How to create a 5-year financial plan for your business
Owning your own business is a lot like having a hot CrossFit bod – it’s totally awesome, but it also takes a lot of hard work and if you let the reins slide even a little bit you stand to lose all the proverbial gluteus maximus gains you’ve acquired. Okay, so the metaphor doesn’t totally work, but you get what we mean.
If you’re currently the proud owner of a shiny new business in sunny South Africa, one thing is for sure – you need to draw up a 5-year financial plan STAT. It’s the only way to ensure that you’ll be able to scale your business in a sustainable fashion as you grow. Not sure where to begin? No problem. Here are few important steps to get you started:
Find a template to use
The great thing about living in the digital age is that you can find a template online for pretty much anything related to business management. This includes a financial plan. Get yourself one of those and use it as a guideline with regard on the information you need to gather.
Plot out your now + your future
Your financial plan needs to take into account where you see your business going in the next five years, which means you’ll need to know where you are starting from. To do so you will need to draw up a balance sheet, income statement, cash flow per month, tax returns, personal financial statement and more. Then you need to plot out where you’re going and how you can manage your income to get you there.
Get yourself an accountant
As much as we would like to recommend doing things on your own to save on money, we also know that this approach is what the old people call pennywise and pound foolish. If you want to do things the right way (and stay sane while doing so), find yourself an innovative accountant you can trust. It will make the financial management side of things a whole lot less painful, we promise.
There you have it – the first steps to drawing up a five-year financial plan for your business. Naturally, these are just the broad strokes, but once you have these in place it will become much easier to add the finer details. Check back soon for more insider info about all things rand and cent.
In the meantime, feel free to reach out to a member of the Experity team to find out more about our financial services; we’re here to guide you through the crazy maze of South African business finance.