Does your business have a financial plan for 2020?
As a business owner, you’re used to planning ahead. Key projects, goals, targets and business development are just some of the things you’ll probably be thinking about as this year draws to a close. But how much thought have you given to your business’s finances for the year ahead? If you haven’t got a financial plan for 2020, now’s the time to create one.
Why you need a financial plan
We get it: running your own business is about so much more than money. Nonetheless, you need your business to live up to certain financial expectations. Creating a financial plan paves the way for that success and ensures you spend 2020 focusing on what you do best – running your business – rather than worrying about the numbers.
What should your 2020 financial plan cover?
The scale of your annual financial planning will depend on your business, but you’ll typically look at:
• Forecasting revenue – depending on your business, this might take the form of a detailed, month-by-month sales forecast, or it could be as simple as a goal to grow revenue by a certain amount. Your accountant will help you figure out what’s most appropriate for your business.
• Planning resource – do you expect business to increase next year and, if so, do you have the skills, capabilities and resources to handle that growth? Your planned 2020 business activity might require a scale-up in resources – new hires, training, and so on – in which case, you’ll want to plan for those costs.
• Budgeting for everyday business expenses and big-ticket purchases – naturally, there are regular expenses to plan for (important for cash flow, which we’ll get to next), but you may also have asset purchases on the horizon that you need to budget for. Are you, for example, thinking of purchasing new equipment in 2020?
• Boosting cash flow – as well as planning for outgoings in 2020, it’s also worth looking for ways to proactively improve your cash flow. For example, could you tighten up your credit control processes, or perhaps negotiate new creditor terms with suppliers?
Where to get help
At Jupp Castle, we see ourselves as more than just accountants. Not only will we work with you to create a tailored financial plan, we’ll help you find new ways to improve your business in 2020. Discover more about our award-winning approach.