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 do not. Having access to these tools is a great advantage; however, learning about and understanding these tools can 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. Therefore, your financial plan should address both.
What does a Financial Plan for a Business include?
There are two main sides your business financial plan should address: Growth and Preservation
Growth:
- Cash Management – Managing Cash & Debt
- Tax Planning – Finding tax efficiencies
- Retaining & Attracting Key Talent
Preservation:
- 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 personal financial plan should address: Accumulation and Protection
Accumulation:
- Cash Management – Savings and Debt
- Tax Planning
- Investments
Protection:
- Insurance Planning
- Health Insurance
- Estate Planning
What is the Financial Planning Process?
- Establish and define the financial planner-client relationship
- Gather information about the current financial situation and goals, including lifestyle goals
- Analyze and evaluate the current financial status
- Develop and present strategies and solutions to achieve goals
- Implement recommendations
- Monitor and review recommendations – Adjust if necessary
Next steps
Talk to us about developing your financial plan for you and your business so that you can achieve your financial goals.