How to Financially Plan for your Small Business
One key aspect of running a small business on which many entrepreneurs fall short is their financial planning. That’s because they’re mostly just trying to keep the lights on at the business and keep it operational - looking into the future, especially when there’s dollar signs involved - can be really intimidating.
But, it’s important to have solid footing with your finances because not only does it make your business stronger, but it also makes it easier to find funding. Lenders like seeing a business with a financial plan, and with their finances organized.
Financial planning can feel scary and overwhelming, so here’s a checklist to make sure you’re on the right track.
Set Clear Goals
When you’re financial planning, the first order of business is to know what your goals are. You want to have a mixture of short and long term goals - where do you want your business to be financially in six months? How about five years? These goals should be SMART - Specific, Measurable, Attainable, Realistic, and Time-Bound.
Have metrics such as annual revenue, annual profit, percentage of COGS reduced, things like that to keep you accountable.
Organize and Track Income and Expenses
Keep those receipts! Organizing your income and expenses can be a bit of a headache, but there are ways to make sure that you’re keeping an accurate count of what’s flowing in and out of your business. Using accounting software like Quickbooks or Xero can be useful, but you also need to have a good bookkeeping schedule (or hire a good bookkeeper).
Stay Compliant with Tax Obligations
Know your tax obligations and when they’re due - document EVERYTHING! For taxes, it might be worth hiring a professional accountant.
Review and Adjust:
Your needs change year after year, maybe even in the middle of the year, so take some time to review your financial performance against your goals and adjust to what you need to do next.
Planning your finances for your business’s next step doesn’t have to be scary
Once you have a solid footing on your financial plan, you might be thinking about what your business’s next steps will be. If getting a loan to grow is part of it, Honeycomb Credit is here to help with a variety of different investment options that’ll get you the funding you need to grow! For more information, fill out the form below: