Creating a financial plan for your business is critical not only for your business’ survival but also for its growth. However, many small business owners struggle to create a comprehensive financial plan that considers all of the financial needs of the business – which should include long term growth goals and contingency plans for any unexpected circumstances. Below, we have compiled a list of the strategies business owners should start with when considering a comprehensive financial plan.
Talk to a professional when your business needs access to capital – especially if you have just opened your doors. Many new companies do not qualify for traditional, low-interest loans, and some new business owners mistakenly turn to loans with high-interest rates. This can turn out to be a problem for the business in the long-run. If sales are slow at the beginning, then the company could struggle with repaying its debt. It is a good idea to explore all loan options with a professional when you are considering options to raise capital to expand your business. Any financial plan should include ways of accessing capital that won’t cripple your business in the long run.
We get it. Business owners are often too busy to research the most favourable tax strategies available to them. However, paying more in taxes can be avoided. Examining different tax strategies with a professional could free up cash and allow the business to achieve its maximum growth potential.
As 2020 has taught us, anything can happen. Regardless of the external or internal circumstances, your business should be prepared. It is a solid financial strategy to develop a contingency plan that will allow your business to adapt to new circumstances.
Do you have a key employee or employees that you rely on to run the business? What would happen if they became ill? What if something happened to you? Would your family still receive an income? Luckily, there are insurance policies designed to protect your business and family in the event that any of these possibilities become an unexpected reality.
Most of us will want to retire at some point. But how do you plan on transitioning out of the business and into retirement? Many successful business owners understand the importance of having a retirement plan for themselves and their spouse independent from the business. Take a moment and jot down some retirement goals to get a general idea of what your retirement will look like for you. Do you plan on passing the business down to your children? At what age would you like to retire? A good financial plan will help you to retire when you want and how you want.
Let’s face it. These days lawsuits happen more frequently than business owners like to admit, so it is a good idea to be prepared. When designing a financial plan, investigate what type of liability insurance would be best to protect your small business. Would general liability insurance suit your needs? Or would you be better suited for a professional liability insurance plan?
This is certainly not a complete list of all the main strategies that a financial plan should include, but it is a starting point to work from. Please don’t hesitate to reach out if you think we can help develop a financial plan for you and your business.
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