Financial planning for your business is critical if you want to achieve your income goals.
Some small businesses just go from week to week hoping that they will have sufficient sales or provide services that will bring in suitable income. This hit and miss approach causes stress and all manner of problems.
A financial plan will establish financial goals, benchmarks and categories for the money you want to bring into your business. From that financial plan – or as part of it, you can create a cash flow forecast, which helps you manage your income and expenditure.
There are different ways to create a financial plan, and it doesn't have to be complicated. Here are two simple models you can choose from.
Start with the end in mind. Decide how much turnover you want to bring into the business next year. Remember this is only the gross revenue. Then look at your different revenue streams and assess how much turnover is required from each unit.
For example, if you have...
When starting your own business it’s often easy to get yourself started, but a lot harder to keep yourself going when things get tougher. Whether it’s a slowdown in the market, increased competition or the pressure of work, staying committed and maintaining a positive focus in your business can be a challenge. Here are ten tips to help you stay committed.
Business and emotions don’t really seem to mix very well. But as emotions are a daily part of our lives, short of becoming robotic, you may be faced with the two intermingling at some point in your career.
Here are a few tips to help you stay on track and overcome emotions in your business life.
#1 – Take a deep breath – If you’re having a bad day or particular difficulties at home, it may not be easy to switch back into business mode, but it can be done. Breathing is an effective strategy for all sorts of issues such as panic attacks, anger control or simply switching back to a positive state.
When you’re feeling overwhelmed, take a short break and find a quiet place where you won’t be interrupted for a few minutes. Then take a few deep breaths. Involve your whole body in the process. See your stomach inflate like a balloon as you breathe in slowly for a count of seven to ten and then slowly let the...
When you’re starting a business, seeing the “big” picture is important. Many entrepreneurs have stated that had they looked at the small details in their business they may not have started the business in the first place. This is because many of us get bogged down by all the small details and often it can put us off starting something new.
If you’re starting a new venture, here are a few tips to help you stay focused on the “big” picture:
#1 – Don’t Worry. It’s easy to worry about the fine details of starting a business. But it’s important not to get stuck on these. Keep in mind that whatever you don’t know how to do, you can learn or get help with. In business, there are services and experts for just about anything you can imagine. You can always turn to them for help when the time comes. But as the old saying goes – “I’ll cross that bridge when I get to it.”
Whenever I start working with business owners I ask ‘how much money do you want to make?’ and inevitably the reply is not a dollar amount.
I hear replies like - I just want enough to pay the bills, I want to offer really good services to people – the money is not important or my favorite – I’ll let the accountant take care of that.
The other set of responses I hear are a bunch of excuses as to why making more must be a lot more work or why they can't make more because they're "just getting started" or I hear a long, detailed story explaining what they're planning to do etc. etc.
It is only after a lot of encouragement that the business owners actually state a figure.
Why do we do this? Why is it so hard to put a monetary goal into your business? I think for many people we have been brainwashed into the idea that it’s not ‘nice’ to talk about money. Or that making lots of money is somehow not spiritual or just plain bad!