Business Financial Planning: A Guide to Setting Goals for Your Business

Business financial planning is an essential tool for any business that aims to stay in the market and grow over time. The task of planning finances, however, can be particularly difficult for small entrepreneurs, who end up dedicating most of their time to day-to-day corporate operational tasks, neglecting financial control and planning what comes in and goes out of the company's cash flow.

This habit – very common among entrepreneurs, however, can bring great losses to any business – regardless of its size. Maintaining financial planning, on the other hand, usually generates a series of benefits for companies, directly impacting each of the tasks carried out within the business environment.

Thinking about helping you keep your business finances organized, we have prepared a complete guide that will help you define goals for your company and maintain efficient business financial planning.

Continue reading and find out how to control your company's income and expenses and keep your business on track for growth!

Why is it worth investing in good financial planning?

Financial mismanagement is a problem that affects many individuals and legal entities In a country where financial education is still quite scarce, many people end up neglecting to control their personal and business finances – which ends up resulting in debt and, often, the closure of thousands of businesses every year.

Good business financial planning, however, can be the key to success for entrepreneurs who want to keep their business finances organized, allowing them to be controlled in a simple and intuitive way, but in a detailed manner.

It is through financial planning that the administrator will be able to carry out more efficient financial management , closely monitoring every detail inherent to the financial health of his company and anticipating unforeseen events.

Therefore, it is essential that any company – whether small, medium or large – invests in maintaining good financial planning. This simple – yet extremely important – habit can prevent serious headaches inherent to your business in the future!

How to make efficient business financial planning?

Contrary to what many people believe, creating an efficient business financial plan is not rocket science. To perform this task, the administrator simply needs to follow some specific steps and dedicate themselves to maintaining control over their company's finances.

Learn below the steps you should follow to start building a good financial plan for your business! Check it out:

1- Analyze the current situation of the business

To make an efficient business financial plan, it is essential to know the current situation of your company. Therefore, the first step to having control over your business finances is to assess your situation.

The balance sheet is key to this analysis. Identify the assets – the goods the company owns, such as cash on hand, machinery, equipment, products in stock, etc. – and the liabilities of the business – the debts inherent to the company, such as rent, financing, among others, and check the company's financial situation.

2- Record the flow of money

Recording what comes in and goes out of the company's cash flow – also known as cash flow – is a must for every business owner. Unfortunately, not all entrepreneurs have the habit of keeping a record of money coming in and going out – which often results in major problems over time.

Therefore, it is important that you record and keep track of all accounts payable, accounts receivable, taxes, debts and any other cash inflows and outflows from the company's cash register. Always keep an eye on the available cash balance.

To complete this registration step correctly, month after month, it is important for the entrepreneur to invest in financial control tools. This type of tool successfully replaces notes on paper or in Excel spreadsheets, making financial control more efficient and simple to maintain.

In addition, business financial control platforms optimize the time of the administrator or team responsible for the company's financial management. Errors and omissions inherent in business financial management are also reduced to extremely low levels when the company uses a good financial control tool.

3- Make projections for the future

The next step is to plan. Make a habit of making projections for the future of your company, setting goals and targets to be achieved. After all, every entrepreneur wants to see their business grow over time, right?

Try to make realistic projections that are compatible with your company’s current situation, but don’t let optimism go by the wayside. Set goals, share them with your employees, and try to motivate them to achieve them, together with you!

At this stage, a business financial planning and control tool can also be very useful. you can define how much you intend to spend on each category inherent to the business or how much revenue you intend to achieve in a given period.

When planning, however, don't forget to pay attention to seasonality and other issues that, in practice, can result in changes in revenue throughout the year. Don't forget that your main goal is to maintain good business financial planning throughout the year, so you need to pay attention to every detail.

4- Pay attention to the numbers

The fourth step is to put the numbers related to your business on the agenda. At this point, you need to consider and calculate the correct price for the products and services offered by your company – respecting the cost margins, expenses and estimated profit, reducing costs whenever possible and preparing a budget that allows you to always keep your accounts in order.

5- Put your financial planning into practice!

Once you have completed the four steps to building an efficient business financial plan, it is time to put them into practice. Try to stick to the schedule and budget you have set and don’t forget to manage your business’ finances month by month.

With dedication and focus, you can implement new habits in your daily life and in the routine of your entire team and maintain a financial plan that is always well organized and aligned with the reality of your company, increasing the chances of growth of your business in the short, medium and long term!