What is a financial strategy? Types and examples explained.

A financial strategy in business is a long-term plan for how a company manages its money. Financial strategy covers how the business raises funds, where that money is invested, and how any risks are handled along the way.

A good financial strategy brings together everyday money management, smart spending, saving, and planning ahead to help the business grow and stay secure over time.

In this article, we’ll take a look at why having a strategy matters, some different types to be aware of, and practical steps you can take to build one that works for your business.

• What is a financial strategy?
• Why do I need to have a financial strategy?
• 6 types of financial strategies
• How AI is transforming financial strategy
• 5 steps towards building a winning financial strategy
• Common financial strategy mistakes to avoid
• Advanced financial strategies to try (once you nail the basics)
• Next steps

A financial strategy is the long-term plan that guides how your business is going to raise capital, where you’ll use it, and how you’ll manage your money long term to reach your bigger goals. It is a bigger picture than your day-to-day budgeting or short-term planning, although your smaller choices will be shaped by your larger financial strategy.

Business financial strategy looks very different from managing your personal finances. It is usually collaborative and subject to greater scrutiny. While managing your own money affects your life alone, managing it for a company means taking responsibility for employees, customers, and shareholders.

However, just like your personal finances, there are different levels of what’s on the line.

Financial strategies also look very different depending on how long you’ve been in business. For example, a new start-up might focus on securing investors and managing cash flow, while a more established company might prioritise expansion, acquisition or increasing the value of its shares.

Financial strategy matters because it’s the backbone of your business. You will already know that if you fail to plan how you're going to manage your money, you’re at risk of overspending.

In business, the unexpected does happen. Inflation, interest rates, and global events are outside your control, but they can quickly impact your bottom line. If you don’t have a plan in place, you’re likely to get caught short.

The risks of not preparing ahead are clear in survival rates. Only half of new Australian businesses make it past the three-year mark . Many of these businesses fail because they do not plan beyond immediate cash flow.

For companies with investors, the responsibility is even greater. In Australia, directors and company officers have a legal duty under the Corporations Act 2001 to act in the best interests of the company and to exercise care and diligence. Failing to have a sound financial strategy could be considered not acting in the best interests of the company.

With that said, if you don’t have a financial strategy, now is the best time to start planning for how you’ll adapt to change, manage risks, and align your spending with your business's long-term goals

Every business needs a clear approach to managing money. While priorities shift depending on size, industry, and goals, most financial strategies fall into the following six categories.

Every business needs a plan for how it invests its capital. The goal is to put money where it will create the most value, whether that is launching a new product, entering a different market, or upgrading systems to stay competitive.

A common approach is capital budgeting, which simply means weighing up the potential return of a project before you start committing funds to it. Businesses may use tools like net present value (NPV) or payback period to judge whether the investment is worth it.

Another approach is capital rationing, which is when leaders prioritise only the projects that deliver the strongest returns, rather than spreading resources thin.

Cashflow strategies are about making sure money is coming in on time and going out in a controlled way. That means keeping track of what you owe, what you are owed, and how much cash you have available. The aim is typically to keep enough cash on hand to pay bills, cover wages, and allow room to grow.

One way to do this is through revenue forecasting. This is the practice of looking ahead and predicting how much money will come in and go out over a set period. Keeping track of what you’re planning in sales and expenses helps you spot potential shortfalls early, plan for big expenses, and make better decisions about when to invest or save.

Once you’ve done this for a few quarters, you’ll also get better at predicting and be able to spot and account for patterns like seasonal changes.

Every business faces risks, from changing market conditions to supply chain issues; many of these you can’t predict or prevent. Risk management strategies are about spotting these risks as early as possible and putting in place steps to reduce their impact.

This can include investing in insurance to protect against losses, diversification so you are not dependent on one product or market, and financial tools to manage things like currency changes.

Scenario planning is another method, where you test out ‘what if’ situations to consider how your business could respond. For example, what would happen if you had a month without profit?

Once your business is making a profit, you’ll need to decide what to do with it. Some companies pay dividends to shareholders as a return on their investment. Others reinvest profits back into the business to fund things like research, hiring, or entering new markets.

The right approach depends on the company’s stage and goals. A mature business might choose steady dividend payments to keep investors happy, while a fast-growing start-up often reinvests its earnings to fuel expansion.

Both strategies work as long as they are aligned with long-term objectives and supported by strong cash flow.

Operational and growth strategies cover budgeting and forecasting, cost control, and revenue growth through pricing, sales, or entering new markets.

The aim is to balance efficiency with expansion. For example, a mid-sized company might cut costs by streamlining processes, while also investing in marketing to grow its customer base. An enterprise might focus on global expansion, using forecasting tools to guide where it will make its investment.

This is also where technology plays a major role. Platforms like Salesforce help businesses forecast demand, automate reporting, and use AI insights to identify the best opportunities for growth. These features give leaders the data they need to feel confident when making larger financial decisions.

Managing tax and compliance is a core part of financial strategy, especially for businesses working across different states or countries. It is often one of the more complex areas, which is why businesses need clear strategies to stay compliant with regulations, minimise tax liabilities legally, and plan ahead for changing rules.

For example, a company might use tax planning to time investments so it can maximise deductions, or choose the right structure for international operations. Strong compliance strategies not only reduce costs but also help avoid penalties, protect reputation, and build investor confidence.

AI can be an asset for financial planning because it can produce faster forecasts, analyse your data faster, and produce recommendations based on it. Here are three key ways AI can support your financial strategy.

• Forecasting and predictive modelling: AI can work off your real-time data and spot trends earlier, and provide you with more accurate forecasts.
• Automating repetitive tasks: Free up finance teams for more strategic thinking by removing manual reporting and admin.
• Personalised recommendations: AI can outline the next best actions your business should take, from cutting costs to prioritising growth opportunities.

Many businesses are already turning to AI to help get better financial insights. In 2024, a Bank of England survey found that 75% of UK financial firms are using AI, with another 10% planning to within three years. This shows just how quickly AI is becoming part of everyday business practice.

Salesforce is the leading CRM provider with AI built in, helping businesses put advanced AI to work.

A good example of its use in practice can be seen from Australia Post, which used Salesforce CRM Analytics to bring all its customer data into one view. With AI-driven insights, the team was then alerted to bottlenecks early, allowing them to adapt quickly.

The result was a 27-day reduction in onboarding time, with self-onboarding adoption rising from 0% to 50%.

A financial strategy takes time, effort, and a clear understanding of your business. While it might take a while to put together, it is non-negotiable for any company that wants to achieve long-term success. Here are some steps to help you get started.

The first step is to be clear on what success looks like for your business. Do you want growth, stability, or are you preparing for an exit? All of these will require a different approach, so setting well-defined goals ensures that every financial decision you make supports your wider plan.

Before you dive into building a plan, you need to understand where your business stands today. Review all your assets, liabilities, revenue, and expenses to put together a baseline. Using tools such as Salesforce CRM Analytics can help you turn this review into data that will give you a more accurate picture of risks and opportunities.

There isn’t one strategy that works for every business. You need to choose the mix that makes sense for your goals. If cash flow is tight, you might want to focus on managing expenses and building up some profit you can reinvest.

If growth is the priority, you might want to look at investments you can make, or expanding into new markets. The right blend will keep your financial strategy in line with where you want your business to go.

Once you know what your financial priorities are, you’ll need the right tools to put your plan into action. Platforms like Financial Services Cloud and Agentforce can help you automate tasks, streamline reporting, and give you more time to focus on strategy instead of admin.

Your strategy isn’t a one-off exercise. Markets will change, costs will rise, and buyer needs will shift. Regular reviews help you adapt before problems escalate. Using AI forecasting with access to real-time insights is a great way to stay ahead and make sure you adjust in time.

When it comes to financial strategy, it can be tempting to make decisions in the moment. Here are some of the mistakes business leaders often fall into and why they might not set your business up for long-term success.

Planning is about tasks and timelines, while strategy is about direction and choices. When you treat them as the same thing, you end up busy planning individual tasks and bills, rather than moving your business forward.

As the old saying goes, you’ve got to spend money to make money. Focusing only on reducing costs can strip away the resources you need for growth, innovation, and long-term stability. It leaves you lean but unprepared for future growth.

Every business faces surprises, such as new regulations, economic shifts, or market downturns. Without building resilience into your strategy, these changes hit harder and take longer to recover from.

If you don’t track results, you can’t see what’s working or what needs to change. That means decisions are made on gut feel, and resources are wasted on the wrong priorities.

Using the same accounts for both makes it hard to track performance, manage taxes, or make clear financial decisions.

Forecasts that are too positive give you a false sense of security. They can cause you to overcommit resources or mislead investors, which quickly damages trust. When you use a platform with built-in AI, you’re more likely to base forecasts on real data and trends, giving you a clearer picture of what’s ahead and reducing the risk of overpromising.

Repeating what worked in the past can hold you back. Markets change, and strategies need to change with them. Sticking to old playbooks can leave you vulnerable to new risks.

Once the basics are in place, many businesses move into more advanced strategies to manage complex financial situations. Here are some ‘next-level’ financial planning techniques that go past simple budgeting.

For businesses, diversification means expanding into new product lines, markets, or asset classes that reduce reliance on one revenue stream.

Some companies invest in infrastructure projects, while others explore venture partnerships to open up new opportunities for income. Salesforce Data Cloud helps leaders bring all of this data together to see every revenue stream in one place and get a complete view of the business.

Dynamic allocation is about moving your resources to where they’ll have the biggest impact as conditions change. For a business, that could mean putting more capital into a fast-growing market while scaling back in an area that’s slowing down. The aim is to adjust gradually and with discipline, using data to guide decisions rather than chasing short-term wins.

At an advanced level, risk management is about more than insurance or spreading investments. Businesses might use tools like hedging to protect against currency swings or commodity price changes.

Others run regular stress tests to see how their finances would hold up in different economic scenarios. For example, an international company might hedge against foreign exchange movements to protect its global revenue. These techniques are all about balancing risk.

Advanced tax strategies for businesses focus on reducing liabilities while staying compliant. This can include timing investments to maximise deductions or using tax credits.

Larger enterprises also plan ahead for changing regulations so they can adapt quickly without disrupting operations. The goal isn’t only to cut costs in the short term, but to create a tax strategy that supports the business's growth while still paying your fair share.