Business Financial Plan - The Best Way To Create Profit in Your Business
I often say a goal without a plan is just a wish. Now think of your business goals and what you want to achieve in your business. Do you have a solid business financial plan to back that up? If you don’t have a business financial plan that outlines how you plan on meeting your targets, then you are leaving money on the table.
I am passionate about supporting business owners to build wealth for themselves through their businesses. Your business can be the largest financial asset you own, but knowing how to manage the finances in your business will create wealth. It isn’t how much money you make that makes you wealthy, it’s how you manage that money that makes you rich.
When you have established a good business financial plan, you will have high net profit margins that increase your business's profit (net income). When you know the business numbers, you understand which offers you have in your business that generate the most profit and what you should be selling.
Good money management skills are key to building profit in your business, and the profit is what you get to keep (after taxes). Increasing the profit in your business will help you increase your personal net worth.
Check out Rich, But Not Born That Way
What is a business financial plan?
A business financial plan maps out where you are currently in your business to where you want your business to go for the next 12 months. It is based on the income statement and summarizes what you want to achieve each month.
You then monitor your results against that business financial plan each month to track if you are on target to meet your financial goals. If you are not meeting them, it allows you to course correct. Getting that monthly feedback is valuable so you can plug money leaks and find new strategies to meet your monthly goals.
Business financial plans make good business sense when growing and expanding your business. You need to have growth mapped out carefully to ensure your cash supply can keep up with business growth. You also want to ensure you meet your growth targets each month.
It’s one thing to want to grow your business, it’s a smarter choice to have a plan for that growth.
It is great to have a good business financial plan established; however, if you are not monitoring your results against what you planned for each month, the effort of having a business financial plan will be fruitless.
Who should build a business financial plan?
All business owners, whether you have a small or large business, should have a business financial plan. Business financial plans offer opportunities to manage your net profit margins and sell your most profitable offers.
If you have any goals for your business, you will need a business financial plan. The plan helps you map out the way you will achieve your goals. It’s a roadmap to business financial success.
Financial planning for business owners
When thinking about financial planning, you would often think it’s just about your personal finances. Still, I would argue that financial planning for business owners is about what you want to achieve inside your business.
As your business will likely be your largest financial asset if you manage it well, then logically, that would include financial planning for your business.
A business financial plan focuses on the revenue-generating activities in your business and the expenses that go along with creating that revenue. It monitors your net profit margin to ensure that you are consistent with the competition. And it’s through monitoring the business's financial performance that you will reach your financial goals.
How to make a financial plan for a business
Knowing how to make a financial plan for a business is vital information for every business owner. Serious business owners know their numbers and monitor their progress against their goals.
If you want to learn how to create a financial plan for your business, check out my Cash Clarity Course.
How the Cash Confident Framework™️ helps you with your business finances
Creating the business financial plan is step three of my signature Cash Confident Framework™️ that I created to help business owners understand what they need to monitor to stay on top of their finances.
You can download your free 5-Step Roadmap to a Profitable Biz and better understand what you need to know as a business owner to monitor your finances.
