Financial Planning Week: Here’s how to gain long-term business success

Stian de Witt

Financial Planning Week (7th -11th of October) is an annual initiative aimed at raising awareness around the importance of financial planning and presents a unique opportunity for businesses to reflect on their financial strategies.

While personal financial planning often takes center stage, it's equally critical for businesses - especially in today’s unpredictable economic climate.

For business owners, effective financial planning is not just about sustaining operations; it's about driving growth, managing risks, and ensuring long-term success.

Below are 5 key aspects of financial planning that South African businesses should focus on during Financial Planning Week, says Stian de Witt, executive head of financial planning at advisory firm NMG Benefits.

1. Business succession planning
Many South African businesses, particularly family-owned enterprises, often overlook succession planning until it's too late. The main goal of a business is to unlock shareholder value. Without a solid succession plan, companies may struggle during times of transition, whether through the retirement, death, or unexpected departure of key leadership in the organisation

By developing a well-thought-out succession strategy, businesses can ensure continuity and preserve the value built over the years and this involves identifying future leaders, creating transition frameworks, and ensuring shareholders realise maximum value from their business.

2. Risk management
The South African business environment is rife and comes with a lot of risks, from fluctuating exchange rates and economic downturns to unforeseen events like climate change. A well-structured financial plan includes a risk management strategy that covers both insurable and non-insurable risks. Part of risk management is also to have a long term plan and broken into 90 day cycles that breaks down growth into bite size chunks.

That is why business owners should regularly review their insurance policies, disaster recovery plans, and cash flow buffers to ensure they are adequately prepared for potential disruptions.

3. Cash flow and capital management
Cash flow is the lifeblood of any business. Poor cash flow management is one of the leading causes of business failure. Therefore, businesses need to regularly review and update cash flow projections and ensure that they remain solvent even during difficult times.

4. Tax planning
Tax planning is an important aspect of any businesses financial planning, yet many companies fail to optimise their tax efficiency. As the South African Revenue Service (SARS) continues to tighten regulations, businesses must stay compliant while also exploring opportunities to minimize tax liability.

Therefore, business owners need to work closely with their team, combining conversations with accountants or tax advisors and Certified Financial Planners® to ensure their business structure is tax-efficient, taking full advantage of available deductions, credits, and incentives. The one part of the team look into the past to report and the other part of the team to the future. The combination of the two is a powerful force that is often overlooked and neglected

5. Technology investment
In today’s digital age, businesses that don’t invest in technology risk being left behind. Thus, it’s important for businesses to look at their current technology infrastructure and consider future needs, whether it’s upgrading systems, enhancing cybersecurity, or investing in automation.

Financial Planning Week is more than just a yearly initiative, it’s a reminder of the critical need of the financial health of any businesses. “Whether you’re a small business or a large corporation, partnering with a Certified Financial Planner® can help you create and implement strategies that safeguard your business’s future.

Take the time to plan, and you’ll be well-positioned to thrive in the years to come”, says De Witt.