What is Financial Planning?
Financial planning is the structured process of setting financial goals, projecting required resources, and defining the actions needed to achieve them, integrating revenue targets, cost budgets, capital expenditure, and funding plans into a coherent strategy.
How It Works
- Strategy: set 3 to 5 year financial goals aligned with corporate strategy.
- Annual budgeting: detailed P&L, cash flow, and balance sheet plans.
- Capital allocation: prioritize investments by ROI and strategic fit.
- Performance tracking: monthly review of actuals vs. plan.
Saudi Context
Saudi corporate financial planning is increasingly anchored on Vision 2030 themes (localization, technology adoption, ESG) and Saudization quotas. Saudi family businesses are also formalizing financial planning processes as they professionalize ahead of generational transitions or IPOs on Tadawul’s Main or Nomu markets.
Example
A Saudi family business sets a 5-year goal to triple revenue from SAR 50,000,000 to SAR 150,000,000, planning SAR 30,000,000 in capex (new warehouse + e-commerce platform), 25% headcount growth, and a Series B equity raise in Year 3.