Financial Business Plans Tips for Smaller Organizations


Starting out on your business venture can be an invigorating experience; you are all set to launch your brilliant ideas and have the capital to do so. However, that isn’t all there is to a successful start-up launch; you need a business plan, and a major part of the business plan is a financial plan.

Talking to business and financial experts, we have brought together some essential tips you need to form an effective financial plan for your business.

Analyze the Market

“To put together a successful financial business plan, it is crucial to analyze the market thoroughly. It is advisable to conduct this analysis well in order to make the writing of other elements of your project, such as the marketing strategy, the financial plan, and the operation plan, easier. My advice to small businesses is to monitor market behavior through social media.

“Assess what your target audience is looking for, how it communicates, and what its main needs are. After you have clarified these elements, all the other sections of the financial business plan will be much easier to write.”

David Adler, Founder & CEO of The Travel Secret

Monitor Cash Flow Regularly

“Cash flow is the lifeline of a company and business owners need to be very careful in managing to ensure that they’re holding just the right amount of cash at any given time. By effectively managing cash flow, a business is better equipped to anticipate challenges in both receiving and spending money. This avoids any future cash flow issues such as the inability to pay back creditors which can lead to expensive interest rates on overdrafts or deteriorating credit terms.” (Kevin Mercier)

Diversify To Reduce Risk

“While some risks are systematic, thus unverifiable, there are certain risks that your financial department can identify and avoid. A good financial plan includes allowances for certain risks such as provisions for doubtful debts, risky inefficiencies, and unexpected expenses. During times of uncertainty, financial plans may include situational analyses and contingency plans for various scenarios that can allow a business to prepare accordingly and minimize potential losses.” (Kevin Mercier)

Clear Cut With Indicators For Progression

“After starting a new company, analyzing its progress is difficult, hence the need for accounting experts to have it done for you. Small businesses tend to progress and grow at a higher rate which is highly motivating for business owners and employees alike. A financial plan that clearly illustrates sales, profit, and cash flow growth encourages all internal stakeholders. These numbers and clear indicators of progress are highly motivating and encourage employees and business owners to work harder.”

Kevin Mercier, Founder Travel Blog

Don’t Forget to Pay Yourself

“As I was trying to get my business up and running, I would reinvest every penny I earned back into the business without thinking of my own personal needs or finances. It can be hard to stay motivated when you don’t enjoy the rewards of your hard work. Therefore, include fair compensation for yourself in the annual financial plan. 

“You have to remember that although you’re the owner of the company, you still need to adequately pay yourself for your efforts.  Whether or not you choose to pay yourself a high or low percentage, surely depends on you. But keep it at a level that drives you to move forward.” (Austin Fain)

Invest In Adequate Financing

“Your financial plans need to have a source of additional capital beyond your retained earnings. Even the largest organizations take out loans to fund their growth and their manpower. You cannot expect it to do it; just be relying on your revenue. If your next year’s goal is to grow your business by x percent amount, then figure out what you will need for that. 

“Would you need additional raw materials, capital, or labor? If so, then can you finance it without taking out a loan? If the answer is no to the previous question, then head over to your bank and apply for small business loans.” (Austin Fain)

Keep A Close Eye On Your Spendings

“Not every expense is worth spending your hard-earned cash on. Whether it’s the new ERP software or a comfortable office chair, try to measure what’s the ROI of every expense that you’re making. Remember, a penny saved is a penny earned, and if you’re spending money on irrelevant expenditures then you’re not optimizing your cash flow efficiently enough.”

Austin Fain, CEO Perfect Steel Solutions

Put Aside a Budget for New Hires

“My tip when small business owners make a financial business plan is to put money aside to hire new people to help your business grow. This is especially crucial at the beginning because employees are your best asset, and good ones can increase your business values much more than most other investments you can make. 

“When I started I hired an accountant who helped me find ways to lower my tax burden. In addition, since I founded an insurance company, I hired a lawyer, not for potential cases, but to give me legal advice that would help prevent cases like that in the first place.”

Darren Nix, Founder of Steadily Landlord Insurance

Be Realistic

“A good business plan is important especially if you are going to present it to investors. When presenting to investors, it is good to present highly favorable scenarios wherein the business will be able to gain a lot of profit but you also have to be realistic with your numbers. Presenting a too good to be true number will only scare away investors and may lead to distress if you can’t achieve it. Instead, I suggest you show two possible scenarios in your business plan, one that is realistic and another that is too good to be true.”

Tony Grenier, CEO Instrumental Global

Translate Financial Goals into Tangible Activities and Outcomes

“One of the most powerful things your business can do to create an effective financial business plan is to translate financial goals into tangible activities and outcomes. It’s not enough to establish a goal of 10% growth in sales. Instead, think about the impact your desired growth will have on day-to-day activities. Maybe it means contacting 5 more leads per day or increasing the average customer account size, which may require a new marketing or sales initiative.

“It’s easier to hold yourself and others accountable for the activities and events that drive revenue, and it allows you to adjust faster if the plan doesn’t unfold as expected.”

Brandon Crossley, CEO at Poindexter– a simple financial planning software

Prepare Backup

“The most crucial thing when planning your finances is to prepare a backup. You never know when things may go south. At that time, having a backup plan can be your business savior.” (Rahul Vij)

Consider and Note Even The Tiny Expenses

“Whether it costs you a penny or a dollar – note down every expense. The expenses like daily beverages for the staff or the stationary may seem insignificant but they must be considered when creating the financial business plan.” (Rahul Vij)


“Well, this does not require much of an explanation. Just one thing, apart from general insurance, also go for a business line of credit insurance. For this, you can put a share of your profits as collateral. In return, it helps you resolve your cash flow problems.” (Rahul Vij)

Analyze Your Risks

“It is crucial to analyze the risks your business has. To start with, will your investment be enough? Will you have a streamlined cash flow? Do you have coverage against any unpredictable financial losses? While one can deal with some of these through insurance policies. Others one can tackle by planning effective investment strategies and fund savings.” (Rahul Vij)

Predict Your Cash Flow

“No one can determine the exact future. Yet, it is always wise to make assumptions and prepare for any unexpected scenarios. That’s how predicting cash flow helps you to create a better financial plan.”

“Consider the factors above to prepare a strategy. Then refine it from time to time to make it align with your new goals.”

Rahul Vij, CEO WebSpero Solutions