The new year is fast approaching and it’s time to make sure you are setting your business up for success! Creating a solid financial plan is the only way to make sure your business is achieving your goals. You have to be able to anticipate both your income and expenditures so you can forecast properly and take advantage of any opportunity to reinvest into the growth of your business.
When it comes to financial planning, there is no better time to start, than the present. 2020 is fast approaching, and you want to be able to grab the bull by the horns. So what if you are new at this? If you have never created a financial plan for your business, we are here to help you because, well, that’s our business! Here are 8 of our favorite steps to creating a financial plan.
- Marketing Costs
Convert marketing strategies into expenditures. Strategies depict the course of action you want to take. A strategy might be to advertise in local newspapers or sponsor charity events to increase customer awareness. Do a cost estimate for each strategy.
- Revenue Flow
Create a revenue model. Determine the assumptions you want to use for key variables such as unit sales, number of customers, and prices for your products or services. Calculate month-by-month revenue projections using the assumptions. Build formulas into the spreadsheet that allow you to change the variables, doing “what-if scenarios” until the revenue forecast reflects what you believe is realistically attainable.
- Goods Sold
Forecast costs of goods sold. Use your historical cost of goods sold percentage as a guide and modify it based on any changes you anticipate in the cost of materials, finished goods, or production costs.
- Administrative Expense
Forecast general and administrative expense. Project your expected facilities costs, such as rent, utilities, insurance, or recurring legal expenses. Again use prior year numbers as guide but make sure you allow for increases that typically occur.
- Personnel Expense
Prepare a personnel expense forecast. Include additions to personnel that will be needed to carry out the strategies you devised for the upcoming year. A strategy of improving response time to customer inquiries could require adding customer service personnel, which would raise the amount forecast.
- Business Upgrades
Forecast business upgrades. Be sure to estimate the costs of any improvements you want to make to the business. Investing in your business upgrades – anything from equipment purchases to facilities expansion to extra marketing costs – is the only way to grow. We are available to help your business get the funding you need to invest in your upgrades, so don’t hesitate to call!
- Review the Plan
Review and finalize the financial plan. Look at the month-by-month projected results. If cash balances appear low for certain months, shift discretionary expenditures like advertising out of those months and into months where revenues are higher.
- Extra Holiday Budgets
With all the preparation, you have to factor in the budget. Why? Because you have to spend money to make money, and the Holiday Season is all about utilizing the increase to your best interest. Marketing pushes, extra inventory, extra staffing, emergency funding – it’s all part of an effective Holiday strategy. Apply with us today to see what type of cushion we can provide for the holidays!
Preparing the financial plan gives you the opportunity to review all expenditures you made last year and determine if there are any potential savings that could be achieved through greater operational efficiency or switching to lower cost suppliers.
Be sure to review actual financial results each month against the numbers in the forecast. This analysis will give you vital information about changes you could consider making such as cutting costs if revenues are substantially below forecast.
Looking to Start a Business?
With the opportunities for small businesses booming, why wait another moment. What else is keeping you down? Financial restraints have been a complaint for many of the dreamers, limiting themselves to their immediate funds. There is an alternative. If you have the dreams and decent credit, Small Business Loans and No Doc Loans are available to you. Our goal is to provide you with the knowledge you need and the resources available to make your dream a reality. Give us a call – we have the education and the perspective to help you obtain the loans you need for your small business. Visit our website or give us a call to find out what financial backing is available to make your business soar!
Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.
Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584