Running a business without a Financial Business Plan is like flying an airplane without instrumentation
Why a Business Plan is a must for your business:
A well thought out financial plan does many things for you and your business, but most of all it allows you to have a flight plan with goals and milestones with which to guide you toward your desired results. The reason is simple; you will have participated in defining what specific attributes your plan entails. Whether that is the number of sales people, product pricing, market penetration or any one of many factors that drive your revenues and costs – the fact that you have defined what goes into creating a monthly, 1 year, 2 year 3 year or more financial plan, means that you will fully understand what drives your business and more specifically what is needed to successfully attain your goals.
As a B2B CFO® expert in business planning I will work with you to define your drivers and your goals and turn them into a fully documented financial business plan at a low cost to you. I will further aid you in developing and writing up the other aspects important to a full blown business plan – the other non-financial sections of a professionally developed plan; A Sales Plan, Marketing Plan, Products & Services, Competition, Company Profile and an Executive Summary, all wrapped around a 3 or 5 year financial plan, monthly, in the form of income statements, balance sheets and cash flow statements which are easy for you to understand and act upon (since they were created from your input).
There is perhaps nothing more powerful in your arsenal of tools than to see specific financial results, in terms of revenues, costs, net income and cash flow, that were created by yourself. To have clear and understandable assumptions and results at every step of the way. You will find that you have clarified and simplified the process of growing your business and reaching your desired financial goals.
A well-crafted business plan also serves as an early warning system, showing you if there is actually a shortfall that results from your current course of business, and what you need to change or adjust to fill that shortfall. It may also show the opposite – a situation where you can foresee investing projected profits into your business process to gain greater returns. Either way, to know exactly what will drive your results is by far the best road map, flight plan, you can have. Imagine starting off on a trip not knowing where you’ll end up or if you even have enough gas and power to get there. Why fly that way?
There are other key uses for a well thought out financial plan. Once completed it will serve as a budget for your company as well as serve as the underlying template for cash flow planning and reporting. You can easily turn your monthly financial plan into an interactive cash flow report showing you what you can expect along the way as you exceed or fall short of various assumptions that you have defined to drive your business. This interactive cash flow will show you, based on your “what if” inputs, what your cash flow will be next week, next month or any distance down the road. It is an instant update of your plans and goals shown to you in the form of cash balances.
Having a solid, fully developed business plan also is important if you are going out to obtain funding. A professional business plan shows your lenders or investors that you know what you are doing and further demonstrates to them the capability and competence of your plans, as well as your professionalism, thereby giving them the confidence, they need to lend to you. It can also serve as a management tool that can be used to set and measure goals for each of your department managers and other employees, as well as performance objectives. Finally, it may serve as a blueprint for valuing your company based on your cash flow in the future and to show you whether or not you will have enough value in your company to fulfill your personal goals, and if not then how to get there.
Contact me today for a free consultation on getting started with your plan. The whole plan can take as little as 3 days and will likely be the best planning investment you will make.