Financial Planning for Business Owners
Financial planning for business owners is often two-sided: personal financial planning and planning for the business.
As a business owner, you have access to many financial tools that employees do not, providing a significant advantage but also potentially becoming overwhelming. A financial plan can help alleviate this complexity.
A financial plan assesses your current financial position and outlines your desired future state. It identifies your short, medium, and long-term financial goals and provides a roadmap to achieve them, both personally and for your business.
Why do you need a Financial Plan?
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Worry less about money and gain control.
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Organize your finances.
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Prioritize your goals.
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Focus on the big picture.
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Save money to reach your goals.
For a business owner, personal and business finances are connected. Therefore both sides should be addressed: Personal and Business.
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What does a Financial Plan for a Business include?
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There are 2 main sides your business financial plan should address: Growth and Preservation
Growth:
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Cash Management- Managing Cash & Debt
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Tax Planning- Finding tax efficiencies
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Retaining & Attracting Key Talent
Preservation:
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Investment- either back into the business or outside of the business
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Insurance Planning/Risk Management
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Succession/Exit Planning
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What does a Personal Financial Plan include?
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There are 2 main sides your financial plan should address: Accumulation and Protection
Accumulation:
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Cash Management – Savings and Debt
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Tax Planning
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Investments
Protection:
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Insurance Planning
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Health Insurance
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Estate Planning
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What’s the Financial Planning Process?
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Establish and define the financial planner-client relationship.
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Gather information about current financial situation and goals including lifestyle goals.
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Analyze and evaluate current financial status.
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Develop and present strategies and solutions to achieve goals.
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Implement recommendations.
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Monitor and review recommendations. Adjust if necessary.