Financial planning is an essential part of good business management. In fact, a detailed financial plan is a foundational element of every business. Your written business plan should include your financial plan.
During this continued challenging time for businesses, don’t avoid looking at the hard realities of your business’s financial state. Now more than ever, you need to understand your budget and how to manage going forward.
How to Create a Solid Financial Plan
Determine Where You Are Today
Start by evaluating where you are today. Understand your current cash flow, debt, and expenses. A realistic view of your business’s finances empowers you to make smart decisions and move forward.
Set Goals for Your Business
Once you know where you are, decide where you want to go. Create goals and identify the best strategies to help you reach those goals. If your goal is to sell your business and retire in five years, your strategy should reflect that goal. Likewise, if you want to expand your business from serving only the Denver area to all of Colorado, your strategies will differ.
No matter your goals, you need a realistic budget. Your budget should reflect total expenses, including employee costs, rent, insurance, taxes, and more. A detailed budget accounts for all costs, both large and small.
We know it’s hard, but decide where you need to make cuts to survive. If a certain product line or service isn’t producing results, you may need to adjust. Also, if you need to downsize your physical location or cut back employee hours, be honest with yourself. Channel your budget to produce the best results for the longevity of the business.
Look for ways to grow your business’s revenue. This may require creative solutions. For example, how can you address your client’s or customer’s current needs? If the pandemic changed needs, you need to adjust to meet those needs and increase your revenue potential.
Seek a Business Valuation
A business valuation is an unbiased look at your business’s financials. You gain a deeper understanding of the true value of your business. A valuation lets you know what you could likely sell your business for. As you look at how to move forward after a challenging year, a business valuation gives a clear picture. Knowledge is power. Knowing your worth sets you up to make wise financial decisions for your business and your future.
Find the Support You Need
You don’t have to figure out how to solve your business’s challenges alone. At Alliance Business Coaching, we support business owners as a guiding hand. We offer business valuations to give you an accurate view of your business’s financial state.
Yet, we do more than that. Our highly-skilled professional business coaches offer a wide range of programs to support businesses. We offer business coaching and leadership coaching to empower you with the tools to run and lead your business better.
Contact us today to schedule a consultation and learn more about how Alliance Business Coaching can help you.