A risky financial decision under consideration was made by someone who decided to purchase an already operational liquor store that had been closed for a month due to serious documentation issues. However, the person believed that it would be easy to operate an already established entity as compared to starting one from scratch. One point that should have been raising alarms was that how low the owner was willing to go when selling the store. This is one example when discussing the possibility of financial decision.
Having clearly articulated goals and a robust plan for achieving them would minimize the level of perceived risk involved in a financial decision. A financial plan providing for an effective framework for determining how business activities will be funded and monitored to ensure that the strategic goals are met. Furthermore, it will lower the risk that any businessman or woman will take on regard to a financial decision. During the financial planning process, critical infinities should be clearly determined to ensure their achievement within a specific time frame.
Having a solid plan with clear goals would allow a person to know how much money they need to invest in a venture to sustain good growth. Lack of this knowledge might lead to fortuitous spending of money and time, definitely heightening the risking failure. Therefore, an appropriate plan and smart goals can provide an actual picture of the amount of capital needed to implement financial decisions, thus lowering the risk of unseen events.
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