Importance of a business financial plan

We are often approached by small businesses and business owners seeking to understand the most important elements in attaining an effective financial strategy. As a general starting place, regardless of the income a business generates, the ages of the owners, or how many employees it has, a business financial plan is essential in navigating the future and unexpected events. A financial plan is a road map of what the business is trying to achieve in the short and long term.

FACETS OF A BUSINESS FINANCIAL PLAN:

A long-term strategy.

A clear and concise strategy, along with the formation of well-defined goals, is necessary for the financial health and wellbeing of any business.

Compensation planning for staff and key employees as well as determining the appropriate retirement plan for the organization. Competitive compensation and retirement planning is an effective tool in maintaining a productive staff and retaining the key personnel that position your business a step ahead of the rest.

Budgets and cash flow management.

Efficient and appropriate budgeting and cash flow management is paramount to the financial success of a business. A proper business financial plan clearly defines the boundaries to help you develop the optimal budget.

Appropriate time for mergers, acquisitions, or a sale. Transitionary periods in a business are inevitable. Whether it is expansion or you are selling, proper planning can illuminate the path set before you.

Team of legal, accounting and financial planning professionals.

This is essential to navigate and design the most appropriate course of action for determining business type, continuity and succession planning, and growth strategies. Being surrounded by the right people matters.