Last Updated: February 16, 2024, 1:55 pm by TRUiC Team

Basics of Small Business Financial Planning

Ch1. 07

In this chapter, we delve into the basics of small business financial planning, equipping you with essential knowledge for fiscal health.

This video is part of the free Small Business Startup Course designed to help walk you through the entire process of business formation from idea to launch. 

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Small Business Financial Planning: The Basics

In this chapter, we delve into the basics of financial planning for a small business. We'll discuss budgeting, forecasting, cash flow management, and other essential elements of financial planning that can drive your business toward financial success.

Basics of Small Business Financial Planning – Transcript

So you have an idea for a business. And you may even have some idea of how much money you want that business to make you. And you've done some research into figuring out if your business idea has legs. But how do you know if your idea is going to work? Not to worry — we're going to cover that in this video. 

Hey, everybody Will Scheren here from Small Business Startup Guide by TRUiC. This video is part of a large course dedicated to helping small business owners cut through the noise and get to the essentials of starting and operating their business. If that sounds like it would be really useful to you, be sure to like and subscribe. 

When you think about putting together financial projections, it's not exactly the most exciting part of launching a business. Entrepreneurs generally focus on the big ideas and less on their execution. While the nuts and bolts aspects of a startup, such as setting up an accounting system, might not be spine-tingling, they're essential. 

While writing a business plan, you'll be forced to consider how you'll run every aspect of your business: marketing, managing, finance, and more. Formal financial projections will help you assess the feasibility of your idea. It'll help you conduct research on your target market and give you an idea of the competition landscape of the market that you're planning on entering. It forces you to think through all of the aspects of your startup. It highlights potential problems that you may have otherwise not considered, prepares you to capitalize on unforeseen opportunities, and helps you explain your concept. 

But since a well-thought-out business plan is a rather extensive document, it can be difficult to iron out. Before writing a business plan, It's good to have an idea of how much money you want your business to make you, as well as an idea of the type of business that you want to start. If you need help figuring out how to do that, you can check out the previous videos in the course. But if you have an idea of the business that you want to get into and how much money you'd like for that business to be providing you, then it's time to figure out a plan to make it work. 

The best place to start with building a business plan is your financial forecasts because they'll help you determine the feasibility of your idea as being able to satisfy your goals. A professional financial forecast consists of planned revenue-generating activities, direct costs associated with each sale, the cost of any personnel needed for your business and other business expenses, your plan for the acquisition of major assets that are needed to run your business, tax considerations, and an explanation of how cash will enter and leave your business, including dividend payouts and financing. 

After considering all of these aspects, the financial forecast for the business should be put into three documents. A projected profit and loss statement, a projected balance sheet, and a projected statement of cash flow. The profit and loss statement will help you understand how your business is set up to be making money each year. A balance sheet will help you monitor how large your business is growing and how you manage risk in your business. And the statement of cash flow will help you ensure that you never run out of cash for your business. 

If this all seems a little intimidating to be considering at the beginning of your business journey, not to worry. The software available at will help you with each of these considerations at exactly the right time. It practically gamifies the entire business planning experience, and it has tutorials each step of the way If you have any questions. With LivePlan, you can get your business plan written in a matter of hours and be prepared to meet with potential lenders or investors to discuss your business plans. 

We've reached out to LivePlan and secured a 35-day money-back guarantee with a special discount for anyone moving through our business course. To get access to the discount, just click the link below this video. 

If you plan to move along with us through this course for your business, we suggest going ahead and getting a user account with LivePlan now. As we move through the course will only be using the tools available in the standard plan, but if you're planning on using LivePlan to pitch your business to potential investors, you may want to check out their premium options. 

Later in this section, we'll be putting together financial forecasts for the barbershop that we're creating using

At TRUiC our mission is to offer all our resources and information for free - but we support our work by using affiliate links, meaning we earn a commission on many of the amazing deals we’ve negotiated for you. Full transparency, is one such affiliate partner. Link in description below. 

After completing your financial forecasts, you'll be ready to write a pitch deck for any preliminary meetings that you need to have for your business. 

The pitch deck should identify the problems that you solve for your ideal customers, how your business is uniquely poised to solve that problem for them, and provide population and demographic information about your target market. It should make notes on the competitive landscape and describe what you'll be doing to distance yourself from the competition. It should discuss funding needs and what you would be using those funds for. It should describe the sales channels that you'll be using to provide your products and services to your target market, describe your marketing plan for attracting attention and converting your audience to customers, include highlights from your financial forecast, and a list of the milestones that you plan to hit, and when you plan to hit them to keep your business on track to meet your mission. And finally, it should introduce the key team members in your business and note any key partners that you've established. 

After compiling all of this information, you'll be amazed at how much more prepared you feel to get started with your business, and you'll come out of this exercise on the other side confident that you're ready to meet your operational mission or you'll know to revise it into a goal that you feel confident that you can achieve. In the next several videos, we’ll be breaking down these decisions as we fill in some business planning blanks on for our imaginary barbershop. 

This video is part of a step-by-step course that provides business owners all of the essential information to start and operate their business. We've provided a link for you to get access to all of the free and discounted business tools we mentioned in the course below this video. 

Be sure to like and subscribe to get more of this content. We'll see you in the next video, and if you have any questions, let us know.