Before you can have your own business, it’s a requirement for you to do a strategic planning. Having a strategy will help you attain your business goals. Furthermore, creating a marketing plan and financial plan will completely assist you in having a detailed overview of your plan. Writing a financial plan needs thorough research and planning, but this shouldn’t discourage you. When you’re able to create your own financial plan, it will be easier for you to foresee the possible rate of success and probable challenges you may meet along the process of achieving your business goals.
What Is a Financial Plan?
A financial plan is one of the elements in a business plan. It contains the financial aspect needed to attain the business goal. It’s important to take note that a business plan won’t translate into a realistic business establishment without ample finances. This is the reason why a financial plan is one of the primary components in a business plan. A separate plan for the financial aspect should really be prioritized.
What to Include in a Financial Business Plan
- Financial plan templates. A template is helpful in making a financial plan organized and detailed. Other formats are available such as plan templates in Excel and plan templates in word.
- Balance Sheet. The financial status of the business is presented through a balance sheet. It includes the assets, liabilities, and equity accounts.
- Profit and Loss Statement. This statement explains the business’ profit/revenue and loss/expenses.
- Cash Budget. The cash budget is your way to know the expected total of profit and loss in your business. You need to monitor the different aspect of your finances such as cash receipts, credit receipts, and sales forecast.
- Personnel Plan. The management, specifically your employees, should have proper compensations and benefits. Also, you need to identify the kinds of employees you will hire and the tasks they should accomplish.
Why Is It Important to Do Financial Planning for Business?
A financial planning is important for a business because it helps you manage your capital and eventually the income you’re going to incur, by the time your business flourishes. Moreover, you will be secured, financially. In case an emergency occurs, you are already prepared because you have a backup plan. Investments and other financial methods can readily assist you in gaining more profit.
Tips for Writing a Business Financial Plan
- Business plan template. A business financial template will give your plan an orderly and systematic contents. Available sample plan templates format includes plan template in PDF.
- Identify your business goal. What do you want to achieve for your business? Contemplate on this inquiry.
- Current financial status. Identify your current financial status. Is your money enough to support your business endeavors? You must prepare well.
- List down assets and liabilities. These are the things and services you need to render and incur for your business.
- Make a budget. It’s essential to budget your capital. Think thoroughly every transaction you make.
- Calculate profit and expenses. It’s a good practice to calculate ahead your probable profit and expenses.
- Review your plan. Don’t forget to review your financial plan to avoid committing any mistakes.