Finance is the life blood of any business establishment, without money nothing can work smoothly.
Therefore, if you have generated your business idea, and you have done your market research, (you can get to know how to do this by reading our previous posts on SME GUIDE).
The next step is to plan your finance, where to get it and how to use it. The following steps will help you on how to run a smooth and efficient financial plan.
Project your spending and sales
Know how much you are willing to spend; the bible says a king does not go out to war without counting all his expenses. Get to know what you will need, write it down to the smallest expense you will ever make on the business. In the same vein you need to project how much of your product you can actually sell within a period of time.
Create financial projections
The second step in engaging in financial planning is to know how much the business idea can actually bring in. You might not know the height of the amount you might make, but try to get the average of what you can actually make out of the business; this will help you with your financial projections. It is important for you to write all this down for reference purpose and clarity.
Use the projections for planning
With all the projections you have made, get a concise financial need of what you are going to use to make your business a success. What are the resources? How will you get them? Where can you source for it? These are the questions you need to ask yourself.
Plan for contingencies
Always prepare for the raining days, it is very important and essential. Have a dedicated amount of money in your budget for days when you might break even or make loses.
Things change, therefore keep monitoring your budget and plans, and make necessary changes, when you need it.
Importance of financial planning
You need financial planning for your new business for Income, Cash flow, Capital, Family security, Investment, Standard of living, Financial understanding, Assets, Savings, Ongoing advice.
Get this done and let’s talk about more about starting your business on our upcoming posts SME GUIDE.
Do you need any help with your business? Drop a comment and i will get across to you.