Having a great business plan is absolutely, positively the single most important thing you can do to ensure the success of your business. It is generally more important than raising all the money that you could ever need or even hiring the very best employees that you could possibly find. It is usually more important than having the first product to market or having the lowest cost structure.
Email this Article Print This Article A financial business plan is essential to help your small business. These important documents are put together to help your business plan for the future. This part of your business plan might look like accounting but a financial business plan is designed to look forward.
Need a loan for your small business? See if you qualify in 60 seconds or less. Although they include profit and loss statements, a balance sheet and cash flow statements, you might jump back and forth when you first start putting one of these together.
For example, when you put together a cash flow, the numbers might tell you that you need to go back and rejigger your estimates for expenses and sales. Sales Forecast Using a spreadsheet is the best way to put together a sales forecast.
For the first year, you want to set up columns for sales monthly. Afterwards, you can go to a quarterly basis for years number two and three. Expenses Budget Putting together and expenses budget will help to balance out your sales forecast.
This will have a variety of different categories including leased equipment and utility payments. Cash Flow Statement When you put the sales forecast and the expenses budget together, you get a cash flow statement.
This is one of the underpinnings of any financial business plan. The cash flow statement is important to show you where you need to tweak your business model — what you can keep and what needs to be discarded. Robert Riordan is a CPA. He also emailed some comments to Small Business Trends on the importance of putting a financial business plan together.
Know what a budget is and follow it.
Learn how to apply financial ratios to see where your business is going. Try to look at your financial statements every month to see where you are at. Its great information to help you succeed in Business. The idea here is to round up the numbers that you put together in the previous categories.
In a nutshell, this is the money that you think your company will make in one year. This is another way that you can cover all the different bases and take educated guesses at your money situation looking forward. These are all educated and researched guesses about what your money situations going to look like for your small business.Less than half (47%) of the UK’s small businesses have a formal business plan in place that is written down or recorded, while the remaining 25% have an informal, verbal plan.
Furthermore, only one in two (49%) UK small businesses have a succession plan in place. Business continuity statistics: where myth meets fact 80 percent of the affected companies that lacked a business continuity plan failed (FEMA).
The American Red Cross estimates that as many as 40 percent of small businesses that experience a disaster never reopen. Sep 12, · It still amazes me how many business owners who actually have good ideas with the ability to execute them -- crash and burn because of their own dysfunction.
Please don’t be one of them. A financial business plan is essential to help your small business. These important documents are put together to help your business plan for the future. Make no mistake. This part of your business plan might look like accounting but a financial business plan is designed to look forward.
While more than a third (38 percent) of small business owners say it is not important for their business to have a disaster recovery plan, over two-thirds (69 percent) have an evacuation plan at home. If you don’t have a business plan any result you achieve (even a poor one) is good since you don’t have a plan to compare it to.
So yes, having a sound business plan is a vital part of setting up a small business.