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Financial Planning for Small Businesses

Writer's picture: Joel BonnahJoel Bonnah

Financial planning is essential for your business to grow and succeed. By having a plan you will be able to hit all your goals by being organised and maximising efficiency with finances.


Why is financial planning important?

Financial planning allows you to analyse your business’s  finances and make smart  decisions based on your current position to reach your goals and objectives. 


By doing this your able to know your current financial position as a business, have enough finances and resources to achieve these goals, and be prepared for unexpected bills and situations.


How to make a financial plan. 

  1. Setting up your goals before hand allow you to make your plan based on said goals. This could be anything from profit targets, expanding the business size, upgrading and maximizing efficiency of certain parts of the business. 

  2. Recognise your current financial position. You can do this by having a cash flow statement and analysing this data. (see the cash flow blog post for more information on this)

  3. Setting up a budget helps you allocate money where it is needed and when using the information from your cash flow statement you can make a forecast to project future cash flow.

  4. Now setting up preventative measures for potential risks is important, e.g. making a cash reserve, insurance, multiple income sources.

  5. Use accounting software’s  to help with these steps as well forecasting and budgeting tools. Having spreadsheets greatly improve the usefulness of things like budgets and cash flow.


What can you do with financial planning?

With a financial plan you not only keep your business stable but also helps drive your business towards success. With this plan you can look for new opportunities like:

  • Investments 

  • Potential for expansion

  • Growing your team with 

In addition, you will have an easier time with decision making as you can keep tabs on your position financially. To conclude, this financial plan is the key part in your business to achieve your goals.


If you need any advice about starting your business or want to ask about any other topics, our virtual assistants are here to help.



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