Its almost the end of the year. Seriously, we have less than four weeks until 2019 arrives. That means that it’s time to take a serious look at your financial business plan for the next year. Are you ready yet?
Your plan does not have to be overly formal. No one expects you to have the top-of-the-line infographics, the fanciest presentation or the best formatting. You just need something that makes sense to you. Spreadsheets, Word documents, and a good old-fashioned PowerPoint works great!
3 Financial Business Plan Sections You Need
Saying you need a financial business plan is one thing, but what do you need to have in it? While your business’ financial plan can be as complex as you want it, here are three sections you are going to want to make sure you include:
In your financial business plan, your sales forecast is just what it sounds like: what you project you will make in sales. A sales forecast typically goes about three years into the future. But if this is your first financial business plan, keep it simple and do the single year. There’s no need to get overwhelmed!
It’s going to cost money to make those sales that you’ve projected, and your expense budget is where you outline those. If you sell physical products, this is where you’ll put the actual supplies you’ll need to make those products. But if you provide a service, you’ll likely be looking at software and equipment for your expenses.
For example, I am a writer, so my expense budget includes the cost of my materials to get the job done. Perhaps I need to purchase a new Associated Press Style Guide or a stack of pens and paper pads. I also have a number of marketing clients, so my expense budget also includes the fees for programs like Adobe Photoshop and InDesign.
Cash Flow Statement
Your cash flow statement for your financial business plan is the combination of your sales forecast and your expense budget. It shows the money moving in and out of your business. It’s important to be realistic when it comes to your cash flow. For example, if you send out invoices, chances are not every one of those will be paid in the first 30 days so it doesn’t help to calculate it like they will.
Your Financial Business Plan
Your financial business plan is not a one-time document that you prepare for January 1, and don’t look at again until December 1 of the next year. It should be a moving document that changes as your business does. Something that you’re constantly check in with to make sure you’re hitting the goals you want to hit and adjusting when you need to.
Even if you only use an elementary financial business plan this year – something uncomplicated that isn’t 40-pages long, it’s okay! Use what works best for you and your business. We’re all just learning, your job is just to do what you can! If investing is in your financial plan for 2019, check out Swell to learn more.
Do you have financial business plan tips? Share them in the comments below!
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