A financial plan is not just a document with numbers. It is your compass that shows how to develop your business, achieve goals and avoid financial risks. Without a plan, a company seems to be moving in a fog, where it is difficult to predict what lies ahead. But how to make a financial plan that will become your reliable assistant? In this article, we will tell you in detail why it is needed, how to develop it and what to do to make the plan work.
A financial plan helps a business:
Determine goals and ways to achieve them. For example, expand a store, increase market share or launch a new product line.
Calculate resources. This will help you understand how much money is needed to achieve goals.
Predict risks. Planning helps you prepare for potential difficulties.
Control expenses. You will know where the money is spent and will be able to manage it effectively.
Example: A design bureau wants to open a second studio in a new area. Without a financial plan, business owners may underestimate expenses for rent, equipment, and advertising. With a financial plan, they can see the whole picture and prepare in advance.
The level of detail in a financial plan depends on the size of the business and its goals. The right level of detail helps you get a clear picture of current tasks and allocate resources effectively. Let's look at why you should include each of the key points in your plan, and what will happen if you ignore them.
Why include:
A sales forecast helps you understand how much revenue is expected and when exactly. It is the basis for planning expenses, paying bills, and settling accounts with suppliers.
What happens if you forget:
Without a sales forecast, a business can face cash flow gaps - for example, when expenses exceed revenue in "empty" months. You may underestimate seasonal fluctuations and not prepare for a drop in demand, which will lead to losses.
Example: An accessories store without a sales forecast may buy too much product for the summer, not taking into account that the peak of purchases occurs during the holiday months. The result is surplus stock and frozen funds.
Why include:
Basic expenses are mandatory payments without which the business will not be able to function. Calculating them helps to prepare a budget in advance and avoid unexpected difficulties.
What happens if you forget:
If you do not take into account basic expenses, a situation may arise when there is not enough money for rent or salaries of employees. This leads to a loss of trust within the team, a decrease in motivation and, ultimately, to reputational and financial losses.
Example:
A creative studio did not take into account the increase in the rent rate next year. Without this data in the plan, the team was faced with the need to urgently look for additional funds or move.
Why include:
Marketing is the engine of sales. Investments in promotion allow you to attract new customers and retain old ones, increasing revenue and market share.
What happens if you forget:
Without a clear marketing budget, you can underestimate the importance of advertising, which will lead to reduced brand visibility and a decrease in customer influx. Or, conversely, you can spend too much on ineffective channels.
Example:
An event agency did not include the costs of promoting a new service in the plan, and the launch went without the proper response, since clients simply did not know about it.
Why include it:
A reserve fund protects a business from unexpected situations: rising prices for materials, force majeure, or a temporary decline in sales.
What happens if you forget:
Without a financial "cushion", a company becomes vulnerable to any crisis. Even small problems can develop into serious financial difficulties.
Example:
A clothing store did not set aside a reserve fund and faced losses due to delayed deliveries. As a result, it had to take out a loan at a high interest rate, which increased costs.
Each of these points is an important part of a financial plan that helps a business operate stably, predictably, and efficiently. Miscalculations at a large level can lead to losses in the millions. The more detailed the details, the easier it is to manage finances and avoid unexpected problems. With Planka experts, you will receive not only a professionally drawn up plan, but also the confidence that all important aspects of the business are taken into account.
1. Define your business goals
A financial plan starts with understanding what you want to achieve. Goals should be:
Specific. For example, increase revenue by 20% or open two new stores.
Measurable. Provide exact numbers and deadlines.
Realistic. Goals should be achievable within your budget and capabilities.
2. Analyze the current state of the business
Before planning, you need to understand where you are now:
Analyze revenue and profit for past periods.
Evaluate the cost structure.
See which projects or products bring in the most profit.
3. Forecast revenue
Forecast sales and revenue. To do this:
Analyze historical data.
Consider seasonal fluctuations.
Include the impact of new initiatives: launching a new product, opening a store, expanding advertising.
4. Calculate expenses
Divide all expenses into categories:
Fixed: rent, salaries, utilities.
Variable: costs of materials, logistics, advertising.
Investment: purchase of equipment, opening of new outlets.
5. Create a budget
Make a budget that includes:
Income and expenses.
Investments.
Reserve fund for unforeseen situations.
6. Make an action plan
A financial plan should include not only numbers, but also specific steps:
What needs to be done?
Who is responsible for this?
What resources are required?
Realistic forecasts are your confidence in the future. They help to avoid financial risks, wisely allocate resources and understand exactly how to achieve business goals. Planka experts will help you not only collect data, but also professionally analyze it so that your financial plan is accurate, sustainable and aimed at success.
Checking the plan is a mandatory stage of financial management. Without control, your plan turns into a beautiful table that does not bring any real benefit. It is necessary to check the plan throughout the year, and not just once at the end, as this allows you to quickly identify deviations and take action. Constant monitoring helps not only to monitor how the business is performing tasks, but also to adapt to changing conditions.
Why is this important: Comparing the plan and the fact at the early stages allows you to avoid the accumulation of problems that can become critical.
Regular checks help you understand exactly which initiatives are working and which require revision.
This saves resources: it is easier and cheaper to fix a small deviation than to eliminate a large-scale failure.