We usually find that business owners have a great future planning strategy and a clear vision of where they are and where they want to be in the medium-to-long-term future.
However, often their plans fail to consider the financial aspects of running a business – things we deal with daily.
Yes, a business plan is a roadmap for your business’s future, and it’s crucial for both planning and attracting investment, but to be properly effective it must consider the potential impact of tax.
Things like Income Tax, Corporation Tax, cash flow projections, debt, liabilities, funding, and investments are often ignored, but they should be included in your plans if you wish to succeed.
Tax planning
Effective tax planning is essential for any business if you want it to survive more than a year.
Understanding and planning for taxes like Inheritance Tax and Capital Gains Tax can significantly impact your profitability so if you fail to prepare for these liabilities, you are effectively operating blind.
You should at least know which taxes apply to your business and how to manage them properly.
In these issues, professional advice from an experienced accountant is your best bet for managing tax well.
Cash flow management
You might have already learned that cash flow is the lifeblood of any business.
In its simplest form, it's a measure of the money coming in and out of your accounts.
By accurately forecasting your cash flow you can predict the best times to save and the best times to invest which goes a long way to maintaining a healthy balance.
It also ensures that you can meet your financial obligations while simultaneously growing your business.
Budgeting and financial projections
Budgeting is about making educated guesses on future income and expenses.
It's a balancing act – overestimate your income, and you could run out of cash.
Underestimate your expenses, and you might face unexpected debts.
Financial projections are your business's financial future on paper, vital for long-term planning and should be discussed at length with your accountant.
Funding and investment
Securing funding is a major hurdle for many start-ups.
Presenting a sound financial plan to potential investors is key but few will be willing to invest if it fails to represent your financial situation accurately and comprehensively.
To get funding, you’ll need to understand the different options and tailor your approach depending on which one is best for you.
But how do you know which funding option is best for you?
The first thing we would advise is to have an honest and open discussion of your finances with your accountant.
Please don’t hesitate to reach out to one of our team. We are excited to hear about your business plans and help you achieve your financial goals.
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