the ways of forming financial resources , is determined . The operational strategy is created within one year and includes detailed information on incomes and expenses that relate to a particular current period of the enterprise's activity.

The strategy is a non-detailed, general plan that deals with a certain type of activity.

Such a complex concept as financial betting, strategies and other basic concepts of effective management will help create an integrated structure for managing the enterprise and reduce costs to a minimum, while increasing operating profit. Based on the existing system, a financial policy is formed in the most basic areas for a particular enterprise.

An effective financial strategy can provide the following:

1. Formation and preparation of strategic reserves.
2. Full compliance with the material capabilities of the company to conduct operations that are planned.
3. Finding the most effective way to concentrate available financial resources and directions for investment.

In the course of work on creating a strategy, more attention should be paid to the formation of a competitive production and sales policy, the efficient distribution of income and profits, and the mobilization of created internal reserves.

It should be noted that earlier the term "strategy" was only circulated in military terms, but recently it has also been applied in business. Professor G. Kleiner argues that a strategic decision is a decision that has a strong influence on the final result of a particular activity.

The financial strategy underlies the effective operation of the company, because it is a kind of framework, which builds the basic tasks and solutions to specific issues.

The company's development strategy can be defined in three different ways.

The first way. The strategy is based on the analysis and structuring of the entire scope of activity.

The second way. Defining a strategy based on the synthesis of known activity plans from individual interrelated solutions that relate to different areas of the company's activities.

The third way. It can be preceded as mixed, because it combines the principles of the two previous versions in different proportions.

It is worth noting that the advantage of the first approach is the priority position of the financial strategy in the role of a link between the goals, mission and objectives. The second approach has a strong side in that there is a closer relationship between the strategy and the management policy of the enterprise.

Correct financial strategy of the enterprise will help to avoid a lot of problems in the future activity of the enterprise, and maybe even bankruptcy, because the most important thing in doing business is to correctly calculate your strengths and be as confident as possible in achieving a particular result. Quite a lot of modern companies can help a beginning businessman with drawing up of the correct and thought-out way of development.