Financial Planning for business owners is often two-sided: personal financial planning and planning for the business. Business owners have access to many financial tools that employees don't have access to. This is a great advantage, however, it can also be overwhelming. A financial plan can relieve this.
A financial plan looks at where you are today and where you want to go. It determines your short, medium and long term financial goals and how you can reach them. For you, personally, and for your business.
Why Do You Need a Financial Plan?
- Worry less about money and gain control
- Organize your finances
- Prioritize your goals
- Focus on the big picture
- Save money to reach your goals
For a business owner, personal and business finances are connected. Both sides should be addressed: personal and business.
What Does a Financial Plan for a Business Include?
There are two main sides your business financial plan should address: growth and preservation.
- Cash management – managing cash and debt
- Tax planning – Finding tax efficiencies
- Retaining and attracting key talent
- Investment – either back into the business or outside of the business
- Insurance planning/risk management
- Succession/exit planning
What Does a Personal Financial Plan Include?
There are two main sides your financial plan should address: accumulation and protection.
- Cash management – savings and debt
- Tax planning
- Insurance planning
- Health insurance
- Estate planning
What's the Financial Planning Process?
Establish and define the financial planner-client relationship.
Gather information about a current financial situation and goals, including lifestyle goals.
- Analyze and evaluate current financial status
- Develop and present strategies and solutions to achieve goals
- Implement recommendations
- Monitor and review recommendations. Adjust if necessary