4.3 Financial planning

The task of financial planning is to determine the capital requirements of a company and to ensure the procurement of capital. The determination of the company's goals must be harmonised with the goals of financial planning.

Capital requirements arise from the fact that the company has to make investments and expenditures that are not directly matched by any income, or at least not by income of the same amount. The capital requirement calculation determines to what extent and at what time capital is required.

Financing and raising capital is a complex challenge for many entrepreneurs. For a start-up, it is as much about initial investment as it is about liquidity management.

Funding includes:

• The financial plan determines what the capital is to be used for and how it is to be raised (use of capital, investments, etc.).
• The capital requirements calculation, it determines how much capital is needed.
• The use and raising of capital is also referred to as financing.