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How to Prepare a Financial Plan for Startup Business (w/ example)

Financial Statements Template

Free Financial Statements Template

Ajay Jagtap

  • December 7, 2023

13 Min Read

financial plan for startup business

If someone were to ask you about your business financials, could you give them a detailed answer?

Let’s say they ask—how do you allocate your operating expenses? What is your cash flow situation like? What is your exit strategy? And a series of similar other questions.

Instead of mumbling what to answer or shooting in the dark, as a founder, you must prepare yourself to answer this line of questioning—and creating a financial plan for your startup is the best way to do it.

A business plan’s financial plan section is no easy task—we get that.

But, you know what—this in-depth guide and financial plan example can make forecasting as simple as counting on your fingertips.

Ready to get started? Let’s begin by discussing startup financial planning.

What is Startup Financial Planning?

Startup financial planning, in simple terms, is a process of planning the financial aspects of a new business. It’s an integral part of a business plan and comprises its three major components: balance sheet, income statement, and cash-flow statement.

Apart from these statements, your financial section may also include revenue and sales forecasts, assets & liabilities, break-even analysis , and more. Your first financial plan may not be very detailed, but you can tweak and update it as your company grows.

Key Takeaways

  • Realistic assumptions, thorough research, and a clear understanding of the market are the key to reliable financial projections.
  • Cash flow projection, balance sheet, and income statement are three major components of a financial plan.
  • Preparing a financial plan is easier and faster when you use a financial planning tool.
  • Exploring “what-if” scenarios is an ideal method to understand the potential risks and opportunities involved in the business operations.

Why is Financial Planning Important to Your Startup?

Poor financial planning is one of the biggest reasons why most startups fail. In fact, a recent CNBC study reported that running out of cash was the reason behind 44% of startup failures in 2022.

A well-prepared financial plan provides a clear financial direction for your business, helps you set realistic financial objectives, create accurate forecasts, and shows your business is committed to its financial objectives.

It’s a key element of your business plan for winning potential investors. In fact, YC considered recent financial statements and projections to be critical elements of their Series A due diligence checklist .

Your financial plan demonstrates how your business manages expenses and generates revenue and helps them understand where your business stands today and in 5 years.

Makes sense why financial planning is important to your startup, doesn’t it? Let’s cut to the chase and discuss the key components of a startup’s financial plan.

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how to make a financial plan for a small business pdf

Key Components of a Startup Financial Plan

Whether creating a financial plan from scratch for a business venture or just modifying it for an existing one, here are the key components to consider including in your startup’s financial planning process.

Income Statement

An Income statement , also known as a profit-and-loss statement(P&L), shows your company’s income and expenditures. It also demonstrates how your business experienced any profit or loss over a given time.

Consider it as a snapshot of your business that shows the feasibility of your business idea. An income statement can be generated considering three scenarios: worst, expected, and best.

Your income or P&L statement must list the following:

  • Cost of goods or cost of sale
  • Gross margin
  • Operating expenses
  • Revenue streams
  • EBITDA (Earnings before interest, tax, depreciation , & amortization )

Established businesses can prepare annual income statements, whereas new businesses and startups should consider preparing monthly statements.

Cash flow Statement

A cash flow statement is one of the most critical financial statements for startups that summarize your business’s cash in-and-out flows over a given time.

This section provides details on the cash position of your business and its ability to meet monetary commitments on a timely basis.

Your cash flow projection consists of the following three components:

✅ Cash revenue projection: Here, you must enter each month’s estimated or expected sales figures.

✅ Cash disbursements: List expenditures that you expect to pay in cash for each month over one year.

✅ Cash flow reconciliation: Cash flow reconciliation is a process used to ensure the accuracy of cash flow projections. The adjusted amount is the cash flow balance carried over to the next month.

Furthermore, a company’s cash flow projections can be crucial while assessing liquidity, its ability to generate positive cash flows and pay off debts, and invest in growth initiatives.

Balance Sheet

Your balance sheet is a financial statement that reports your company’s assets, liabilities, and shareholder equity at a given time.

Consider it as a snapshot of what your business owns and owes, as well as the amount invested by the shareholders.

This statement consists of three parts: assets , liabilities, and the balance calculated by the difference between the first two. The final numbers on this sheet reflect the business owner’s equity or value.

Balance sheets follow the following accounting equation with assets on one side and liabilities plus Owner’s equity on the other:

Here is what’s the core purpose of having a balance-sheet:

  • Indicates the capital need of the business
  • It helps to identify the allocation of resources
  • It calculates the requirement of seed money you put up, and
  • How much finance is required?

Since it helps investors understand the condition of your business on a given date, it’s a financial statement you can’t miss out on.

Break-even Analysis

Break-even analysis is a startup or small business accounting practice used to determine when a company, product, or service will become profitable.

For instance, a break-even analysis could help you understand how many candles you need to sell to cover your warehousing and manufacturing costs and start making profits.

Remember, anything you sell beyond the break-even point will result in profit.

You must be aware of your fixed and variable costs to accurately determine your startup’s break-even point.

  • Fixed costs: fixed expenses that stay the same no matter what.
  • Variable costs: expenses that fluctuate over time depending on production or sales.

A break-even point helps you smartly price your goods or services, cover fixed costs, catch missing expenses, and set sales targets while helping investors gain confidence in your business. No brainer—why it’s a key component of your startup’s financial plan.

Having covered all the key elements of a financial plan, let’s discuss how you can create a financial plan for your startup.

How to Create a Financial Section of a Startup Business Plan?

1. determine your financial needs.

You can’t start financial planning without understanding your financial requirements, can you? Get your notepad or simply open a notion doc; it’s time for some critical thinking.

Start by assessing your current situation by—calculating your income, expenses , assets, and liabilities, what the startup costs are, how much you have against them, and how much financing you need.

Assessing your current financial situation and health will help determine how much capital you need for your startup and help plan fundraising activities and outreach.

Furthermore, determining financial needs helps prioritize operational activities and expenses, effectively allocate resources, and increase the viability and sustainability of a business in the long run.

Having learned to determine financial needs, let’s head straight to setting financial goals.

2. Define Your Financial Goals

Setting realistic financial goals is fundamental in preparing an effective financial plan. So, it would help to outline your long-term strategies and goals at the beginning of your financial planning process.

Let’s understand it this way—if you are a SaaS startup pursuing VC financing rounds, you may ask investors about what matters to them the most and prepare your financial plan accordingly.

However, a coffee shop owner seeking a business loan may need to create a plan that appeals to banks, not investors. At the same time, an internal financial plan designed to offer financial direction and resource allocation may not be the same as previous examples, seeing its different use case.

Feeling overwhelmed? Just define your financial goals—you’ll be fine.

You can start by identifying your business KPIs (key performance indicators); it would be an ideal starting point.

3. Choose the Right Financial Planning Tool

Let’s face it—preparing a financial plan using Excel is no joke. One would only use this method if they had all the time in the world.

Having the right financial planning software will simplify and speed up the process and guide you through creating accurate financial forecasts.

Many financial planning software and tools claim to be the ideal solution, but it’s you who will identify and choose a tool that is best for your financial planning needs.

how to make a financial plan for a small business pdf

Create a Financial Plan with Upmetrics in no time

Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

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4. Make Assumptions Before Projecting Financials

Once you have a financial planning tool, you can move forward to the next step— making financial assumptions for your plan based on your company’s current performance and past financial records.

You’re just making predictions about your company’s financial future, so there’s no need to overthink or complicate the process.

You can gather your business’ historical financial data, market trends, and other relevant documents to help create a base for accurate financial projections.

After you have developed rough assumptions and a good understanding of your business finances, you can move forward to the next step—projecting financials.

5. Prepare Realistic Financial Projections

It’s a no-brainer—financial forecasting is the most critical yet challenging aspect of financial planning. However, it’s effortless if you’re using a financial planning software.

Upmetrics’ forecasting feature can help you project financials for up to 7 years. However, new startups usually consider planning for the next five years. Although it can be contradictory considering your financial goals and investor specifications.

Following are the two key aspects of your financial projections:

Revenue Projections

In simple terms, revenue projections help investors determine how much revenue your business plans to generate in years to come.

It generally involves conducting market research, determining pricing strategy , and cash flow analysis—which we’ve already discussed in the previous steps.

The following are the key components of an accurate revenue projection report:

  • Market analysis
  • Sales forecast
  • Pricing strategy
  • Growth assumptions
  • Seasonal variations

This is a critical section for pre-revenue startups, so ensure your projections accurately align with your startup’s financial model and revenue goals.

Expense Projections

Both revenue and expense projections are correlated to each other. As revenue forecasts projected revenue assumptions, expense projections will estimate expenses associated with operating your business.

Accurately estimating your expenses will help in effective cash flow analysis and proper resource allocation.

These are the most common costs to consider while projecting expenses:

  • Fixed costs
  • Variable costs
  • Employee costs or payroll expenses
  • Operational expenses
  • Marketing and advertising expenses
  • Emergency fund

Remember, realistic assumptions, thorough research, and a clear understanding of your market are the key to reliable financial projections.

6. Consider “What if” Scenarios

After you project your financials, it’s time to test your assumptions with what-if analysis, also known as sensitivity analysis.

Using what-if analysis with different scenarios while projecting your financials will increase transparency and help investors better understand your startup’s future with its best, expected, and worst-case scenarios.

Exploring “what-if” scenarios is the best way to better understand the potential risks and opportunities involved in business operations. This proactive exercise will help you make strategic decisions and necessary adjustments to your financial plan.

7. Build a Visual Report

If you’ve closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using “what-if” scenarios.

Now, we’ll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

Don’t worry—it’s no extra effort. You’ve already made a visual report while creating your financial plan and forecasting financials.

Check the dashboard to see the visual presentation of your projections and reports, and use the necessary financial data, diagrams, and graphs in the final draft of your financial plan.

Here’s what Upmetrics’ dashboard looks like:

Upmetrics financial projections visual report

8. Monitor and Adjust Your Financial Plan

Even though it’s not a primary step in creating a good financial plan, it’s quite essential to regularly monitor and adjust your financial plan to ensure the assumptions you made are still relevant, and you are heading in the right direction.

There are multiple ways to monitor your financial plan.

For instance, you can compare your assumptions with actual results to ensure accurate projections based on metrics like new customers acquired and acquisition costs, net profit, and gross margin.

Consider making necessary adjustments if your assumptions are not resonating with actual numbers.

Also, keep an eye on whether the changes you’ve identified are having the desired effect by monitoring their implementation.

And that was the last step in our financial planning guide. However, it’s not the end. Have a look at this financial plan example.

Startup Financial Plan Example

Having learned about financial planning, let’s quickly discuss a coffee shop startup financial plan example prepared using Upmetrics.

Important Assumptions

  • The sales forecast is conservative and assumes a 5% increase in Year 2 and a 10% in Year 3.
  • The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wanes in slower months.
  • The analysis assumes the owner will not withdraw any salary till the 3rd year; at any time it is assumed that the owner’s withdrawal is available at his discretion.
  • Sales are cash basis – nonaccrual accounting
  • Moderate ramp- up in staff over the 5 years forecast
  • Barista salary in the forecast is $36,000 in 2023.
  • In general, most cafes have an 85% gross profit margin
  • In general, most cafes have a 3% net profit margin

Projected Balance Sheet

Projected Balance Sheet

Projected Cash-Flow Statement

Cash-Flow Statement

Projected Profit & Loss Statement

Profit & Loss Statement

Break Even Analysis

Break Even Analysis

Start Preparing Your Financial Plan

We covered everything about financial planning in this guide, didn’t we? Although it doesn’t fulfill our objective to the fullest—we want you to finish your financial plan.

Sounds like a tough job? We have an easy way out for you—Upmetrics’ financial forecasting feature. Simply enter your financial assumptions, and let it do the rest.

So what are you waiting for? Try Upmetrics and create your financial plan in a snap.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.


Frequently Asked Questions

How often should i update my financial projections.

Well, there is no particular rule about it. However, reviewing and updating your financial plan once a year is considered an ideal practice as it ensures that the financial aspirations you started and the projections you made are still relevant.

How do I estimate startup costs accurately?

You can estimate your startup costs by identifying and factoring various one-time, recurring, and hidden expenses. However, using a financial forecasting tool like Upmetrics will ensure accurate costs while speeding up the process.

What financial ratios should startups pay attention to?

Here’s a list of financial ratios every startup owner should keep an eye on:

  • Net profit margin
  • Current ratio
  • Quick ratio
  • Working capital
  • Return on equity
  • Debt-to-equity ratio
  • Return on assets
  • Debt-to-asset ratio

What are the 3 different scenarios in scenario analysis?

As discussed earlier, Scenario analysis is the process of ascertaining and analyzing possible events that can occur in the future. Startups or businesses often consider analyzing these three scenarios:

  • base-case (expected) scenario
  • Worst-case scenario
  • best case scenario.

About the Author

how to make a financial plan for a small business pdf

Ajay is a SaaS writer and personal finance blogger who has been active in the space for over three years, writing about startups, business planning, budgeting, credit cards, and other topics related to personal finance. If not writing, he’s probably having a power nap. Read more

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  • Creating a Small Business Financial Plan

how to make a financial plan for a small business pdf

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on September 02, 2023

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Table of contents, financial plan overview.

A financial plan is a comprehensive document that charts a business's monetary objectives and the strategies to achieve them. It encapsulates everything from budgeting and forecasting to investments and resource allocation.

For small businesses, a solid financial plan provides direction, helping them navigate economic challenges, capitalize on opportunities, and ensure sustainable growth.

The strength of a financial plan lies in its ability to offer a clear roadmap for businesses.

Especially for small businesses that may not have a vast reserve of resources, prioritizing financial goals and understanding where every dollar goes can be the difference between growth and stagnation.

It lends clarity, ensures informed decision-making, and sets the stage for profitability and success.

Understanding the Basics of Financial Planning for Small Businesses

Role of financial planning in business success.

Financial planning is the backbone of any successful business endeavor. It serves as a compass, guiding businesses toward profitability, stability, and growth.

With proper financial planning, businesses can anticipate potential cash shortfalls, make informed investment decisions, and ensure they have the capital needed to seize new opportunities.

For small businesses, in particular, tight financial planning can mean the difference between thriving and shuttering. Given the limited resources, it's vital to maximize every dollar and anticipate financial challenges.

Through diligent planning, small businesses can position themselves competitively, adapt to market changes, and drive consistent growth.

Core Components of a Financial Plan for Small Businesses

Every financial plan comprises several core components that, together, provide a holistic view of a business's financial health and direction. These include setting clear objectives, estimating costs , preparing financial statements , and considering sources of financing.

Each component plays a pivotal role in ensuring a thorough and actionable financial strategy .

For small businesses, these components often need a more granular approach. Given the scale of operations, even minor financial missteps can have significant repercussions.

As such, it's essential to tailor each component, ensuring they address specific challenges and opportunities that small businesses face, from initial startup costs to revenue forecasting and budgetary constraints.

Setting Clear Small Business Financial Objectives

Identifying business's short-term and long-term financial goals.

Every business venture starts with a vision. Translating this vision into actionable financial goals is the essence of effective planning.

Short-term goals could range from securing initial funding and achieving a set monthly revenue to covering startup costs. These targets, usually spanning a year or less, set the immediate direction for the business.

On the other hand, long-term financial goals delve into the broader horizon. They might encompass aspirations like expanding to new locations, diversifying product lines, or achieving a specific market share within a decade.

By segmenting goals into short-term and long-term, businesses can craft a step-by-step strategy, making the larger vision more attainable and manageable.

Understanding the Difference Between Profitability and Cash Flow

Profitability and cash flow, while closely linked, are distinct concepts in the financial realm. Profitability pertains to the ability of a business to generate a surplus after deducting all expenses.

It's a metric of success and indicates the viability of a business model . Simply put, it answers whether a business is making more than it spends.

In contrast, cash flow represents the inflow and outflow of cash within a business. A company might be profitable on paper yet struggle with cash flow if, for instance, clients delay payments or unexpected expenses arise.

For small businesses, maintaining positive cash flow is paramount. It ensures that they can cover operational costs, pay employees, and reinvest in growth, even if they're awaiting payments or navigating financial hiccups.

Estimating Small Business Startup Costs (for New Businesses)

Fixed vs variable costs.

When embarking on a new business venture, understanding costs is paramount. Fixed costs remain consistent regardless of production levels. They include expenses like rent, salaries, and insurance . These are predictable outlays that don't fluctuate with business performance.

Variable costs , conversely, change in direct proportion to production or business activity. Think of costs associated with materials for manufacturing or commission for sales .

For a startup, delineating between fixed and variable costs aids in crafting a more dynamic budget, allowing for adaptability as the business scales and evolves.

One-Time Expenditures vs Ongoing Expenses

Startups often grapple with numerous upfront costs. From purchasing equipment and setting up a workspace to initial marketing campaigns, these one-time expenditures lay the foundation for business operations.

They differ from ongoing expenses like utility bills, raw materials, or employee wages that recur monthly or annually.

For a small business owner, distinguishing between these costs is critical. One-time expenditures often demand a larger chunk of initial capital, while ongoing expenses shape the monthly and annual budget.

By categorizing them separately, businesses can strategize funding needs more effectively, ensuring they're equipped to meet both immediate and recurrent financial obligations.

Funding Sources for Small Businesses

Personal savings.

This is often the most straightforward way to fund a startup. Entrepreneurs tap into their personal savings accounts to jumpstart their business.

While this method has the benefit of not incurring debt or diluting company ownership, it intertwines the individual's personal financial security with the business's fate.

The entrepreneur must be prepared for potential losses, and there's the evident psychological strain of putting one's hard-earned money on the line.

Loans can be sourced from various institutions, from traditional banks to credit unions . They offer a substantial sum of money that can be paid back over time, usually with interest .

The main advantage of taking a loan is that the entrepreneur retains full ownership and control of the business.

However, there's the obligation of monthly repayments, which can strain a business's cash flow, especially in its early days. Additionally, securing a loan often requires collateral and a sound credit history.

Investors, including angel investors and venture capitalists , offer capital in exchange for equity or a stake in the company.

Angel investors are typically high-net-worth individuals who provide funding in the initial stages, while venture capitalists come in when there's proven business potential, often injecting larger sums. The advantage is substantial funding without the immediate pressure of repayments.

However, in exchange for their investment, they often seek a say in business decisions, which might mean compromising on some aspects of the original business vision.

Grants are essentially 'free money' often provided by government programs, non-profit organizations, or corporations to promote innovation and support businesses in specific sectors.

The primary advantage of grants is that they don't need to be repaid, nor do they dilute company ownership. However, they can be highly competitive and might come with stipulations on how the funds should be used.

Moreover, the application process can be lengthy and requires showcasing the business's potential or alignment with the specific goals or missions of the granting institution.

Funding Sources for Small Businesses

Preparing Key Financial Statements for Small Businesses

Income statement (profit & loss).

An Income Statement , often termed as the Profit & Loss statement , showcases a business's financial performance over a specific time frame. It details revenues , expenses, and ultimately, profits or losses.

By analyzing this statement, business owners can pinpoint revenue drivers, identify exorbitant costs, and understand the net result of their operations.

For small businesses, this document is instrumental in making informed decisions. For instance, if a certain product line is consistently unprofitable, it might be prudent to discontinue it. Conversely, if another segment is thriving, it might warrant further investment.

The Income Statement, thus, serves as a financial mirror, reflecting the outcomes of business strategies and decisions.

Balance Sheet

The Balance Sheet offers a snapshot of a company's assets , liabilities , and equity at a specific point in time.

Assets include everything the business owns, from physical items like equipment to intangible assets like patents .

Liabilities, on the other hand, encompass what the company owes, be it bank loans or unpaid bills.

Equity represents the owner's stake in the business, calculated as assets minus liabilities.

This statement is crucial for small businesses as it offers insights into their financial health. A robust asset base, minimal liabilities, and growing equity signify a thriving enterprise.

In contrast, mounting liabilities or dwindling assets could be red flags, signaling the need for intervention and strategy recalibration.

Cash Flow Statement

While the Income Statement reveals profitability, the Cash Flow Statement tracks the actual movement of money.

It categorizes cash flows into operating (day-to-day business), investing (buying/selling assets), and financing (loans or equity transactions) activities. This statement unveils the liquidity of a business, indicating whether it has sufficient cash to meet immediate obligations.

For small businesses, maintaining positive cash flow is often more vital than showcasing profitability.

After all, a business might be profitable on paper yet struggle if clients delay payments or unforeseen expenses emerge.

By regularly reviewing the Cash Flow Statement, small business owners can anticipate cash crunches and strategize accordingly, ensuring seamless operations irrespective of revenue cycles.

Preparing Key Financial Statements for Small Businesses

Small Business Budgeting and Expense Management

Importance of budgeting for a small business.

Budgeting is the financial blueprint for any business, detailing anticipated revenues and expenses for a forthcoming period. It's a proactive approach, enabling businesses to allocate resources efficiently, plan for investments, and prepare for potential financial challenges.

For small businesses, a meticulous budget is often the linchpin of stability, ensuring they operate within their means and avoid financial pitfalls.

Having a well-defined budget also fosters discipline. It curtails frivolous spending, emphasizes cost-efficiency, and sets clear financial boundaries.

For small businesses, where every dollar counts, a stringent budget is the gateway to financial prudence, ensuring that funds are utilized judiciously, fostering growth, and minimizing wastage.

Strategies for Reducing Costs and Optimizing Expenses

Bulk purchasing.

When businesses buy supplies in large quantities, they often benefit from discounts due to economies of scale . This can significantly reduce per-unit costs.

However, while bulk purchasing leads to immediate savings, businesses must ensure they have adequate storage and that the products won't expire or become obsolete before they're used.

Renegotiating Vendor Contracts

Regularly reviewing and renegotiating contracts with suppliers or service providers can lead to better terms and lower costs. This might involve exploring volume discounts, longer payment terms, or even bartering services.

Building strong relationships with vendors often paves the way for such negotiations.

Adopting Energy-Saving Measures

Simple changes, like switching to LED lighting or investing in energy-efficient appliances, can lead to long-term savings in utility bills. Moreover, energy conservation not only reduces costs but also minimizes the environmental footprint, which can enhance the business's reputation.

Embracing Technology

Modern software and technology can streamline business processes. Automation tools can handle repetitive tasks, reducing labor costs.

Meanwhile, data analytics tools can provide insights into customer preferences and behavior, ensuring that marketing budgets are used effectively and target the right audience.

Streamlining Operations

Regularly reviewing and refining business processes can eliminate redundancies and improve efficiency. This might mean merging roles, cutting down on unnecessary meetings, or simplifying supply chains. A leaner operation often translates to reduced expenses.

Outsourcing Non-core Tasks

Instead of maintaining an in-house team for every function, businesses can outsource tasks that aren't central to their operations.

For instance, functions like accounting , IT support, or digital marketing can be outsourced to specialized agencies, often leading to cost savings and access to expert skills.

Cultivating a Culture of Frugality

Encouraging employees to adopt a cost-conscious mindset can lead to collective savings. This can be fostered through incentives, regular training, or even simple practices like recycling and reusing office supplies.

When everyone in the organization is attuned to the importance of cost savings, the cumulative effect can be substantial.

Strategies for Reducing Costs and Optimizing Expenses in a Small Business

Forecasting Small Business Revenue and Cash Flow

Techniques for predicting future sales in a small business, past sales data analysis.

Historical sales data is a foundational element in any forecasting effort. By reviewing previous sales figures, businesses can identify patterns, understand seasonal fluctuations, and recognize the effects of past initiatives.

This information offers a baseline upon which to build future projections, accounting for known recurring variables in the business cycle .

Market Research

Understanding the larger market dynamics is crucial for accurate forecasting. This involves tracking industry trends, monitoring shifts in consumer behavior, and being aware of potential market disruptions.

For instance, a sudden technological advancement can change consumer preferences or regulatory changes might impact an industry.

Local Trend Analysis

For small businesses, localized insights can be especially impactful. Observing local competitors, understanding regional consumer preferences, or noting shifts in the local economy can offer precise data points.

These granular details, when integrated into a larger forecasting model, can enhance prediction accuracy.

Customer Feedback

Direct feedback from customers is an invaluable source of insights. Surveys, focus groups, or even informal chats can reveal customer sentiments, preferences, and potential future purchasing behavior.

For instance, if a majority of loyal customers express interest in a new product or service, it can be indicative of future sales potential.

Moving Averages

This technique involves analyzing a series of data points (like monthly sales) by creating averages from different subsets of the full data set.

For yearly forecasting, a 12-month moving average can be used to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Regression Analysis

Regression analysis is a statistical tool used to identify relationships between variables. In sales forecasting, it can help understand how different factors (like marketing spend, seasonal variations, or competitor actions) relate to sales figures.

Once these relationships are understood, businesses can predict future sales based on planned actions or expected external events.

Techniques for Predicting Future Sales in a Small Business

Understanding the Cash Cycle of Business

The cash cycle encompasses the time it takes for a business to convert resource investments, often in the form of inventory, back into cash.

This involves the processes of purchasing inventory, selling it, and subsequently collecting payment. A shorter cycle implies quicker cash turnarounds, which are vital for liquidity.

For small businesses, a firm grasp of the cash cycle can aid in managing cash flow more effectively.

By identifying bottlenecks or delays, businesses can strategize to expedite processes. This might involve renegotiating payment terms with suppliers, offering discounts for prompt customer payments, or optimizing inventory levels to prevent overstocking.

Ultimately, understanding and optimizing the cash cycle ensures that a business remains liquid and agile.

Preparing for Seasonality and Unexpected Changes

Seasonality affects many businesses, from the ice cream vendor witnessing summer surges to the retailer bracing for holiday shopping frenzies.

By analyzing historical data and market trends, businesses can prepare for these cyclical shifts, ensuring they stock up, staff appropriately, and market effectively.

Small businesses, often operating on tighter margins , need to be especially vigilant. Beyond seasonality, they must also brace for unexpected changes – a local construction project obstructing store access, a sudden competitor emergence, or unforeseen regulatory changes.

Building a financial buffer, diversifying product or service lines, and maintaining flexible operational strategies can equip small businesses to weather these unforeseen challenges with resilience.

Securing Small Business Financing and Capital

Role of debt and equity financing.

When businesses seek external funding, they often grapple with the debt vs. equity conundrum. Debt financing involves borrowing money, typically via loans. While it doesn't dilute ownership, it necessitates regular interest payments, potentially impacting cash flow.

Equity financing, on the other hand, entails selling a stake in the business to investors. It might not demand regular repayments, but it dilutes ownership and might influence business decisions.

Small businesses must weigh these options carefully. While loans offer a structured repayment plan and retained control, they might strain finances if the business hits a rough patch.

Equity financing, although relinquishing some control, might bring aboard strategic partners, offering expertise and networks in addition to funds.

The optimal choice hinges on the business's financial health, growth aspirations, and the founder's comfort with sharing control.

Choosing Between Different Types of Loans

A staple in the lending arena, term loans offer businesses a fixed amount of capital that is paid back over a specified period with interest. They're often used for significant one-time expenses, such as purchasing machinery, real estate , or even business expansion.

With predictable monthly payments, businesses can plan their budgets accordingly. However, they might require collateral and a robust credit history for approval.

Lines of Credit

Unlike term loans that provide funds in a lump sum, a line of credit grants businesses access to a pool of funds up to a certain limit.

Businesses can draw from this line as needed, only paying interest on the amount they use. This makes it a versatile tool, especially for managing cash flow fluctuations or unexpected expenses. It serves as a financial safety net, ready for use whenever required.

As the name suggests, microloans are smaller loans designed to cater to businesses that might not need substantial amounts of capital. They're particularly beneficial for startups, businesses with limited credit histories, or those in need of a quick, small financial boost.

Since they are of a smaller denomination, the approval process might be more lenient than traditional loans.

Peer-To-Peer Lending

A contemporary twist to the traditional lending model, peer-to-peer (P2P) platforms connect borrowers directly with individual lenders or investor groups.

This direct model often translates to quicker approvals and competitive interest rates as the overheads of traditional banking structures are removed. With technology at its core, P2P lending can offer a more user-friendly, streamlined process.

However, creditworthiness still plays a pivotal role in determining interest rates and loan amounts.

Crowdfunding and Alternative Financing Options

In an increasingly digital age, crowdfunding platforms like Kickstarter or Indiegogo have emerged as viable financing avenues.

These platforms enable businesses to raise small amounts from a large number of people, often in exchange for product discounts, early access, or other perks. This not only secures funds but also validates the business idea and fosters a community of supporters.

Other alternatives include invoice financing, where businesses get an advance on pending invoices, or merchant cash advances tailored for businesses with significant credit card sales.

Each financing mode offers unique advantages and constraints. Small businesses must meticulously evaluate their financial landscape, growth trajectories, and risk appetite to harness the most suitable option.

Small Business Tax Planning and Management

Basic tax obligations for small businesses.

Navigating the maze of taxation can be daunting, especially for small businesses. Yet, understanding and fulfilling tax obligations is crucial.

Depending on the business structure—whether sole proprietorship , partnership , LLC , or corporation—different tax rules apply. For instance, while corporations are taxed on their earnings, sole proprietors report business income and expenses on their personal tax returns.

In addition to income taxes, small businesses may also be responsible for employment taxes if they have employees. This covers Social Security , Medicare , federal unemployment, and sometimes state-specific taxes.

There might also be sales taxes, property taxes, or special state-specific levies to consider.

Consistently maintaining accurate financial records, being aware of filing deadlines, and setting aside funds for tax obligations are essential practices to avoid penalties and ensure compliance.

Advantages of Tax Planning and Potential Deductions

Tax planning is the strategic approach to minimizing tax liability through the best use of available allowances, deductions, exclusions, and breaks.

For small businesses, effective tax planning can lead to significant savings.

This might involve strategies like deferring income to a later tax year, choosing the optimal time to purchase equipment, or taking advantage of specific credits available to businesses in certain sectors or regions.

Several potential deductions can reduce taxable income for small businesses. These include expenses like rent, utilities, business travel, employee wages, and even certain meals.

By keeping abreast of tax law changes and actively seeking out eligible deductions, small businesses can optimize their financial landscape, ensuring they're not paying more in taxes than necessary.

Importance of Hiring a Tax Professional or Accountant

While it's feasible for small business owners to manage their taxes, the intricate nuances of tax laws make it beneficial to consult professionals.

An experienced accountant or tax consultant can not only ensure compliance but can proactively recommend strategies to reduce tax liability.

They can guide businesses on issues like whether to classify someone as an employee or a contractor, how to structure the business for optimal taxation, or when to make certain capital investments.

Beyond just annual tax filing, these professionals offer year-round counsel, helping businesses maintain clean financial records, stay updated on tax law changes, and plan for future financial moves.

The investment in professional advice often pays dividends , saving businesses from costly mistakes, penalties, or missed financial opportunities.

Regularly Reviewing and Adjusting the Small Business Financial Plan

Setting checkpoints and milestones.

Like any strategic blueprint, a financial plan isn't static. It serves as a guiding framework but should be flexible enough to adapt to evolving business realities.

Setting regular checkpoints— quarterly , half-yearly, or annually—can help businesses assess whether they're on track to meet their financial objectives.

Milestones, such as reaching a specific sales target, launching a new product, or expanding into a new market, offer tangible markers of progress. Celebrating these victories can bolster morale, while any shortfalls can serve as lessons, prompting strategy tweaks. F

or small businesses, where agility is an asset, regularly revisiting the financial plan ensures that the business remains aligned with its overarching financial goals while being responsive to the dynamic marketplace.

Using Financial Ratios to Monitor Business Health

Financial ratios offer a distilled snapshot of a business's health. Ratios like the current ratio ( current assets divided by current liabilities ) can shed light on liquidity, indicating whether a business can meet short-term obligations.

The debt-to-equity ratio , contrasting borrowed funds with owner's equity, offers insights into the business's leverage and potential financial risk.

Profit margin , depicting profitability relative to sales, can highlight operational efficiency. By consistently monitoring these and other pertinent ratios, small businesses can glean actionable insights, understanding their financial strengths and areas needing attention.

In a realm where early intervention can stave off major financial setbacks, these ratios serve as vital diagnostic tools, guiding informed decision-making.

Pivoting Strategies Based on Financial Performance

In the ever-evolving world of business, flexibility is paramount. If financial reviews indicate that certain strategies aren't yielding anticipated results, it might be time to pivot.

This could involve tweaking product offerings, revising pricing strategies, targeting a different customer segment, or even overhauling the business model.

For small businesses, the ability to pivot can be a lifeline. It allows them to respond swiftly to market changes, customer feedback, or internal challenges.

A robust financial plan, while offering direction, should also be pliable, accommodating shifts in strategy based on real-world performance. After all, in the business arena, adaptability often spells the difference between stagnation and growth.

Creating a Small Business Financial Plan

Bottom Line

Financial foresight is integral for the stability and growth of small businesses. Effective revenue and cash flow forecasting, anchored by historical sales data and enhanced by market research, local trends, and customer feedback, ensures businesses are prepared for future demands.

With the unpredictability of the business environment, understanding the cash cycle and preparing for unforeseen challenges is essential.

As businesses contemplate external financing, the decision between debt and equity and the myriad of loan types, should be made judiciously, keeping in mind the business's health, growth aspirations, and risk appetite.

Furthermore, diligent tax planning, with professional guidance, can lead to significant financial benefits. Regular reviews using financial ratios allow businesses to gauge their performance, adapt strategies, and pivot when necessary.

Ultimately, the agility to adapt, guided by a well-structured financial plan, is pivotal for businesses to thrive in a dynamic marketplace.

Creating a Small Business Financial Plan FAQs

What is the importance of a financial plan for small businesses.

A financial plan offers a structured roadmap, guiding businesses in making informed decisions, ensuring growth, and navigating financial challenges.

How do forecasting revenue and understanding cash cycles aid in financial planning?

Forecasting provides insights into expected income, aiding in budget allocation, while understanding cash cycles ensures effective liquidity management.

What are the core components of a financial plan for small businesses?

Core components include setting objectives, estimating startup costs, preparing financial statements, budgeting, forecasting, securing financing, and tax management.

Why is tax planning vital for small businesses?

Tax planning ensures compliance, optimizes tax liabilities through available deductions, and helps businesses save money and avoid penalties.

How often should a small business review its financial plan?

Regular reviews, ideally quarterly or half-yearly, ensure alignment with business goals and allow for strategy adjustments based on real-world performance.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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How to Write a Small Business Financial Plan

Stairs leading up to a dollar sign. Represents creating a financial plan to achieve profitability.

Noah Parsons

4 min. read

Updated April 22, 2024

Creating a financial plan is often the most intimidating part of writing a business plan.

It’s also one of the most vital. Businesses with well-structured and accurate financial statements are more prepared to pitch to investors, receive funding, and achieve long-term success.

Thankfully, you don’t need an accounting degree to successfully create your budget and forecasts.

Here is everything you need to include in your financial plan, along with optional performance metrics, funding specifics, mistakes to avoid , and free templates.

  • Key components of a financial plan

A sound financial plan is made up of six key components that help you easily track and forecast your business financials. They include your:

Sales forecast

What do you expect to sell in a given period? Segment and organize your sales projections with a personalized sales forecast based on your business type.

Subscription sales forecast

While not too different from traditional sales forecasts—there are a few specific terms and calculations you’ll need to know when forecasting sales for a subscription-based business.

Expense budget

Create, review, and revise your expense budget to keep your business on track and more easily predict future expenses.

How to forecast personnel costs

How much do your current, and future, employees’ pay, taxes, and benefits cost your business? Find out by forecasting your personnel costs.

Profit and loss forecast

Track how you make money and how much you spend by listing all of your revenue streams and expenses in your profit and loss statement.

Cash flow forecast

Manage and create projections for the inflow and outflow of cash by building a cash flow statement and forecast.

Balance sheet

Need a snapshot of your business’s financial position? Keep an eye on your assets, liabilities, and equity within the balance sheet.

What to include if you plan to pursue funding

Do you plan to pursue any form of funding or financing? If the answer is yes, then there are a few additional pieces of information that you’ll need to include as part of your financial plan.

Highlight any risks and assumptions

Every entrepreneur takes risks with the biggest being assumptions and guesses about the future. Just be sure to track and address these unknowns in your plan early on.

Plan your exit strategy

Investors will want to know your long-term plans as a business owner. While you don’t need to have all the details, it’s worth taking the time to think through how you eventually plan to leave your business.

  • Financial ratios and metrics

With your financial statements and forecasts in place, you have all the numbers needed to calculate insightful financial ratios.

While including these metrics in your plan is entirely optional, having them easily accessible can be valuable for tracking your performance and overall financial situation.

Key financial terms you should know

It’s not hard. Anybody who can run a business can understand these key financial terms. And every business owner and entrepreneur should know them.

Common business ratios

Unsure of which business ratios you should be using? Check out this list of key financial ratios that bankers, financial analysts, and investors will want to see.

Break-even analysis

Do you want to know when you’ll become profitable? Find out how much you need to sell to offset your production costs by conducting a break-even analysis.

How to calculate ROI

How much could a business decision be worth? Evaluate the efficiency or profitability by calculating the potential return on investment (ROI).

  • How to improve your financial plan

Your financial statements are the core part of your business plan that you’ll revisit most often. Instead of worrying about getting it perfect the first time, check out the following resources to learn how to improve your projections over time.

Common mistakes with business forecasts

I was glad to be asked about common mistakes with startup financial projections. I read about 100 business plans per year, and I have this list of mistakes.

How to improve your financial projections

Learn how to improve your business financial projections by following these five basic guidelines.

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Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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6 Elements of a Successful Financial Plan for a Small Business

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Table of Contents

Many small businesses lack a full financial plan, even though evidence shows that it is essential to the long-term success and growth of any business. 

For example, a study in the New England Journal of Entrepreneurship found that entrepreneurs with a business plan are more successful than those without one. If you’re not sure how to get started, read on to learn the six key elements of a successful small business financial plan.

What is a business financial plan, and why is it important? 

A business financial plan is an overview of a business’s financial situation and a forward-looking projection for growth. A business financial plan typically has six parts: sales forecasting, expense outlay, a statement of financial position, a cash flow projection, a break-even analysis and an operations plan.

A good financial plan helps you manage cash flow and accounts for months when revenue might be lower than expected. It also helps you budget for daily and monthly expenses and plan for taxes each year.

Importantly, a financial plan helps you focus on the long-term growth of your business. That way, you don’t get so caught up in the day-to-day activities that you lose sight of your goals. Focusing on the long-term vision helps you prioritize your financial resources. 

The 6 components of a successful financial plan for business

1. sales forecasting.

You should have an estimate of your sales revenue for every month, quarter and year. Identifying any patterns in your sales cycles helps you better understand your business, and this knowledge is invaluable as you plan marketing initiatives and growth strategies . 

For instance, a seasonal business can aim to improve sales in the off-season to eventually become a year-round venture. Another business might become better prepared by understanding how upticks and downturns in business relate to factors such as the weather or the economy.

Sales forecasting is also the foundation for setting company growth goals. For instance, you could aim to improve your sales by 10 percent over each previous period.

2. Expense outlay

A full expense plan includes regular expenses, expected future expenses and associated expenses. Regular expenses are the current ongoing costs of your business, including operational costs such as rent, utilities and payroll. 

Regular expenses relate to standard business activities that occur each year, such as conference attendance, advertising and marketing, and the office holiday party. It’s a good idea to distinguish essential expenses from expenses that can be reduced or eliminated if needed.

Expected future expenses are known future costs, such as tax rate increases, minimum wage increases or maintenance needs. Generally, a part of the budget should also be allocated to unexpected future expenses, such as damage to your business caused by fire, flood or other unexpected disasters. Planning for future expenses ensures your business is financially prepared via budget reduction, increases in sales or financial assistance.

Associated expenses are the estimated costs of various initiatives, such as acquiring and training new hires, opening a new store or expanding delivery to a new territory. An accurate estimate of associated expenses helps you properly manage growth and prevents your business from exceeding your cost capabilities. 

As with expected future expenses, understanding how much capital is required to accomplish various growth goals helps you make the right decision about financing options.

3. Statement of financial position (assets and liabilities)

Assets and liabilities are the foundation of your business’s balance sheet and the primary determinants of your business’s net worth. Tracking both allows you to maximize your business’s potential value. 

Small businesses frequently undervalue their assets (such as machinery, property or inventory) and fail to properly account for outstanding bills. Your balance sheet offers a more complete view of your business’s health than a profit-and-loss statement or a cash flow report. 

A profit-and-loss statement shows how the business performed over a specific time period, while a balance sheet shows the financial position of the business on any given day.

4. Cash flow projection

You should be able to predict your cash flow on a monthly, quarterly and annual basis. Projecting cash flow for the full year allows you to get ahead of any financial struggles or challenges. 

It can also help you identify a cash flow problem before it hurts your business. You can set the most appropriate payment terms, such as how much you charge upfront or how many days after invoicing you expect payment .

A cash flow projection gives you a clear look at how much money is expected to be left at the end of each month so you can plan a possible expansion or other investments. It also helps you budget, such as by spending less one month for the anticipated cash needs of another month.

5. Break-even analysis

A break-even analysis evaluates fixed costs relative to the profit earned by each additional unit you produce and sell. This analysis is essential to understanding your business’s revenue and potential costs versus profits of expansion or growth of your output. 

Having your expenses fully fleshed out, as described above, makes your break-even analysis more accurate and useful. A break-even analysis is also the best way to determine your pricing.

In addition, a break-even analysis can tell you how many units you need to sell at various prices to cover your costs. You should aim to set a price that gives you a comfortable margin over your expenses while allowing your business to remain competitive.

6. Operations plan

To run your business as efficiently as possible, craft a detailed overview of your operational needs. Understanding what roles are required for you to operate your business at various volumes of output, how much output or work each employee can handle, and the costs of each stage of your supply chain will aid you in making informed decisions for your business’s growth and efficiency.

It’s important to tightly control expenses, such as payroll or supply chain costs, relative to growth. An operations plan can also make it easier to determine if there is room to optimize your operations or supply chain via automation, new technology or superior supply chain vendors.

For this reason, it is imperative for a business owner to conduct due diligence and become knowledgeable about merchant services before acquiring an account. Once the owner signs a contract, it cannot be changed, unless the business owner breaks the contract and acquires a new account with a new merchant services provider. 

Tips on writing a business financial plan

Business owners should create a financial plan annually to ensure they have a clear and accurate picture of their business’s finances and a realistic view for future growth or expansion. A financial plan helps the business’s leaders make informed decisions about purchases, debt, hiring, expense control and overall operations for the year ahead. 

A business financial plan is essential if a business owner is looking to sell their business, attract investors or enter a partnership with another business. Here are some tips for writing a business financial plan.

Review the previous year’s plan.

It’s a good idea to compare the previous year’s plan against actual performance and finances to see how accurate the previous plan and forecast were. That way, you can address any discrepancies or overlooked elements in next year’s plan.

Collaborate with other departments.

A business owner or other individual charged with creating the business financial plan should collaborate with the finance department, human resources department, sales team , operations leader, and those in charge of machinery, vehicles or other significant business tools. 

Each division should provide the necessary data about projections, value and expenses. All of these elements come together to create a comprehensive financial picture of the business.

Use available resources.

The Small Business Administration (SBA) and SCORE, the SBA’s nonprofit partner, are two excellent resources for learning about financial plans. Both can teach you the elements of a comprehensive plan and how best to work with the different departments in your business to collect the necessary information. Many websites, including business.com , and service providers, such as Intuit, offer advice on this matter. 

If you have questions or encounter challenges while creating your business financial plan, seek advice from your accountant or other small business owners in your network. Your city or state has a small business office that you can contact for help.

Business financial plan templates

Many business organizations offer free information that small business owners can use to create their financial plan. For example, the SBA’s Learning Platform offers a course on how to create a business plan. It also offers worksheets and templates to help you get started. You can seek additional help and more personalized service from your local office.

SCORE is the largest volunteer network of business mentors. It began as a group of retired executives (SCORE stands for “Service Corps of Retired Executives”) but has expanded to include business owners and executives from many industries. Advice is free and available online, and there are SBA district offices in every U.S. state. In addition to participating in group or at-home learning, you can be paired with a mentor for individualized help. 

SCORE offers templates and tips for creating a small business financial plan. SCORE is an excellent resource because it addresses different levels of experience and offers individualized help.

Other templates can be found in Microsoft Office’s template library, QuickBooks’ online resources, Shopify’s blog and other places. You can also ask your accountant for guidance, since many accountants provide financial planning services in addition to their usual tax services.

Diana Wertz contributed to the writing and research in this article.


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how to make a financial plan for a small business pdf

How to Create a Financial Plan for Your Business

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Home » Blog » How to Create a Financial Plan for Your Business

A wise old Certified Public Accountant gave me some priceless advice when I began my entrepreneurial journey.

“If the math doesn’t work, neither will your business.” 

Upon seeing my blank expression, he explained it a little further.

“A successful business earns more than it spends, and you ensure that happens (within reason) by creating a financial plan that controls every dollar you make.”

How so? I asked.

“Because your financial plan empowers you to control your cash flow, prepare for uncertainties, and take advantage of future opportunities.”

That’s when I knew I needed one.

If so, my step-by-step guide explains how to create a business financial plan that reflects your goals and controls every dollar you make.

What is a financial plan?

At its most basic level, a business financial plan is a document that shows you what money flows in and out of your business, how you earn it, and where you spend it. 

Similar to businesses, no 2 financial plans are the same.

However, a solid financial plan contains several components, including an income statement, cash flow statement, personnel plan, balance sheet, financial projections, and break-even analysis. 

Together, these enable you to control your budget, highlight potential future risks, set goals, calculate your funding requirements, and implement strategies to achieve them. 

While there’s no such thing as a sure thing in life, your financial plan brings your future into your present so that you can control it now.

Why is a financial plan important for a small business?

As you know (or will when you start your business ), entrepreneurs work long hours and make many decisions to ensure their business is on track. A business financial plan helps remove uncertainty from those decisions, replacing it with figures you can rely on and preparing you to take full advantage of investment opportunities when they arise. 

Here’s what Warren Buffet says about opportunities:

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”

Your financial plan ensures you’ve got a bucket!

We also use a financial plan to control our cash flow, forecast our future financial business performance (including our income, expenses, and profitability), and stay within budget. 

Together, these help us maximize our assets, confidently navigate any problems during our entrepreneurial journey, and convince investors to believe in our vision. 

What is the difference between a business financial plan and a personal financial plan?

While most financial plans include the same information, some essential differences exist between business and personal plans because your goals likely differ from those of your SMB.

For example, an individual’s financial plan might include retirement, investment strategies, a minimum annual income to reduce tax liabilities, and securing an estate for their children.

In contrast, a business’s financial plan might focus on hiring additional staff, increasing inventory, bringing new products online, expanding into other markets, and even a new brick-and-mortar location. 

As you can see, the goals differ from one to the other, as might yours. That’s why a financial plan is as unique as the business it serves; however, some elements are vital for every financial business plan! 

The key components of a business financial plan

We now know that a thorough financial plan is imperative to the success and stability of your small business. 

Here are the components that can help make that happen:

  • Income Statement: Contains information on your revenue, profits, and losses.
  • Cash flow statement: Documents how money flows in and out of your business. 
  • Balance sheet: Shows your business assets and expenses at a specific time.
  • Financial projections: This helps predict your future income and expenses.
  • Personnel plan: Identifies if and when you should hire employees.
  • Break-Even Analysis: Confirms when you’ll make a profit.

Okay, now let’s look at how you use them to create yours:

How to Create a Business Financial Plan

To create your business financial plan, you must first collect financial information relevant to the 6 critical components you’ll use for its structure. 

Budding entrepreneurs who have yet to start their businesses might be wondering, `How do I collect information I haven’t got?` 

Good point!

Here’s where your business plan comes into play because it contains a financial section that includes your startup and running costs , financial projections, and break-even analysis. 

And those are 3 of the critical components in your business financial plan!

1. Income statement

An income statement (also known as a pro forma income or profit-and-loss statement) contains information on revenue, profits, losses, and fixed and variable operating expenses over a specific period, such as monthly, quarterly, or yearly.

It includes 2 columns containing your income and expenses and, at the bottom, your net profit or loss total.

Here’s an example of how it should look:

  • Cost of goods sold (COGS) and operating expenses: These are the direct costs of producing your goods or services and the costs for running your business, such as rent, utilities, wages, insurance, licenses, etc.
  • Revenue streams: Usually direct sales or ongoing subscriptions/
  • Total net profit or loss: Subtract your costs (and taxes) from your total gross profit.
  • Net income: Your total income after you subtract your expenses and taxes.

Next comes your cash flow statement, which might initially look like your income statement, but there are distinct differences.

Your income statement calculates your business’s revenues, expenses, and profits and reflects its financial performance. Your cash flow statement shows where you earn and spend your money, which is essential for staying within budget and paying your bills. 

2. Cash flow statement

Most small businesses need regular cash injections to survive.

But did you know that a lack of cash is the number one reason 82% of small US businesses fail? Source: USChamber.com .

So, it’s crucial to control it using a cash flow statement. 

A cash flow statement for established businesses could include bank statements showing credits (profits) and debits (expenditures). Startups with little cash flow information could include their startup and running costs and any funding sources. 

You can create a cash flow statement using two columns, one for your income and the other for your expenditures. 

And add the name, date, and invoice/receipt number to each transaction to make it easy to follow and correlate with your invoices and receipts. Trust me, your bookkeeper will love you for it!

3. Balance sheet

Your balance sheet is a financial snapshot of your business at a specific moment that lets you view your liabilities, assets, equity, and any up-and-coming extra expenses.

You use a balance sheet to subtract your debts (liabilities) from what you own (assets) to show you your net worth, also known as equity.

Let’s break those down so you know what they involve:


Your liabilities are business debts, such as outstanding inventory fees, utility bills, employee wages or compensation, and unpaid taxes.

These fall into 2 categories: current and fixed. 

  • Your current assets can include your business bank balance, available cash, and outstanding invoices, known as accounts receivable.
  • Your fixed assets include tangible things like your business property, equipment, vehicles, or land.

Note: Some businesses also have intangible assets, such as patents and copyrights.

Your business equity is the value of your assets minus your liabilities, which could also include any stock and share options.

4. Financial projections

A financial projection (also called an income projection) forecasts how much money you think might flow in and out of your business over a set period based on past performances or for startups on their business plan’s market research .

Financial projections can help you in several ways, including:

  • Many small businesses need financial projections to identify and prepare for slow sales because of low seasonal demand or a shift in consumer buying trends.
  • Your financial projections help you understand the cash you need to reach your business goals by estimating their costs.
  • Most new businesses need solid (believable) financial projections to get funding, as they help show you can repay your debts.
  • And to help entrepreneurs running a side hustle know when they can take it full-time .

To create your income projection, estimate your future sales income minus your fixed and variable expenses.

5. Personnel plan

Most businesses need the right people to meet their goals and maintain a healthy cash flow.

You use a personnel plan to determine whether to hire employees and if they should be full-time, part-time, freelancers, or contractors on a need-only basis. 

Your personnel plan also calculates employee costs like wages, benefits, worker’s compensation insurance, and payroll taxes to ensure you only hire when you can afford to.

6. Break-even analysis

Your break-even analysis projects when you’ll recoup your investment and earn more than your spending to run your business.

You calculate your break-even date by dividing your variable and fixed costs by your gross profit margin to get a financial figure your business must make to break even.

Need help to determine what your fixed and variable costs are?

No worries:

  • Your fixed costs include expenses that remain the same regardless of how many products or services you sell. These include your rent, insurance policies, license and permit expenses , accounting fees, and wages.
  • Your variable costs fluctuate relative to your sales or production volume.

The takeaway:

Your break-even analysis tells you the number of products or services you must sell to cover your business and production costs. 

Tips on creating an effective financial plan for your business

Preparation is the key to creating a business financial plan, and you prepare by setting goals, assessing present and future credit needs, estimating every business expense, planning for contingencies, and seeking professional financial advice if required. 

And once your plan is in place, regular monitoring helps ensure your business is on its financial target.

Let’s look at how you do it:

Set your financial goals

Your goals are relative to your business. Some examples include forming an LLC , hiring employees, expanding your product range or services, entering a new marketplace, opening a new branch, or trading abroad.

You must define them (regardless of what they are) because your financial plan aims to help you achieve them.

Consider this proverb when choosing your financial business goals:

“The art is not in making money, but making your money work for you.”

And that’s pretty much the secret to how people get rich!

That’s why now is the time to define your goals and create a strategically driven financial business plan that guides every business decision and ensures you maximize your investments.

Speaking of which!

Know your credit needs 

Your business credit needs are any loans you require when starting, running, or expanding your business.

As most small business owners know, the golden rule in running a small business is to minimize your expenditures because the less money you borrow, the higher your profits and the more accurate your business financial plan will be.

But sometimes, we must borrow to exploit market opportunities , buy equipment, or expand, and knowing your credit needs (and score) can help you get the best deals.

Include those little expenses

No income or expense is too small to consider when running a business that relies on a consistent cash flow.

Benjamin Franklin put it this way:

“Beware of little expenses. A small leak will sink a great ship.” 

The problem many new business owners experience is that it’s easy to account for significant expenses (especially fixed costs), but it’s the small, variable everyday ones that can catch us out and scupper our budget. 

To avoid a sinking feeling, evaluate your monthly fixed and variable expenditures and avoid unnecessary, unbudgeted expenses at all costs.

Monitor your goals

Creating your financial plan is your first step, implementing it the second, and monitoring it the third because that’s how you ensure your strategies are achieving your financial goals. 

To monitor your goals, use those key elements of your business financial plan, including your income and cash flow statement, balance sheet, and financial projections, as they provide an up-to-date assessment.

Regular monitoring also helps you identify potential problems and implement any changes before they harm your business’s financial health. 

Plan for contingencies

Planning for problems relative to your niche, like seasonal fluctuations and new competitors, is standard best business practice. But as recent history has taught us, we must also prepare for the unforeseeable!

You can spot worst-case scenarios (like a falling income) by evaluating your business financial plan’s balance sheet and cash flow statement.

Some ways to plan for contingencies are to have a credit line available and cash reserves that can help keep you afloat should the going get rough. 

Consider hiring help 

Many of the most successful business leaders have a shared secret to their success!

They surround themselves with people who know more than they do about every aspect of their business. 

Steve Jobs explains it perfectly:

“It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”

Fortunately, financial experts are available to help you create your business financial plan.

Consider hiring a financial advisor to inform you of prudent financial decisions and investments, and your bank manager can help assess your creditworthiness while considering any past problems that could affect present loan applications.

Financial planning FAQs

What is a business financial plan.

An effective business financial plan contains your business goals and outlines your strategies.

It’s a GPS that guides your SMB’s financial activities by ensuring you make informed decisions on how and where to invest your resources. 

How do you write a business financial plan?

Your financial plan begins with a strategic plan that contains your business goals and what you’ll need to achieve them.

Next, you must create your financial projections, plan for contingencies, and monitor to assess your actual results against your projections to adjust if required. 

What are the 6 components of a financial plan?

Financial plans are as unique as the business they serve. However, 6 components you must include are:

  • Cash flow statement: Documents how money flows in and out of your business.
  • Personnel plan: Identifies whether you should hire employees.
  • Break-Even Analysis: Confirms when you'll make a profit.

What is the best financial statement for a small business?

Your income statement best assesses your business’s financial performance, containing your profits, losses, and equity.

Your balance sheet and cash flow statement are also crucial for running a profitable business. 

Entrepreneurs need many skills, and one of the most important is financial intelligence because it ensures we keep our fingers on our businesses’ financial pulse.

Learning how to create a business financial plan is a great way to gain that skill.

And when you control your income and expenditures, you take control of your business’s financial destiny. Sweet.

One last thing to remember when creating a business financial plan.

The numbers never lie!

This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.

Terry O'Toole

Terry OToole

Terry is a serial entrepreneur with over 25 years of experience building businesses across multiple industries – construction, real estate, e-commerce, hotelier, and now digital media. When not working, Terry likes to kick back and relax with family, explore Taoism’s mysteries, or savor the taste of fine Italian red wine.

how to make a financial plan for a small business pdf

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How to Write a Business Plan, Step by Step

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Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

What is a business plan?

1. write an executive summary, 2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.



A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

» Need help writing? Learn about the best business plan software .

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description. This should contain basic information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, write a little about the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

how to make a financial plan for a small business pdf

The third part of a business plan is an objective statement. This section spells out what you’d like to accomplish, both in the near term and over the coming years.

If you’re looking for a business loan or outside investment, you can use this section to explain how the financing will help your business grow and how you plan to achieve those growth targets. The key is to provide a clear explanation of the opportunity your business presents to the lender.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch that new product and how much you think sales will increase over the next three years as a result.

» MORE: How to write a successful business plan for a loan

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

Accounting software may be able to generate these reports for you. It may also help you calculate metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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How to Write a Financial Analysis

Know what to include in important section of business plan

Alyssa Gregory is an entrepreneur, writer, and marketer with 20 years of experience in the business world. She is the founder of the Small Business Bonfire, a community for entrepreneurs, and has authored more than 2,500 articles for The Balance and other popular small business websites.

how to make a financial plan for a small business pdf

Financial Analysis of a Business Plan

Assumptions, know the ground rules, use visuals, check your math.

The financial analysis section of a business plan should contain the data for financing your business for the present, what will be needed for future growth, and an estimation of your operating expenses.

The financial analysis section of your business plan may be the most challenging for you to complete on your own, but it also could be the deal-maker or deal-breaker when you are searching for funding.

Because of the structured, in-depth financial data required for this section, you should consult your accountant or other trusted and qualified financial professional before writing this section .

The financial analysis section should be based on estimates for new businesses or recent data for established businesses. It should include these elements:

  • Balance sheet : Your assumed and anticipated business financials, including assets , liabilities, and equity.
  • Cash-flow analysis : An overview of the cash you anticipate will be coming into your business based on sales forecasts, minus the anticipated cash expenses of running the business.
  • Profit-and-loss analysis : Your income statement that subtracts the costs of the business from the earnings over a specific period of time, typically a quarter or a year.
  • Break-even analysis : Demonstrates the point when the cost of doing business is fully covered by sales.
  • Personnel-expense forecast : The expenses of your team, as outlined in a management summary section .

Completing a financial analysis section for a business that hasn't been started yet requires some assumptions. However, these aren't guesses. What you expect from the business needs to be based on detailed research and data.

Go back to the other sections of your business plan and write down any financial assumptions you made while drafting those sections. You then can use those assumptions in your financial analysis section. The most important factor is ensuring that the data in the financial analysis section is consistent with the assumptions made in other sections of your business plan.

There may be no section of your business plan where you need help as much as you do with your financial analysis section. The assumptions, forecasting, and specific numbers can be complicated and generally difficult to wrap your head around, especially if you don’t have a financial background. This financial information, though, is exactly the data your audience will be looking for.

You can avoid the stress and uncertainty by getting help from a qualified financial professional early in the process.

When it comes to the financial analysis of your business plan, have a basic idea of what each element should include, where the data comes from, and what the numbers mean. This stands even if you have help developing the financial analysis section because you will be the one left to explain and expand on the financial data in face-to-face situations.

GAAP (generally accepted accounting principles ), a collection of rules, procedures, and conventions that define accepted accounting practices should be followed throughout this section.

Use graphs and charts in the financial analysis section to illustrate the financial data , just as you should in other sections of your business plan that include extensive data, numbers, statistics, and trends. Put the most important visuals in the financial analysis, with the supporting graphics included in the Appendix.

A quick way to lose the attention of a potential investor is by having flawed calculations or numbers that are not backed up. Double and triple check all of your calculations and figures, and have a third-party do the same to ensure everything adds up.

You also should avoid including any figures that are not explained, backed up and otherwise researched extensively, especially when it comes to assumptions you've made. Use data from current and past markets and financial situations to substantiate your numbers.


500+ business plans and financial models

Manufacturing Business Plan PDF Example

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  • May 7, 2024
  • Business Plan

the business plan template for a manufacturing business

Creating a comprehensive business plan is crucial for launching and running a successful manufacturing business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your manufacturing business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a manufacturing business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the manufacturing industry, this guide, complete with a business plan example, lays the groundwork for turning your manufacturing business concept into reality. Let’s dive in!

Our manufacturing business plan covers all essential aspects necessary for a comprehensive strategy. It details operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

  • Executive Summary : Provides an overview of the manufacturing company’s business concept, market analysis , management, and financial strategy.
  • Facilities & Equipment: Describes the facility’s capabilities, machinery, and technological advancements.
  • Operations & Supply: Outlines the production processes, supply chain logistics, and inventory management.
  • Key Stats: Offers data on industry size , growth trends, and market positioning.
  • Key Trends: Highlights significant trends impacting the industry, such as automation and localization.
  • Key Competitors : Analyzes primary competitors and differentiates the company from these rivals.
  • SWOT: Analyzes strengths, weaknesses, opportunities, and threats.
  • Marketing Plan : Outlines tactics for attracting new contracts and maintaining client relationships.
  • Timeline : Sets out key milestones from inception through the first year of operations.
  • Management: Information on the management team and their roles within the company.
  • Financial Plan: Projects the company’s financial performance over the next five years, detailing revenue, profits, and anticipated expenses.

the business plan template for a manufacturing business

Manufacturing Business Plan

how to make a financial plan for a small business pdf

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your manufacturing business plan, offering a concise overview of your manufacturing facility and its products. It should detail your market positioning, the range of products manufactured, the production process, its location, size, and an outline of day-to-day operations.

This section should also explore how your manufacturing business will integrate into the local and broader markets, including the number of direct competitors within the area, identifying who they are, along with your business’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the business’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your business’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Manufacturing Business Plan exec summary1

Dive deeper into Executive Summary

Business Overview

Facilities & equipment.

Describe your manufacturing facility. Highlight its design, capacity, and technology. Mention the location, emphasizing accessibility to transport routes. Discuss advantages for efficiency and cost management. Detail essential equipment and its capabilities.

Operations & Supply Chain

Detail product range. Outline your operations strategy for efficiency and scalability. Discuss supply chain management. Highlight sourcing of materials, inventory control, and logistics. Emphasize strong partnerships with suppliers and distributors.

Make sure to cover here _ Facilities & Equipment _ Operations & Supplies

how to make a financial plan for a small business pdf

Market Overview

Industry size & growth.

Start by examining the size of the manufacturing industry relevant to your products and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing demand for sustainable manufacturing processes, automation, and advanced materials. For example, highlight the demand for products that utilize eco-friendly materials or energy-efficient production techniques, alongside the rising popularity of smart manufacturing.

Key Competitors

Then, consider the competitive landscape, which includes a range of manufacturers from large-scale enterprises to niche firms. For example, emphasize what makes your business distinctive, whether it’s through advanced technology, superior product quality, or specialization in certain manufacturing niches. This section will help articulate the demand for your products, the competitive environment, and how your business is positioned to thrive within this dynamic market.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

how to make a financial plan for a small business pdf

Dive deeper into Key competitors

First, conduct a SWOT analysis for your manufacturing business. Highlight Strengths such as advanced production technology and a skilled workforce. Address Weaknesses, including potential supply chain vulnerabilities or high production costs. Identify Opportunities like emerging markets for your products or potential for innovation in production processes. Consider Threats such as global competition or economic downturns that may impact demand for your products.

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, trade shows, digital marketing, and strategic partnerships. Emphasize the importance of showcasing product quality and technological advantages to differentiate your business in the market.

Finally, create a detailed timeline that outlines critical milestones for your manufacturing business’s launch, marketing initiatives, customer acquisition, and expansion goals. Ensure the business progresses with clear direction and purpose, setting specific dates for achieving key operational and sales targets.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Manufacturing Business Plan strategy

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the manufacturing business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the manufacturing business toward its financial and operational goals.

For your manufacturing business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Manufacturing Business Plan management

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your manufacturing business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your manufacturing business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

Manufacturing Business Plan financial plan

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Family Financial Planning: A Complete Guide

Victoria araj.

6 - Minute Read

PUBLISHED: May 10, 2024

What Is Family Financial Planning?

Financial planning involves creating a plan to achieve your specific financial goals . Everyone has a slightly different financial situation, with different incomes and goals, so it’s important to note that financial planning isn’t one-size-fits-all. That’s especially true when you add a family to the mix.

In general, family financial planning focuses on the scenarios a family is likely to face. These might include covering a child’s educational costs or building enough financial stability for one parent to stay at home.

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Benefits Of A Family Financial Plan

A family financial plan can help you in many ways. Let’s take a closer look at some of the benefits:

  • You can visualize what success looks like. When you know what you want to accomplish with your funds, it can be easier to stick with good financial habits. For example, instead of making an impulse purchase, it might be easier to set aside the funds for a dream vacation, a college fund or to install a pool in the backyard for the kids to enjoy.
  • You can allocate your income appropriately. With a clear understanding of how you want to use your funds, you can use your income in the right places to achieve the goals you’ve set. Otherwise, it’s easy for your funds to get gobbled up by unplanned purchases instead of making their way into your savings or investment account.
  • You can plan for big expenses. Most families run into big expenses along the way, like a new vehicle or college expenses. With a plan, you can make sure you are saving enough now for the future.
  • You can get on the same page. If you have a spouse, building a financial plan together can help you both get on the same wavelength about money. With a shared plan, it’s often easier to make smart financial choices as a team.

How To Create A Family Financial Plan

A family financial plan can be a valuable tool. Let’s explore how to make a financial plan for a family below.

1. Envision Your Goals

A solid financial plan starts with your goals. Take some time to brainstorm life goals for you and your family, which are often closely tied to your financial goals.

Here are some goals you might have:

  • Retirement planning: Most of us plan to leave the working world at some point. Retirement savings can make this a reality.
  • Buying a home: You may want to include buying a home in your financial plan.
  • College expenses: If you want to help your child pay for college later on, creating a savings plan can help you cover high costs when they reach the proper age.
  • Taking a dream vacation: Saving up for a dream trip with your family can fit into a budget and build lasting memories.
  • Estate planning: If you want to leave something behind for your family when you pass on, an estate plan can complement your financial roadmap.
  • Paying off debt : High-interest debt can act like a drain on your financial future. Adding debt repayment to your financial plan could be a good fit and potentially free up money for the future.

As you consider these plans, take some time to determine how much each goal might cost. For example, you might need $5,000 for your dream trip but paying off a home purchase could cost hundreds of thousands of dollars.

It’s also helpful to keep your goals realistic and research them to see they’ll fit your budget. For example, saving up to install an in-ground pool into your backyard could actually be cheaper than buying a new home with a pool already installed.

2. Dive Into The Numbers

With your financial goals in mind, it’s time to take a closer look at the numbers. You’ll need to determine how much money you’re earning and how much money you can allocate for each goal, while still leaving room in your budget for current expenses.

If you don’t see enough room in your budget to cover all your goals, it might be time to cut back on current expenses. This might include trading in your car for a more affordable ride, which could free up money to set aside for retirement each month.

On the other side of the coin, you could focus on increasing your income. For example, a side hustle could bring in the funds you need to consistently save for the future. Since there’s no limit to how much you can earn, focusing your effort on earning more might be the right play.

Play with the numbers until you strike a comfortable balance between your current expenses and future financial goals. Don’t be afraid to find creative ways to spend less or earn more so that you can allocate more toward your goals.

3. Automate Your Savings

With a clear picture of where you want your funds to go, it’s time to start putting your plan into action. One of the best ways to do that is by automating your savings. For example, say you want to build an emergency fund. If you’re paid by direct deposit, you could have a predetermined amount of your paycheck sent directly to your savings account each pay period.

Automation is a helpful way to avoid the temptation of overspending. By arranging automatic transfers to your savings account, you establish a separation between your disposable income and your savings.

4. Build Your Investments

For more long-term goals, an option is to build your wealth through investing.

In general, the first place to start building investments is through a retirement account. You might be able to access a 401(k) or 403(b) through your employer, which might include a matching contribution. Another option is an individual retirement account (IRA) , which also offers tax advantages.

If you have more funds to invest, a taxable brokerage account can help you grow an investment portfolio. Before you start investing, it’s a good idea to speak with a financial advisor to build an investment plan that’s right for you.

5. Evaluate Your Insurance

As you build a bright financial future, it’s helpful to consider your insurance coverage. If you own a house or vehicle, you might want to increase your liability coverage as you have more to protect.

Term life insurance may be another good option for families. If you or your spouse passes away prematurely, a life insurance policy can help your family stay on track without your income. It’s a good idea to consider term life insurance if you have any dependents who rely on your income.

6. Stay Flexible

Even if you build an outstanding financial plan, it’s important to stay flexible. Life has a habit of throwing unexpected things our way, which can change the trajectory of your financial plans. Don’t be afraid to adjust as needed.

Mistakes To Avoid With Family Financial Planning

As you craft a family financial plan, it’s important to avoid the following missteps:

  • Skipping expert help: It’s never a bad idea to consult a vetted expert. The right financial advisor can help you work through the details of your plan.
  • Working with an unqualified advisor: Not everyone is qualified to provide personal finance advice. It’s important to find an advisor you trust, and preferably one who is a certified financial planner (CFP).
  • Being unrealistic: It’s important to stay realistic when mapping out a financial plan. An unrealistic plan can set you up for disappointment.
  • Staying rigid: Be prepared to adjust your financial plan on an as-needed basis. It’s okay if the plan needs to change to reflect your changing money goals.
  • Not following through: Creating a quality financial plan is an important first step, but you’ll need to follow through on your plan. Your financial goals can’t be achieved unless you save and invest to make progress according to your plan.

The Bottom Line

A well-crafted monetary plan has the potential to elevate your family's finances and carve a path toward your financial goals. Just know that it’s best to remain flexible and make necessary adjustments along the way.

If you want help managing your finances and setting a budget, sign up for the Rocket Money SM app today.


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Free Small Business Plan Templates and Examples

By Kate Eby | April 27, 2022

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We’ve compiled the most useful collection of free small business plan templates for entrepreneurs, project managers, development teams, investors, and other stakeholders, as well as a list of useful tips for filling out a small business template.

Included on this page, you’ll find a simple small business template and a one-page small business plan template . You can also download a fill-in-the-blank small business plan template , and a sample small business plan template to get started.

Small Business Plan Template

Small Business Plan Template

Download Small Business Plan Template Microsoft Word | Adobe PDF | Google Docs  

Use this small business plan template to identify trends and demographics in the company overview. Highlight how your product or service uniquely benefits consumers in the offerings section, and note your proposed timeline, milestones, and the key performance metrics (KPIs) you will use to measure your success. This template has all the components of a standard business plan, from the executive summary through financing details.

Small Business Plan Sample Template

Small Business Plan Sample Template

Download Small Business Plan Sample Microsoft Word | Adobe PDF | Google Docs  

Use this small business plan sample template to draft the subsections and headings of the contents of your plan. This template provides editable sample text that shows you how to organize and create a ready-to-be-implemented business plan. This sample template helps remove the guesswork of what to include in a small business plan.

Simple Small Business Plan Template

Simple Small Business Plan Template

Download Simple Small Business Plan Template Microsoft Word | Adobe PDF

Use this streamlined, customizable, simple small business plan template to chart revenue, expenses, and net profit or loss forecasts with sample graphics. Order your small business plan with numbered subsections and list them in a table of contents. Supplement the plan with additional information in the appendix for a complete business plan that you can present to investors.

Small Business Plan Chart Template

Small Business Plan Chart Template Powerpoint

Download Small Business Plan Chart Template Microsoft PowerPoint | Google Slides

Use this small business plan chart template to plan and track month-by-month and annual business planning. The flexible color-coded bar chart simplifies tracking and allows you to customize the plan to meet your needs. Add tasks, track owner status, and adjust the timeline to chart your progress with this dynamic, visually rich small business planning tool.

Small Business Plan Outline Template

Small Business Plan Outline Template

Download Small Business Plan Outline Template Microsoft Word | Adobe PDF | Google Docs

Use this small business plan outline template to jumpstart a plan for your small business. This template includes the nine essential elements of a traditional business plan, plus a title page, a table of contents, and an appendix to ensure that your document is complete, comprehensive, and in order. Easily simplify or expand the outline to meet your company’s needs.

Printable Small Business Plan Template

Printable Small Business Plan Template

Download Printable Small Business Plan Template  Microsoft Word | Adobe PDF | Google Docs

This print-friendly small business plan template is ideal for presentations to investors and stakeholders. The customizable template includes all the standard, critical business plan elements, and serves as a guide for writing a complete and comprehensive plan. Easily edit and add content to this printable template, so you can focus on executing the small business plan.

Small Business Startup Plan Template

Small Business Startup Plan Template

Download Small Business Startup Plan Template Microsoft Word | Adobe PDF | Google Docs  

Use this small business startup plan template to draft your mission statement and list your keys to business success, in order to persuade investors and inform stakeholders. Customize your startup plan with fillable tables for sales revenue, gross profit margin, and cost of sales projections to secure your business's pricing structure.

Fill-in-the-Blank Small Business Plan Template

Fill-in-the-Blank Small Business Plan Template

Download Fill-in-the-Blank Small Business Plan Template  Microsoft Word | Adobe PDF

This small business plan template simplifies the process to help you create a comprehensive, organized business plan. Simply enter original content for the executive summary, company overview, and other sections to customize the plan. This fill-in-the-blank small business plan template helps you to maintain organization and removes the guesswork in order to ensure success.

One Page Small Business Plan Template

One Page Small Business Plan Template

Download One Page Small Business Plan Template  Microsoft Excel | Microsoft Word | Adobe PDF

This one page small business plan template is ideal for quick, simple presentations. Use this template to summarize your business overview, market analysis, marketing, and sales plan, key objectives and success metrics, and milestones timeline. Complete the fillable sections to educate investors and inform stakeholders.

One Page Small Business Plan Example

One Page Small Business Plan Example

Download One Page Business Plan Example Microsoft Excel | Microsoft Word | Adobe PDF

This one page small business plan example prompts you to list your vision, mission, product or service, team member names, roles, and relevant experience to promote your small business. Use the market analysis, marketing, sales plan sections to detail how you aim to sell your product or service. This small business plan features fillable tables for key objectives and success metrics. Plus, you’ll find space for your financial cost structure and revenue sources to show how your business will remain profitable.

What Is a Small Business Plan Template?

A small business plan template is a roadmap for defining your business objectives and detailing the operational, financial, and marketing resources required for success. Use a small business plan template to strategize growth, forecast financial needs, and promote investment. 

A small business plan template organizes and outlines the content needed to achieve goals for growth and profit, including marketing and sales tactics. As opposed to starting from scratch, using a template makes it easy to organize the information and customize the plan to meet your needs. 

A small business plan template includes standard business plan sections, as well as the following sections: 

  • Executive Summary: Summarize the key points in your small business plan in two pages or less to hold your reader's attention and promote buy-in. Write this section last to capitalize on your understanding of the small business plan.
  • Company Overview: Describe the nature of your small business, the industry landscape and trends, demographics, and economic and governmental influences. List your location, product or service, and goals to show what makes your small business unique.
  • Problem and Solution: Identify and explain the problem your product or service will solve and its costs. Propose and describe your solution and its benefits. Conclude this section with a summary of the problem and solution.
  • Target Market: Identify your small business's target market by researching your product and service to determine the most likely demographic. Explain your target market's motivations for buying your product or service.
  • Competition: Note the other competitor product or service offerings, pricing, and company revenues to understand how to outperform your competitors. Detail your small business's competitive advantages, based on research.
  • Product or Service Offerings: Describe your product or service, how it benefits your target market, and what makes it unique. Highlight how your product or service will outsell competitors.
  • Marketing: Detail your marketing plan with objectives and strategy, including goals, costs, and an action plan. A successful marketing plan reduces costs and boosts your product or service sales.
  • Timeline and Metrics: Break down your small business plan into smaller activities. Describe these activities (and the performance metrics you intend to use to track them) and list a completion date for each.
  • Financial Forecasts: Explain how your organization uses past performance and market research to inform your business's economic forecasts. Estimate growth and profits based on your informed assumptions.
  • Financing: List your funding sources and how you intend to use the funds to keep your company on track as it grows. Smart financing at the planning stage prepares your organization for unexpected challenges and helps to mitigate risk.

A small business plan template enables you to complete your business plan quickly and comprehensively, so you can achieve your goals and turn your product or service idea into a profitable reality.

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The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

  • Best for a detailed budget
  • Best for tracking investment accounts
  • Best for taxes
  • Best for a hands-on approach
  • Other apps that didn't make the cut and why
  • Methodology

Frequently asked questions

Best personal finance management software of 2024.

Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate banking products to write unbiased product reviews.

The Best Personal Finance Software

  • Best for a detailed budget: Quicken Deluxe
  • Best for tracking investment accounts: Empower Personal Dashboard
  • Best if you like filing your taxes independently: TaxAct
  • Best for a hands-on approach: Google Spreadsheets

Ready to get a better understanding of your finances? Personal finance software can be a great tool for building better money habits and learning how to budget in the long term.

If you'd like more guidance when making a budget, consider also downloading a budgeting app .

Here are four excellent options you might consider if you're searching for personal finance software.

Best for a Detailed Budget

Quicken Quicken Deluxe

Cost: Regular pricing is $5.99 per month

Why it stands out:  Quicken Deluxe is a desktop software program. It's available for download for Mac and Windows computers. 

With the program, you'll be able to connect and keep track of bank accounts, investment accounts, loans, and credit cards . You'll also be able to create a 12-month budget. Usually personal finance software programs only have monthly budget plans.

Quicken Deluxe also has a "what-if" tool that lets you see potential scenarios when you make certain investments or loan decisions to help you build a financial plan .

What to look out for:  Quicken Deluxe primarily focuses on basic finances and investments. If you have a business or prefer more robust features, like priority customer support, you may fare better with Quicken Premier or Quicken Home & Business.

Regular pricing for Quicken software plans varies from $3.99 per month to $10.99 per month.

Best for Tracking Investment Accounts

Empower Empower Personal Dashboard

0.49% to 0.89%

  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Free financial and wealth management tools; fees top that of traditional brick-and mortar-firms
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Investment selection includes stocks, ETFs, bonds, and private equities; portfolio management for employer-sponsored plans (e.g., 401(k)s or 403(b)s)
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Socially responsible investment strategies and tax optimization strategies
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. One-on-one financial advisor guidance
  • con icon Two crossed lines that form an 'X'. High management fees
  • Promotion: None at this time.

Cost:  Free

Why it stands out: The Empower Personal Dashboard is another software tool that's available through a mobile app or website. You might find the Empower Personal Dashboard appealing if you want to use a well-rounded platform that also helps monitor investment accounts and retirement plans .

With the Investment Checkup feature, you can check your current portfolio allocation alongside an ideal target allocation to minimize risk and reduce volatility. It also has a fee analyzer tool that reviews hidden fees for mutual funds , investment accounts, and retirement accounts.

What to look out for:  Some tools are exclusively for Empower advisory clients. For example, clients will have access to a financial roadmap tool that can help them stick with major financial goals.

Sign up for Empower Personal Dashboard

Best for taxes.

TaxAct TaxAct

$0.00 - $99.99 (+$39.99 or $59.99 for state return, depending on package)

  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Expert help is available with every filing package
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Free federal and state filing covers student and child tax credits
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Pay less than H&R Block and TurboTax and get a comparable experience
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Efficient and streamlined interface
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Tax document upload and import for easy data entry
  • Check mark icon A check mark. It indicates a confirmation of your intended interaction. Handy "double check" tool flags common errors
  • con icon Two crossed lines that form an 'X'. State returns aren't free, even when you qualify for free federal filing
  • con icon Two crossed lines that form an 'X'. Middle-of-the road option when it comes to cost

TaxAct gets the job done with fewer bells and whistles than H&R Block or TurboTax, though costs can still add up. It's best for someone who appreciates a simple, streamlined interface.

  • 4 plans, including a free federal option
  • Simple, intuitive interface
  • Free, instant access to a tax expert at all plan levels
  • Good middle-of-the road option on price and efficiency
  • Option to have a professional file your taxes at an additional cost

Cost:  $0.00 - $99.99 (+$39.99 or $59.99 for state return, depending on package)

Why it stands out: TaxAct is one of our best tax software picks. TaxAct has four DIY online options: Free, Deluxe, Premier, and Self-Employed plans. You'll pay one price for a federal tax return, and if you have to file a state tax return you'll pay an additional fee. 

TaxAct stands out from other tax software companies because it offers free expert support, regardless of which DIY plan you have. If you have questions while filing your tax returns, all you'll need to do is submit questions, and an expert will reach out to you over the phone.

What to look out for: Other tax software companies do not charge a fee for state returns, and they have lower fees for filing federal tax returns (although, their features may not be as robust). 

File with TaxAct

Best for a hands-on approach, google sheets.

Why it stands out: Perhaps you don't want to link all of your bank accounts or credit cards, and you don't mind taking a more active approach to money management. Then, you might consider using Google Sheets for a straightforward way of analyzing your spending and savings goals . 

Even those who aren't as tech-savvy will find that Google Sheets has a simple, no-fuss setup process. All you need to do is set up a Google account and open the Google Spreadsheets tab. Then, you can select a general template for budgets or investment tracking and follow the steps listed on the spreadsheet.

Keep in mind that you'll have to update your spreadsheet regularly to have an effective spreadsheet.

What to look out for: Creating and maintaining your budget fully depends on whether you're willing to manually input all your data. Some may like having a closer, more hands-on approach to tallying expenses or tracking changes. But if you're worried that it might become too overwhelming to make updates every month, consider one of our other options. 

Other Personal Finance Software We Considered That Didn't Make the Cut and Why

  • Tiller: Tiller might be worthwhile if you prefer tracking money in a spreadsheet, but don't want to update it manually. It links your bank accounts and credit cards to Google Sheets or Microsoft sheets so your transaction and balance information automatically update. It wasn't a top pick because Tiller only has a 30-day free trial, then costs $79 per year.
  • YNAB App : You may use YNAB App through the web or on an app. While it could be a good choice if you struggle with your spending in specific categories, Quicken Deluxe have more robust features. It also has a 34-day free trial, then you'll have to pay $14.99 per month or $99 annually.
  • Monarch Money : Monarch Money is a personal finance app and online platform. The plan costs $14.99 per month or $99.99 per year and allows you to track investment accounts or use customizable budget categories.
  • GNU Cash : This is a free accounting software for personal and small business finances. You may download the program for Windows and Mac devices. With GNU Cash, you manage your finances through a traditional checkbook system. It could be worth considering if you have a business, but for those who don't, it likely won't be an easy-to-use interface.
  • Quicken Simplifi : Simplifi by Quicken is a cloud-based software program, which means you'll need to have an internet connection to use its services. In comparison, other Quicken programs can be downloaded onto your computer. Simplifi by Quicken also isn't as robust as Quicken's desktop programs.
  • Quicken Starter: Quicken Starter could be worthwhile if you want a basic overview of your finances. But if you want to be able to create a 12-month budget or keep track of investment accounts, Quicken Deluxe will be a more compelling option. 
  • Rocket Money : Rocket Money has an app and online platform. Its premium plan has concierge services to review bills, premium customer support, unlimited budgets, and customizable budget categories. 
  • TaxSlayer : TaxSlayer was featured as the best budget pick in our best tax software guide. However, to qualify for the Simply Free Plan, you must have taxable income under $100,000, and you won't be able to claim dependents. TaxAct's free plan allows you to claim dependents. It also offers expert help with all filing packages.
  • H&R Block Tax Software : H&R Block is also featured in our best tax software guide. If you want to choose a more affordable option, you may prefer TaxAct, though.
  • TurboTax : TurboTax is featured in our best tax software guide and might be worth considering if you have a complex tax situation. However, TurboTax Premium plan cost more than TaxAct options. 

Methodology: How did we choose the best personal finance software?

Research is an important part of choosing a personal finance software program that fits your needs. First, we compiled a list of 13 personal finance software programs. Then, we compared each program by analyzing the following criteria: platform accessibility, pricing, money management features, and user experience. With tax software programs, we only considered the DIY online filing options. We did not consider full-service packages where an expert helps with taxes.

The best personal finance software for you depends on your financial goals and habits. Someone new to money management will likely want different features than someone who is seasoned in making budgets or prefers filing their taxes.To help you figure out which personal finance software program could be a good option for you, we highlighted the benefits and limitations of each product. 

There are free personal finance tools that you may use online. For example, Empower, GNU Cash, and Google Spreadsheets are free. Rocket Money also has free option.

What personal finance software is easiest for you will largely depend on your needs and level of comfort with technology and finance. Google Sheets is by far the easiest to set up, but it won't help you with the finance side of things. Conversely, something like Quicken Deluxe might not be as easy to set up, but it is far more helpful for your finance needs.

how to make a financial plan for a small business pdf

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how to make a financial plan for a small business pdf

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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Stress, confusion and uncertainty as borrowers navigate Biden debt relief plans

Supreme Courts Rules On Major LGBTQ Case And Strikes Down Biden's Student Loan Forgiveness Plan

When student loan repayments began last October, Rachel Grace was faced with a painful financial choice: start making payments or drop her health insurance coverage. She chose her loans and has since been crossing her fingers that she stays healthy.

“We’re already all pinching pennies. It was that big health insurance cost every month that I thought was the one place where, at least for now, fingers crossed, I can do without so that I can tackle this loan payment,” said Grace, who is 39 and works in marketing communications in Nebraska. “Of course, that could change in an instant, and that’s scary.”

But this week, Grace got the news she'd been in financial limbo over for months — her federal loans were being forgiven, wiping out a roughly $300 a month payment, under a Biden administration plan to clear the loan balances for those who have been making payments for at least 20 years.

After the Supreme Court rejected President Joe Biden’s sweeping debt forgiveness proposal and a Covid-era pause on student loan payments expired , millions of borrowers have been faced with tough financial choices and a web of new debt relief plans and administrative delays that have left many in limbo over if and when their debt will be forgiven, said student debt counselors and borrowers.

“The road to hell is paved with good intentions,” said Betsy Mayotte, the head of the Institute of Student Loan Advisors, a nonprofit that provides free student loan advice. “I have seen a significant number of borrowers who have had relief, but on the flip side, because everything has had to happen really fast, it’s also caused some confusion for borrowers and it’s caused some bumps in the road.”

But the effects of that relief are starting to be felt by more borrowers like Grace, something the Biden campaign is working to capitalize on in the months leading up to the election.

Biden’s efforts to provide relief to student loan borrowers has been a top policy priority during his time in office. The Biden administration says it has provided student debt relief to 4.6 million Americans through more than two dozen different programs, including fixes to a pre-existing loan forgiveness program for public service workers, erasing debt for borrowers defrauded or misled by their school and expanding debt forgiveness for people with disabilities.

Last month, Biden proposed additional plans he said would reduce or erase the student loan debts for millions more as early as this fall, an Education Department official said.

But many borrowers have struggled to make sense of what all those initiatives mean for them or see the full benefits as some programs continue to be implemented, said Robert Farrington, who counsels student loan borrowers and is editor-in-chief of the website The College Investor.

“There is a firehose of announcements and new programs and so many various nuances to all of these things. There’s different repayment plans, there’s different forgiveness programs, different lawsuits,” said Farrington. “It’s hard for borrowers to even know what applies to them. It’s so confusing.”

Education Department officials say borrowers who believe they are eligible for debt relief but haven’t received it yet should contact their loan servicer or the department ombudsman ’ s office .

Amid the confusion, the Biden campaign has been seeking to show the real-world impact on borrowers who have received debt forgiveness in its pitch to voters for a second term, a campaign official said. Biden and other top administration officials have fanned out across the country to tout their efforts.

In one instance, Biden visited the home of a former school principal in North Carolina who had $90,000 in debt erased under the public service loan forgiveness program, a decades-old program the Biden administration has made changes to in order for more borrowers to qualify. A TikTok video of the visit made by the man’s son got millions of views.

Still, the majority of voters have said they disapproved of Biden’s handling of the student loan issue — with 44% approving, making it Biden’s strongest area among registered voters, according to an NBC News poll last month. In a separate poll by the Harvard Institute of Politics, just 39% of voters under age 30 said they approved of the job Biden has done on student loans. But like in the NBC poll, it was a higher approval rating than on other key issues.

The campaign official said it will take more time and aggressive messaging to get the attention of voters, whom the campaign believes are not yet paying close attention to the election. The campaign is also seeking to contrast Biden’s policies with those of former President Donald Trump, who has opposed student debt relief programs and actively sought to eliminate funding for them while president.

Rep. James Clyburn, D-S.C., a close Biden ally, said he expects tens of thousands of additional borrowers to see debt relief ahead of the election as Biden’s programs continue to be implemented, giving the campaign more opportunities to highlight the contrast with Trump’s opposition to such programs, he said.

“Who do you want to put in charge of that program?” Clyburn said in an interview with NBC News. “The guy who refused to implement it?”

Biden “has implemented the program that [Trump] tried to get rid of,” Clyburn continued.

But for the millions of borrowers not eligible to have their debt cleared, they have been required to make payments since October, creating an additional financial strain for many. Around 40% of borrowers who have resumed payments said they are cutting back on spending while 29% said they were reducing the amount they were saving, according to a University of Michigan survey released in January.

The survey found that borrowers who had lower incomes, less education and weaker income prospects were more likely to increase their use of credit to maintain their spending amid the resumption of loan payments.

Others have opted not to make their payments. Around 64% of borrowers who had payments due were current on their student loan payments as of the end of December, according to the Department of Education.

The Biden administration has said it will hold off until this fall on enforcing the harshest penalties for nonpayment, like reporting delinquent borrowers to credit rating agencies and using forced collections.

Mayotte said a number of borrowers she works with have been holding off on making their payments because they can’t afford them or have opted to use the money to pay down higher-interest debt or to invest in high-yield savings or investing accounts until the administration’s nonpayment penalties kick in.

Once that happens, the wider implications of the restart in payments could be felt, but so far it hasn’t appeared to have had a significant impact on the wider economy, according to an analysis by Wells Fargo.

For Grace, who took out around $40,000 in private and federal loans to attend a four-year public university in 2003, she said her monthly loan payments have been a heavy burden on her finances since she first started making them more than a decade ago.

At the start of her career, her loan payments amounted to more than 15% of her take-home pay, preventing her from being able to build up an emergency fund for unexpected costs, like a car repair, and causing her to rack up credit card debt. For years, she said, she had to work a second job on the weekends to cover her expenses.

But her financial picture drastically changed during the pandemic when the Covid payment pause began. Without that monthly loan payment, she said she was able to start building up her savings and pay off credit card debt. Eventually, she was able to buy her first home.

“Prior to that pause, things were pretty dire,” Grace said. “And so this gave me the opportunity to really finally start to catch up. It’s amazing what happens when you don’t have hundreds of dollars month after month going to this.”

Grace said she knew the payment would eventually restart and didn’t take on any additional monthly expenses. But with inflation driving up the cost of everything from groceries to utilities, the resumption of the payment was an even bigger strain on her budget than before.

When it came time for the payments to restart in October on the $10,000 she still owes, Grace was also making a decision about signing up for her employer’s health insurance plan for 2024. She opted to take the risk of going without health insurance to continue making progress on paying down her debt.

With her federal loan payment now forgiven, she knows what she will do with the extra next month.

“I won’t be going to Target with that money, I won’t be going on vacation,” she said. “I will be enrolling in health insurance.”

how to make a financial plan for a small business pdf

Shannon Pettypiece is senior policy reporter for NBC News digital.

Money blog: 600 new skyscrapers 'on way' for London, report finds

A reader seeks help as her employer of 24 years is bringing in a new clock-in system to pay her by the minute. Read this and all the latest personal finance and consumer news in the Money blog - and share your own problem or dispute below.

Monday 13 May 2024 16:15, UK

  • Gen Z would rather deliver parcels than work in restaurants, Michel Roux Jr claims
  • 600 new skyscrapers on way for London, report finds
  • Money Problem: My workplace is bringing in new clock-in system to pay us by the minute - is this allowed?
  • Free childcare applications open for new age band

Essential reads

  • How to make sure your car passes its MOT
  • 'Loud budgeting': The money-saving trend that has nothing to do with giving up your daily coffee
  • How to avoid a holiday data roaming charge (while still using the internet)
  • Best of the Money blog - an archive

Ask a question or make a comment

Gordon Ramsay's restaurants tripled losses to £3.4m last year, as the chef warned businesses in the industry were facing a "challenging" climate. 

The chef's group spent millions opening five new restaurants in 2023, including a Lucky Cat in Manchester, a Bread Street Kitchen in Battersea Power Station and a Street Pizza in Edinburgh. 

Sales at his wide-ranging establishments rose, however, by 21% to £95.6m in the year to August, according to The Telegraph. 

"It's been a really hard-fought year, but at the same time an exciting year, and in tough times it amazes me how strong and vibrant our industry is," Ramsay told the news outlet. 

"It's challenging out there and businesses are battling to stay afloat, rising costs, rent and food costs, multiple strikes. It's a battle" 

He was optimistic, however, saying there hasn't been "so much passion and vibrancy" in the industry since he opened his first restaurant in 1998.

"We've still got something wonderful to celebrate, and I truly believe the industry has never been so exciting."

Once the UK's favourite alcoholic beverage, beer's popularity seems to be fading among the younger drinking generation... 

In fact, only 30% of people aged 18 to 24 ever drink it, according to a study commissioned by the Society of Independent Brewers. 

Instead, younger drinkers say they prefer drinking spirits, wine and cider. 

Pub visits appear to be suffering as well, with almost a quarter of the 2,000 people surveyed saying they have never visited their local. 

SIBA's 2024 Craft Beer Report paints a more positive picture for small and independent brewers, however, with more than 55% of beer consumers saying they now drink "local craft beer". 

It also found average beer production volumes among independent breweries has risen by 14% since last year - a return to pre-pandemic levels for the first time in 4 years. 

"Demand for local, independently brewed beer in the UK is strong, with independent brewers reporting production volumes up by 14%, meaning they have returned to 2019 volumes again," Andy Slee, SIBA's chief executive, said. 

But, he said, it's time for "cautious optimism" only, with the industry still plagued with a number of issues. 

"The short-term issue for small independent breweries isn't demand; it's profitability, rising costs and financial pressures such as lingering COVID debt," he said. 

"Far too many breweries are simply trying to survive rather than thrive, so while there are many positives signs highlighted in the report, for now it's cautious optimism."

Earlier this year, our Money reporter Emily Mee explored whether the UK's big night out culture was dying out. 

Nightlife experts warned we're losing one club every two days at the moment - and if we stay on this trajectory, we will have none left by 2030.

You can read more about her findings here...

A total of 583 skyscrapers are "queuing up in the pipeline" to be built across central London, a development thinktank has said. 

That is more than double the 270 built in the past decade. 

In the eastern borough of Tower Hamlets alone, 71 tall buildings were completed in that time that time, the report by New London Architecture found. 

A further 24 were in the City of London and 27 in Canary Wharf and Isle of Dogs. 

The report said the rapid change has been fuelled by a "burgeoning demand" for office and residential space, overseas investment and a supporting planning environment. 

"Tall buildings have changed the face of London substantially over the last 20 years and will continue to do so - the pipeline that NLA has tracked means there is at least 10 years' supply that has already been defined," Peter Murray, the organisation's co-founder, said. 

"London's population continues to grow, passing the 10 million mark at the end of this decade.

"We'll still need tall buildings; and NLA will continue to keep a close watch on what's going on." 

Restaurants might only be able to open three or four days a week due to staffing problems, Michel Roux Jr has warned. 

Speaking to The Telegraph as he gears up to open his new restaurant Chez Rouz, the Michelin starred chef admitted the industry needs to change to accommodate flexible working hours. 

"Just because I worked 80 hours a week or more doesn't mean the next generation should," he said. 

"Quite the contrary. That is something that we have to address in our industry."

But, he warned that the move will come at a cost... 

"It will mean ultimately that going out is going to be more expensive, and that maybe your favourite restaurant is no longer open seven days a week - it's only open three or four days a week," he said. 

The industry is known for its long, unsociable working hours, and Roux Jr explained that the real issue hit after the pandemic, with people no longer wanting to work weekends. 

"People don't want to work unsociable hours and would rather work delivering parcels as and when they want to. It's as simple as that," he added. 

Earlier this year, Roux Jr said goodbye to his famous restaurant Le Gavroche in London. 

It had been opened by his father Albert Roux and uncle Michel Roux in 1967. 

Now, he said it's "brave" to open a new restaurant, with the market "very, very tough". 

"I really feel for anyone that is brave enough to open up a restaurant now. It's incredibly difficult," he added. 

Chez Rouz at The Langham in Marylebone, central London, is due to open on 22 May. 

By James Sillars , business news reporter

A pause for breath on the FTSE 100 after a 3% gain over the course of past week that took the index to a fresh record closing high.

The rally of recent weeks - significant for London's standing and pension pots alike - has been broad based and reflects several factors.

A major driver has been sterling's weakness versus the US dollar.

The US currency has been strong as the Federal Reserve, its central bank, has hinted it will be some time yet before it begins to cut interest rates.

Language out of the Bank of England last week sparked a flurry of bets that UK rates could be cut as early as next month.

A weaker pound boosts dollar-earning constituents on the FTSE 100 because they get more for their money when dollars are converted to pounds.

Also at play is the view that UK stocks represent good value, as they are cheaper compared to many of their international peers.

A few moments ago, the FTSE 100 was trading 6 points lower at 8,423.

A major talking point is the possibility of the Chinese fast fashion firm Shein listing in London.

According to Reuters, the company has shifted its focus to the UK after receiving a lukewarm reception in the United States.

The news agency, citing two sources, reported that Shein was stepping up its preparations for an initial public offering in London that would be expected to be one of the biggest carried out globally this year.

By Emily Mee , Money team

No one likes the date in their calendar when their MOT rolls around. 

But to make things a little less stressful, consumer expert Scott Dixon - known as The Complaints Resolver - has given us some tips on what to look out for to help your vehicle pass with flying colours. 

Some of the most common failures are faulty steering, brakes, suspension, worn or damaged tyres, cracked windscreens and faulty lights. 

Mr Dixon recommends you get your car serviced a couple of weeks before your MOT, in case there are any complex or costly issues. 

This will give you time to get them fixed and get your car through first time without any advisories. 

Aside from taking your car for a service, there are also some easy checks you can run yourself... 

Listen for unusual clunks while you're driving - this could be a sign of a damaged suspension. 

You could also check by pushing the car down on each corner. It should return to normal without bouncing a few times. 

Another option is to look with a torch under the wheel arch, as this should reveal any obvious defects. 

Blown bulbs are a common MOT failure, but they're cheap to fix. 

Walk around your car and check all the bulbs are working - this includes the headlights, sidelights, brake lights, indicators and the number plate bulb.

Mr Dixon says it's "not an easy job" to change the lightbulbs yourself on most modern cars, as the MOT will also check the positioning of the light. Therefore he recommends getting this done professionally. 

Squealing or grinding noises may be a sign your brake pads need replacing. 

You should also check whether your car stops in a straight line, or whether it pulls in different directions. 

Don't forget about the handbrake, too. Test it out on a slope and see if it securely holds the car. If it doesn't, you should get it adjusted. 

It's easy to check if your wipers work okay, but you should also make sure to inspect the blades for tears and rips. 

They should be able to clean the windows with no smears. 

Mr Dixon says you don't need to pay Halfords to change your wiper blade as you can "do it yourself in seconds". All you need to do is look for a YouTube tutorial. 

He also recommends buying the Bosch wiper blades, as he says these are good quality and will also be a sign you've looked after your car well when you come to sell it. 

One thing to look out for is tread depth. You can do this by looking for the "wear bar" that sits between the tread. 

If it's close to 1.6mm and is low, you should get the tyre replaced so it's not flagged as an advisory. 

Also check for perished tyre walls, which can happen when a vehicle is standing for any length of time. 

Uneven tyre wear is another potential issue, and if there are signs of this you should get the tyre replaced and tracking and suspension checked. 

These must be in good condition and working order, with no tears or knots. 

Registration plates

Your number plates should be clean and visible with a working light bulb at the rear. You may need to give them a wipe and replace the bulb if necessary. 

This should be in good condition, without damage such as loose bumpers or sharp edges. 

Mr Dixon advises against using automatic car washes during your car's lifetime, saying they "wreck your car". 

"It's not just your paintwork but they can also damage the wiper blades and the bodywork," he says. 

Check for warning lights

You'll need to take your vehicle to a trusted garage or mechanic for this. 

Exhaust emissions

Some diesel vehicles can fail their MOTs based on emissions. To avoid this, you can buy a fuel treatment pack and take your car for a good run to clear the fuel lines and tank.

Driving for at least 30 to 50 minutes at a sustained speed on a motorway or A-road should help to clear the filter. 

You should make sure the driver's view of the road isn't obstructed, so check for stone chips at eye level and remove any obstructions such as air fresheners and mobile phone cradles. 

What else should you think about? 

Make sure your car is clean beforehand, as a tester can refuse to do your MOT if the vehicle is filthy and full of rubbish. 

Giving your car a clean can also give you a chance to inspect it, Mr Dixon says. 

Another thing to do is to check last year's MOT for any advisories that might crop up this time. 

These potential issues will still be there - so it's best not to ignore them. 

You can check your vehicle's MOT history using  https://car-check.co.uk . 

Every Monday we get an expert to answer your money problems or consumer disputes. Find out how to submit yours at the bottom of this post. Today's question is...

I have worked at a bank for 24 years - the facilities are outsourced. This new company is bringing in a system where the staff have to click in and out and are then paid by the minute? Is this allowed? Amber

Ian Jones, director and principal solicitor at Spencer Shaw Solicitors, has picked this one up...

Your rights depend on your contract and what it says about payment. Does it specify an annual salary, or payment by time? Does it allow for changes to how payment is calculated?

If the contract does not allow for this type of payment, your employer may be trying to vary the contract of employment unlawfully.

If you're directly employed by the bank, and your pay arrangements are changing because of a new monitoring system, this would be an internal contract variation. If you work in the facilities department and the new contractor is taking over as your employer, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) 2006 may apply. 

In this case, your current terms, conditions and previous service will transfer to the new employer.

TUPE may make the issue sound more complicated but, in practice, either way the changes will be valid only if the employee agrees to them.

If you have not agreed to the change, then this could be a breach of contract. This could give rise to a successful claim in the civil courts or the employment tribunal. 

If the breach is serious (for example, you're paid less than agreed in the original contract) and you resign in response, this could amount to constructive dismissal for which a claim can be made in the employment tribunal. 

It would be sensible to get the contract reviewed by a solicitor for advice. But act swiftly - if you continue working for the employer, you are effectively waiving the breach and accepting the change to your contract.

To make it possible to pay by the minute, employees may be monitored while at work. When collecting and processing data and using it to make a decision, the employer must comply with data protection laws. If not, the employee could be entitled to compensation, depending on the breach, or the employer could be at risk of a sanction by the regulator the Information Commissioner's Office.

This feature is not intended as financial advice - the aim is to give an overview of the things you should think about.  Submit your dilemma or consumer dispute via:

  • The form above - make sure you leave a phone number or email address
  • Email [email protected] with the subject line "Money blog"
  • WhatsApp us  here .

Please make sure you leave your contact details as we cannot follow up consumer disputes without them.

We're back for another week of consumer news, personal finance tips and all the latest on the economy.

This is how the week in the Money blog is shaping up...

Today : Every week we ask industry experts to answer your Money Problems . Today, a reader's employer is bringing in a new clock-in system to pay workers by the minute - but is this allowed?

Tuesday : This week's  Basically...  explains everything you need to know about the PIP. 

Wednesday : We speak to one of London's top chefs for his Cheap Eats at home and in the capital.

Thursday : Savings Champion  founder Anna Bowes will be back with her weekly insight into the savings market.

Friday : We'll have everything you need to know about the mortgage market this week with the guys from Moneyfacts.

Running every weekday, Money features a morning markets round-up from the  Sky News business team  and regular updates and analysis from our business, City and economic correspondents, editors and presenters -  Ed Conway ,  Mark Kleinman ,  Ian King ,  Paul Kelso  and  Adele Robinson .

You'll also be able to stream  Business Live with Ian King on weekdays at 11.30am and 4.30pm.

Bookmark  news.sky.com/money  and check back from 8am, and through the day, each weekday.

The Money team is Emily Mee, Bhvishya Patel, Jess Sharp, Katie Williams, Brad Young and Ollie Cooper, with sub-editing by Isobel Souster. The blog is edited by Jimmy Rice.

By Jess Sharp , Money team 

Money saving trends are constantly popping up on social media - but one in particular has been gaining huge amounts of attention.

Created accidentally by a comedian, loud budgeting is breaking down the taboo of speaking about money.

The idea is based on being firmer/more vocal about your financial boundaries in social situations and setting out what you are happy to spend your money on, instead of "Keeping up with the Joneses". 

On TikTok alone, videos published under the hashtag #loudbudgeting have garnered more than 30 million views - and that figure is continuing to climb. 

We spoke to Lukas Battle - the 26-year-old who unintentionally created the trend as part of a comedy sketch. 

Based in New York, he came up with the term in a skit about the "quiet luxury" hype, which had spread online in 2023 inspired by shows like Succession. 

The term was used for humble bragging about your wealth with expensive items that were subtle in their design - for example, Gwyneth Paltrow's  £3,900 moss green wool coat from The Row, which she wore during her ski resort trial...

"I was never a big fan of the quiet luxury trend, so I just kind of switched the words and wrote 'loud budgeting is in'. I'm tired of spending money and I don't want to pretend to be rich," Lukas said. 

"That's how it started and then the TikTok comments were just obsessed with that original idea." 

This was the first time he mentioned it...

Lukas explained that it wasn't about "being poor" but about not being afraid of sharing your financial limits and "what's profitable for you personally". 

"It's not 'skip a coffee a day and you'll become a millionaire'."

While talking money has been seen as rude or taboo, he said it's something his generation is more comfortable doing. 

"I've seen more debate around the topic and I think people are really intrigued and attracted by the idea," he said. 

"It's just focusing your spending and time on things you enjoy and cutting out the things you might feel pressured to spend your money on."  

He has incorporated loud budgeting into his own life, telling his friends "it's free to go outside" and opting for cheaper dinner alternatives.

"Having the terminology and knowing it's a trend helps people understand it and there's no awkward conversation around it," he said. 

The trend has been a big hit with so-called American "finfluencers", or "financial influencers", but people in the UK have started practising it as well. 

Mia Westrap has taken up loud budgeting by embarking on a no-buy year and sharing her finances with her 11.3k TikTok followers. 

Earning roughly £2,100 a month, she spends around £1,200 on essentials, like rent, petrol and car insurance, but limits what else she can purchase. 

Clothes, fizzy drinks, beauty treatments, makeup, dinners out and train tickets are just some things on her "red list". 

The 26-year-old PHD student first came across the idea back in 2017, but decided to take up the challenge this year after realising she was living "pay check to pay check". 

She said her "biggest fear" in the beginning was that her friends wouldn't understand what she was doing, but she found loud budgeting helped. 

"I'm still trying my best to just go along with what everyone wants to do but I just won't spend money while we do it and my friends don't mind that, we don't make a big deal out of it," she said. 

So far, she has been able to save £1,700, and she said talking openly about her money has been "really helpful". 

"There's no way I could have got this far if I wasn't baring my soul to the internet about the money I have spent. It has been a really motivating factor."

Financial expert John Webb said loud budgeting has the ability to help many "feel empowered" and create a "more realistic" relationship with money.

"This is helping to normalise having open and honest conversations about finances," the consumer affair manager at Experien said. 

"It can also reduce the anxiety some might have by keeping their financial worries to themselves." 

However, he warned it's important to be cautious and to take the reality of life into consideration. 

"It could cause troubles within friendship groups if they're not on the same page as you or have different financial goals," he said.

"This challenge isn't meant to stop you from having fun, but it is designed to help people become more conscious and intentional when it comes to money, and reduce the stigma around talking about it." 

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how to make a financial plan for a small business pdf


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