Financial Management For Real Estate Start-Up
Sound financial management is essential for a successful start. The comparison between target and actual values in the income statement shows you how much you deviate from the original planning in terms of sales and costs. Liquidity planning is about identifying bottlenecks at an early stage.
In addition, there is financial planning, which provides information about further capital requirements and is therefore important for long-term financial management.
Financial management: Compare target and actual
You have set important milestones in your business plan and developed a financial plan including a profit and loss account. When implementing the business plan, you should now compare the income statement figures actually achieved with the income statement plan figures for solid financial management.
Checking the profit and loss figures in financial management helps you to identify deviations at an early stage so that you can then take countermeasures if necessary. Financial management helps you to recognize signs of a company crisis at an early stage. Financial management is also important if buyers will should pay cash when it comes to selling your house.
When comparing the income statement plan figures with the income statement actual values, you should compare the respective sales figures, but don’t forget the cost side.
If, according to financial management, you are below budget in terms of expenses, you can consider investing more in marketing to better advertise your offer.
Liquidity planning in financial management
Solid liquidity planning is essential for a successful start-up and therefore also important for financial management.
One of the most common reasons freelancers fail in the first few months is a lack of cash.
Even if the company is developing well, liquidity problems may arise possibly even because things are going very well. Liquidity planning is therefore an essential part of your regular financial management.
Therefore, pay close attention to liquidity, especially at the beginning of the business start-up. Consistently carry out liquidity planning in your financial management.
Financial planning and financial management for the future
In addition to analyzing the current numbers, you should also look ahead when it comes to financial management. Continuous planning helps you to be well prepared for the future. In future-oriented financial management, financial planning is important in addition to income statement and liquidity planning.
In financial planning, you determine in detail the capital requirements that you will need in the future for company growth.