What do you do to create a financial plan that'll effectively help you reach your goals? Do you even plan your company's financial growth?
If you don't plan, or don't do it correctly, your company will go nowhere because of its lack of direction.
But you don't have to panic or scramble to throw together a financial plan. You can easily draw one up in five steps.
They're easy, effective and will ensure your company continues to grow.
Here are the five steps you must follow...
Follow these five steps to draw up a financial plan
Step #1: Assess where your business is in terms of its industry
It's important to compare your company's growth, thus far, with other companies of a similar age in the industry. Is it struggling in comparison or thriving? This will give you an idea of how strong it's financial position is.
Step #2: Analyse your accounting records to understand your financial history
You need to understand what your company has done up until this point. This will give you an idea of any problem areas you need to deal with to grow.
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Step #3: Look at the current economic situations
The economy will have a big impact on your business' growth. If the economy is weak, your business will grow very slowly and it'll take a long time to reach your goals.
Step #4: Based on that information, create your goals
Using the information you collected, set out your company's financial goals. For example, you may want to grow financially by R150 000.
These goals must be realistic though because if your company fails to achieve them it'll impact company moral.
Step #5: Create a financial budget to help you achieve your goals
Creating a budget can help you manage your expenses and cut back where you can. This way you can ensure you always make a profit and keep growing towards your goals.
By following these five steps you can easily create a financial plan that'll take your business to the next level.
PS: We strongly recommend you check out the Practical Accountancy Loose Leaf service
. It will show you how to improve your cash flow, eliminate simple accounting mistakes, analyse your financial statements, identify errors, slash your audit fees and eliminate fraud in your company.