Developing a solid business plan outline

Business financial planning is an essential part of any broader business plan outline. A sound financial plan will confirm whether your business model is viable.

Work with your business plan

Use your financial plan to develop your financial objectives. It will help you to analyse the business environment, recognise your vision and objectives and identify the types of resources needed to achieve these objectives.

“A sound plan will help prevent any unforeseen blow-outs down the track,” says Stephane Majman of David Jaffe and Associates. “If you haven’t done the homework, you take the risk that your finances won’t be in order either.”

Prepare an accurate budget

Your budget is a cornerstone of financial planning for your business and should be an accurate account of where your finances are going.

“The obvious objective of your budget is to make sure that your total income for a given period will always exceed or match your losses,” Stephane says.

Account for all costs

When planning your budget, make sure you summarise all the costs that will go into the endeavour. As with all aspects of financial planning, risk management strategies are crucial to ensure that the budget you set for your company is accurate over time.

Keep firm control over your lines of credit to ensure that any loans you have taken to bolster your finances do not create burdensome interest costs in the long term.

Resources are priceless

Develop a list of the resources you have, or will need, to fulfil your objectives. As well as financial resources, consider how you will source labour, equipment and materials and what these will cost.

In terms of human resource planning, it is important to include reasonable objectives your employees can meet. This keeps your business running smoothly.

Cash flow is critical

Cash flow can make or break your business. It comprises:

• funds coming into a business, from customers, investors and your own resources
• funds flowing out to suppliers, creditors (through interest on loans), staff and the government.

It is important to keep a constant handle on what your cash flow is doing - and when. “Timing is very important,” says Stephane. “It’s no good receiving a flood of payments after your creditors have pulled the plug on your finance.”

Make sure you’re making a profit

Making a handsome profit is the goal of all businesses, but it can be difficult to pinpoint just how much your business is making - if anything.

When putting together your financial plan, it is essential to know the difference between gross and net profit and to be able to identify exactly where these figures stand at any given time.

It is important to seek advice before you put together your business financial plan.

Financial planning services can help you unlock the secret to a comprehensive, fail-safe strategy.