New to Financial Planning for your business

Written by Joanne David

Financial planning a brief explanation

In this blog, I discuss the importance of a comprehensive financial plan for a business.

Indeed, when self-employed or solopreneurs, creating a solid financial business plan is crucial for the success and sustainability of any business.

This is the roadmap for your business’s future. A well-structured financial plan should cover your business’s short-term and long-term financial needs. This includes things like cash flow, expenses, revenue, profit, and growth, like realistic goals.

This plan helps business owners be self-employed or not, and stakeholders understand the company’s financial health, make informed decisions, and set realistic goals for growth.

Here’s a step-by-step of the key components:

Cash Flow:Green coloured cash flow chart going up wards

Think of cash like fuel in the tank of your business. Without it, your business can’t run.

Monitoring cash flow is essential as it tracks the movement of money in and out of the business. It helps ensure that there is enough cash to cover operational expenses, debt obligations, and investments.

If you are in need of a greater understanding of your cash flow, contacting a bookkeeper or accounting would be a great move as they find cash flows riveting.

Expenses and purchases:Blue wallet with cash being taken out of it

Identifying and categorizing expenses and purchases is vital for budgeting and cost control. It includes both fixed costs (e.g., rent, utilities) and variable costs (e.g., materials, marketing).

If using cloud accounting like FreeAgent, QuickBooks or Xero (there are others out there) with a scan and snap for receipt capture, please ensure all the details have transferred correctly. There are huge benefits to this tool. For example, it makes it easier to match the receipt to the transaction correctly. Notes can be in the description, etc. Sometimes, they make mistakes and do not always have the correct details. You will have to correct them, or the numbers will not add up right.

If you are unsure where to code these, seek a professional bookkeeper’s advice or research on the HMRC site for what can and cannot be claimed.

Revenue or Income:gold word revenue over arrow zig zag up

Tracking revenue sources and trends is critical for understanding the sources of income and identifying areas for potential growth.

It also helps assess the effectiveness of sales and marketing strategies. This also links to cash flow, as you want to keep an eye on what is owed to you. Depending on your business type, you are paid on time. Using cloud accounting can really help you keep up to date with this.

Growth:plant pot with words Business as the plant being watered by blue water can

A financial plan should outline strategies for business growth. This could involve expanding products or services, entering new markets, or increasing market share.

Keeping an eye on the growth of the business monthly or quarterly will help to keep on track or make adjustments for unseen events.

Especially now as we are in a cost-of-living crisis, and you never quite know what comes our way next.

Short-term and Long-term Needs:Green street sign words Long Term and Short term on them

Addressing both short-term and long-term financial needs helps ensure stability and sustained growth.

Short-term needs might involve covering immediate expenses, while long-term needs could include capital investments, research and development, or expansion plans.

It is also a great idea to consider different saving pots or accounts so you can put money aside for future taxes, business adventures, holidays or something else.

Having a contingency plan and savings pots could be priceless in backing and protecting yourself and the business.

Creating a financial plan typically involves:


Setting a budget helps allocate funds to various areas of the business and prevents overspending.

You will need to take a good look at your monthly spending, maybe set up an Excel sheet, if not using accounting software, somewhere to input the figures and keep doing this over a few months.

A pattern should start to appear, and you will get a better idea of your monthly business expense spending and check this against the income received in those months.

You can now figure a budget out, but keep a close eye on it for adjustments that may be needed.


Projecting future financial performance based on historical data and anticipated changes in the business environment.

This can be managed well through cloud accounting as it will give you real-time information as long as it is up to date.

There are qualified bookkeepers and accountants who love this side of accounting and can give a great breakdown that will benefit you and the business.

If you are struggling to locate a Bookkeeper or accountant, go to governing bodies like AAT and ICB, where there are directories to find an accountant or bookkeeper.

Scenario Analysis

Considering various scenarios (optimistic, realistic, pessimistic) helps prepare for potential challenges and opportunities.

This is particularly useful when there’s a high level of uncertainty in the business environment.

It helps businesses become more adaptable and resilient by considering multiple potential outcomes and developing strategies to navigate each one.

Keep in mind that scenario analysis isn’t about predicting the future with certainty but rather about enhancing your ability to handle a range of possible futures.

By systematically examining various scenarios, businesses can avoid being caught off guard and can make strategic choices that position them to succeed regardless of the challenges they might face.

If you are in need of support to go through this, seeking a professional would be a great benefit.

Risk Management

Effective risk management involves a proactive and holistic approach to understanding and addressing potential challenges.

By systematically identifying and addressing risks, businesses can better protect their interests, maintain stability, and enhance their ability to achieve their goals even in uncertain and dynamic environments.

Capital Planning:

Determining how much capital is needed for growth initiatives and how to acquire it (e.g., equity financing, loans).

Capital planning, also known as capital budgeting or investment planning, refers to the process of identifying, evaluating, and selecting long-term investment projects or expenditures that will generate value for a business over an extended period.

It involves making strategic decisions about how to allocate financial resources to various projects or initiatives that contribute to the company’s growth, profitability, and competitiveness.

Capital planning is a critical aspect of financial management for businesses of all sizes.


A well-crafted financial plan provides a roadmap for making informed decisions, attracting investors or lenders, and guiding the overall direction of the business.

It’s important to regularly review and adjust the financial plan as circumstances change to ensure the business remains on track to achieve its goals and grow.

I hope you have found this helpful. If you are curious to find out more and see how I could work alongside you in your business journey, click here to book a chat, and let us sit down and have a conversation over Zoom or Google Meet about your plans and what you may need help with.

Virtual Bookkeeper Joanne David

Joanne David

Joanne David has been running her own business for 5 years and has over 15 years experience in bookkeeping.  From September 2023 has added another branch to her tree and now includes Chapter Foundations for bookkeeping, marketing and business strategy.

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The information contained above is provided for information purposes only. The contents of this article are not intended to amount to advice, and you should not rely on any of the contents of this article. Please research and Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this article. Joanne David and Chapter Bookkeeping disclaim all liability and responsibility arising from any reliance placed on any of the contents of this article.

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