Whether you are thinking of starting a business, have recently started one, or have been a business owner for a while, it is still essential to have an effective financial plan. You want to be able to track, review, and edit your budget, financial goals, income management, and emergency funds. By taking these actions, you can help your business be successful.
Financial Elements for Your Business
Certain financial elements can either make or break your business. Tracking your finances, setting realistic, tangible goals, and understanding the relationship between money and your business can make for a promising future.
Expenses and Revenue
Starting out as a new entrepreneur, money can be difficult to come by and should be carefully managed when it does come. Whether you are barely making money or your business is thriving, it is still vital to record your revenue and expenses. Not only will it keep your business alive, but it will also help you stay organized, which will save you time and energy.
Budgeting
Essential to every business, creating and sticking to a budget is an element that will help you stay out of debt. Budgeting your money helps with emergencies and, if done correctly, will show you if there is any excess cash flow that can be reinvested into your business.
Emergencies
For small business owners, every dollar counts, and being prepared for emergencies will help soften the financial impact it could have on your business.
Stay Out of Debt
Sadly, many businesses shut down within the first two years due to inexperience and a lack of financial planning. To combat this, creating a strict budget will allow you to see where the cash flow is and where you need improvements. Without a budget or financial plan, you risk losing your business. Creating a financial plan isn’t a guarantee that you will stay in business, but it is a method to help you realize what you need to accomplish to stay afloat.
Reinvest
Reviewing and sticking to your budget will help you realize what improvements can be made to the other parts of your business. Whether it be marketing, creating an aesthetically pleasing storefront, or reinvesting your money in new products, there are many things that can be done to help grow your business and achieve your financial goals. It also allows opportunities for investors and relationship building, which can also benefit your business. Investors would mean an injection of money to motivate and propel you to the next step of growing your business, which could lead to a new or larger space, better equipment, or other growth opportunities.
Forecasting and Goals
Along with having a budget and goals, having a plan for your business will help you stick to a budget and track how it is progressing. This indicates whether the goal is easily achievable or not. One advantage of having a plan is you can alter the goal and increase or decrease it for the next goal. Business valuation services help you understand what your business is valued at so you can adjust your goals.
Relationship Between Financial Planning & Accounting
Accounting and financial planning have many similarities and are applicable to business owners. Whether you’re analyzing your revenue and expenses, understanding your budget, or setting financial goals, Intentional Accounting is here to help you reach those financial and accounting goals.
Contact us today so we can help you and your business grow and thrive with services from Intentional Accounting!
