Relationship Between Structured Financial Planning and Firm’s Growth: Study on the Small Companies in Bangladesh.

Abstract

Structured financial plan is prerequisite to the survival of the firms,
especially when the firms are growing from very small to large. Studies showed that
48% of the small companies totally failed and another 31% cannot operate smoothly
due to wrong financial planning. This study has searched for existing methods of
financial planning, techniques used, and accumulated recommendations based on
practical experiences shared by financial managers of small firms in Bangladesh. A
total of thirty two such firms were surveyed on different aspects of effective financial
planning process with a vision to study the use of serious financial planning and its
influence on the overall company growth. The study shows strong correlation
between adoption to structured financial planning and growth of profitability. Use of
technology, daily activity based planning, resource economics, reduction of owner’s
dominance, recruitment and training of effective human resources and setting up
SME advisory policy with respect to effective corporate governance are the
important suggestions by the managers to develop the financial planning system of
their companies.