Every’ good plan should include financial controls during implementation. Financial control is a system developed to allow the business to control and monitor the acquisition, allocation and utilization of the financial resources to ensure they are done in accordance with the plan.

Factors to be considered while preparing a suitable capital plan: 

(i) Objective: All capital plans should be designed to achieve the financial objectives of a company. The basic financial objective is the procurement of funds at the lowest cost.

(ii) Size of the firm: Capital plan must take into account the size of the firm. A large enterprise aiming at steady growth will need more funds. Post record and credit standing of the firm reputation and attitudes of management and the degree of the risk the firm is willing to assume also influence capital planning.

(iii) Market Conditions: Capital plan depends on the cost of alternative sources of finance and attitudes of financial institutions and banks. Availability of alternative sources of funds and their merits and demerits affects the choice of the type of securities to be issued.

(iv) Degree of risk: Degree of risk is another important factor while formulating a capital plan for an enterprise. The degree of risk which an enterprise is willing to assume influences capital planning. If an enterprise raises funds by issuing shares, there is a risk because it is not necessary to pay a dividend if profits are inadequate. However, too much dependence on shares may dilute control of the company.