A preconceived notion that most entrepreneurs fall prey to is that in order to resort to powerful and beneficial financial planning, one will have to seek assistance from a professional. Evidently, hiring a financial advisor would imply that he will also have to be paid at the end of every month and this is what persuades the businessmen to drop their plan of delineating a budget and let things be as they are. However, in this article, we will be busting this myth for you. Far from consulting a business specialist, you can chalk out the business plans all by yourself using tools, some of which are even available for free.
Thereby, the answer to do you need a financial advisor as a small business owner would be no. Also, let’s not forget the fact that nobody is as familiar with the intricate notches of the business as you, and this perspective can be capitalized on for fruitful financial planning. It is you who have been the closest witness of its past success and failures and are now sticking out hopes for the future. If you are baffled about where to start and how to go about it, here are some ideas.
Reassess your strategic plan
First things first, to build a solid business plan you will have to be certain that your strategic policy is in its place. Ask yourself a series of questions like:
- Is there enough cash flow?
- Do I need to expand my business and resultantly hire more staff?
- Should I invest in more efficient equipment to boost production/supply?
- Do I need financing? If yes, for which areas exactly and how much?
When you have an answer for all of these queries, note them down and outline a realistic estimate for all of them and how the amount is going to affect the next 12 months (6 months) of your business expenditures.
Compare them with the past records
Because all these expenses will be borne by none other than the funds of your business themselves, pull out as many records as you can and compare your targets with them. Use tables, spreadsheets, and means of calculation to form neat registers that will weigh your company’s performance so far and furnish you with a clear insight into how much you can risk spending, even if it is for the welfare of the business year. For instance, if you gather that the average profit from the last five years is not as much as the sums that you are looking forward to financing this year then don’t succumb to the risk. Either spread out your plots to be attended over the next few years, or cut on the extras that you can possibly do without at the moment.
Consider the unforeseen emergencies
While carrying out the business planning do not forget to take the unforeseen emergencies that can hit your business into account regardless of how distant or erratic they are. Market analysts always recommend small business owners have an emergency fund ready which they can fall back on during a contingency. The prospects include having room for enough line of credit or saving cash for the odds.
Lastly, like all other businessmen, you too must have a number of expectations from your company. Therefore, all you will have to do is examine whether or not these targets are being fulfilled in reality, and if not, what are the feasible adjustments that you can implement to make ends meet.