How to write a financial plan for your business

Building a thriving business is a journey which will present its fair share of opportunities and challenges. To guide you along the way, developing a financial plan will give you the best chance to enjoy success. Michael Abrahamson, a financial planner from Flinders Wealth says, “the plan should be well thought out and at the centre of your growing business. This plan should complement your business model, drill into the all-important financials including a cash flow forecast, profit and loss, and balance sheet.”

As most businesses don't make a profit in the first few years, they fall back on their funding plans. Your financial forecast will help you identify shortfalls and show how your business will be funded – typically from cash injections from yourself or a bank – until the business is profitable.

Key considerations for your financial plan

The Flinders Wealth team advise the following:

  • Define who the business owners are. What are their priorities – scaling the business, market share, profits, and dividends.
  • Outline your business structure – sole trader, company, trust. These can impact the priorities of the business and how it is operated.
  • Be realistic with your numbers! And remember a business can take years to build.
  • Work with an accountant and utilise an accounting software package. It’s important to get your business set up from the beginning, changing accountants and software down the track can be costly.
  • In any business cash flow is vital for business planning. Flinders Wealth recommends breaking your cash flow forecast into monthly, quarterly and yearly plans. This will identify periods when inflows and outflows fluctuate. Remember your cash flow forecast is based on the expected inflows and outflows from your bank account – so use cash items only.

In the initial years, your financial plan is crucial for survival and funding the growth of your business. Download our free financial template below to help you plan and identify expected cash inflows and outflows.

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Download our free financial plan template