What does a financial plan typically include?

A financial plan is a comprehensive document that outlines an organization’s financial goals and the strategies that will be employed to achieve those goals. It serves as a roadmap for managing financial resources effectively to meet future needs and aspirations. The core components typically covered in a financial plan include assessments of current financial standing, anticipated expenses and revenues, investment strategies, and specific financial objectives.

By focusing on the goals and the strategies to accomplish them, the financial plan provides a clear direction for financial decision-making and resource allocation. This structured approach ensures that an organization can prioritize investments, manage risks, and optimize performance over time while remaining aligned with its overall mission and vision.

In contrast, listing all company expenses, discussing only investment opportunities, or summarizing past financial performance may provide useful insights or data, but they do not encompass the full scope and purpose of a financial plan. Only detailing expenses lacks the strategic aspect of goal-setting; focusing solely on investment opportunities misses the broader financial context, and a historical performance summary does not guide future financial planning or decision-making.