Financing: How to create a financial plan for your business?

Since a firm begins operations, having financing and a plan to use and generate resources is something important. It is even crucial before starting a project, for it to be successful.

In fact, 90% of businesses fail during the first five years of operation, and inadequate financial planning is a contributing factor in some of these failures, which include having no or little control over cash flow, a disorganized budget, no capital reserves, and a high amount of debt.

This illustrates both the value of effective resource management and the effects of irresponsible planning.

Create a financial plan for your business

For this reason, we share a guide with the steps that you must take into account if you want to have a solid business that can obtain financing sources without problem and knows how to manage its resources.

1. Objectively analyze the state of your company

Look at the moment your business is going through and where you want to take it. It is at this point that the expected profits and financial ratios are defined. You have to analyze liquidity, stagnation and profitability.

2. Determine the resources needed

Next, you must define the funds that the venture will have, according to the investment capital, so that what is set allows the business to consolidate and position itself within the market. The optimal thing is that the plan, in this sense, is designed for 5 years.

3. Project sales

Then estimate the sales that can be achieved in those 5 years, along with profits, costs and expansion, so that it is easier for you to identify the financial demands and be prepared to face them without hitting productivity.

4. Check and control resources

Since you know where you want to take your business and how you are going to manage the funds, then establish a control system that helps you know the capital you have available, and to supervise that it is used in the way in which it is supposed to be. be used.

5. Consider the unexpected

Not everything will always turn out to the letter. You can face various scenarios that do not even have to do with your business directly, such as crises, devaluations and reforms, among others, and you must prepare yourself with emergency funds and early solutions.

6. Determine compensations

It is important to have the happiness of your employees as part of the plan and ensure that their skills are the best, so you should consider training them and compensating them based on their performance, so that you motivate them to give the extra. This will also increase productivity.

Having all these points very clear, together with the correct use of credit, your business will have a bright future.