Finance is an important business operation and the application of planning of this function is termed as ‘financial planning’. Financial planning is directly related with the frugal procurement and lucrative use of available funds. Financial planning is most significant of all business functions and it’s impossible to replace or eradicate this function as the business enterprise will finish in the absence of finance. The requirement for money is permanent, which begins with the establishment of an enterprise and persists at all times.

Financial plan can be defined as, “A budgetary planning document reflecting the way an organization plans to use its financial and human resources in a given year.”

Financial planning involves the determination of business purposes, strategies, plans and policies regarding finance function, which are helpful in the procurement, management and disbursement of funds in an efficient way. Whether the business is on large or small scale, this function has to be performed without any interference.

The success of business hinges upon its financial plan and the business should know how to make financial plan, how to follow it, etc. The chief objective of financial plan is to arrange funds for the business and a healthy financial plan will not ascertain the procurement of sufficient funds but their correct utilization also. A financial plan should be prepared after taking present plus future developments into consideration and its main features include: -

- A long-term financial plan should aim to reduce dependence on outside sources.
- Financial planning should ensure solvency and liquidity of the enterprise.

Arranging finance for establishing personal business is a game that one can win only with the professional abilities and clever skills. Mostly the businessmen to develop the funds use the loans from friends and family members or take out some loans from different financial institutions and don’t calculate the costs for these finance facilities which are much higher than our ways. Here is the list of sources beyond banks from where you can arrange funds for your business.

Individuals, who decide to commence the sideline business enterprise at the same time as employed at some job, can arrange the required funds from their 401(k) retirement saving accounts. Here the problem is that if you withdraw money before the age of 59 years and six months, you have to pay 10% penalty and the income taxes on the with drawn amounts.

Another option in this stage is that rather than using the amounts of 401(k) plan ask for a loan against the 401(k) accounts. You can borrow the amount, exactly the half of the amount in your 401(k) account only for the five year time period.

The home equity loan is one another name in the list of finance facility you can use to arrange funds for your business. The option allows the funds against the home equities or against your credit line. Here the problem is that if the business fails to make profits than you could lose your home.

The small business loan from government financial institutes is another option available to arrange funds for your business. This is an option where you can enjoy the lower rate of interest and easy loan facilities. The loan also provides the longer repayment schedules, and lower monthly installments.