Creating a Small Business Financial Plan: 5 Tips for 2020

December 10, 2019

The new year is closer than you think. There are a scant few weeks left until the 2010s decade ends. Next year is the perfect time to start the business that you have been picturing. For that, you need a good plan. 

Have you perfected your business plan? You don’t have much time to get started. There’s no time like the present, especially when you have a few weeks to go! 2020 is filled with opportunities and new frontiers. 

Tips For Creating Your Financial Plan

Create Leeway For A One Percent Change

At DeepSky, we believe that every business can make a one-percent change to increase their profits. You need to learn how to spend your money effectively within cash flow. That means knowing where to allocate your funds. 

 

One example of a change is increasing your prices on certain products or finding ways to reduce the cost of goods sold. You have to figure out which change will have the most financial impact. 

Budget Your Expenses

You have to pay your expenses before you can determine the profit. Otherwise, you are not running a business. Instead, a vanity project has ensued. Always pay your expenses, which includes debt and startup costs.

Budget Planning For Expenses

Once you have made that initial investment, expenses consist of fixed and variable costs. Fixed costs include the raw material you need to make your products, rent, utilities, and salaries that you pay employees. These stay consistent over a long period of time since rent only changes annually. Variable costs are those that change and are consistent; advertising is one such example. 

Consider Your Affordable Financing Options

How is your line of credit? You need to consider if you want to take out loans or use a credit card to finance your business. Relying on debit alone makes no sense.

Study the benefits and rewards of various credit cards for business. Determine if you want cash back or miles. Building your credit also means that you can borrow more, which is important. 

Create A Safety Net

There is always the possibility that one quarter or week will turn out poorly, and you run at a loss instead of a profit. Any event can cause this. When that happens, your business will go under. No vendor or customer waits for you to recover. You need to have available cash to maintain the flow

Factor in funds for an emergency bank account or line of credit. That way when your business encounters its first obstacle, you won’t be panicking and entering the red.

Project Assets And Liabilities

Assets will include property, vehicles, and equipment needed to run your business. As all assets amortize and lose their value, you have to determine how much you need 

Liabilities include debts, such as from credit cards or mortgages. You need to figure out how your line of credit is, and how much you can borrow. Keep them organized so that you save on interest. 

Perfect Your 2020 Sales Forecast With DeepSky

DeepSky wants to help you tackle the year with a strong start. We help businesses that need specialized accounting and financial services to reach the next level. 

Contact us today to find the experts you need. DeepSky wants to help you reach your highest potential in the upcoming new year. With our help, you’ll have the perfect plans and strategies. 

Follow & Like Deepsky 👇🏻