How Strategic Financial Planning Can Help You Scale Your Small Business
Effective financial planning is one of the most powerful tools in ensuring the success of your small business. Having solid financial plans in place increases the likelihood of long-term growth.
Not sure where to start? Here are some examples of strategic financial planning that can help scale your small business.
Cash Flow Forecasting
Cash flow forecasting is the process of projecting the future cash inflow and outflow of a particular business to predict the overall cash balance of a specific period. This can anticipate any slow periods and high-expense months. Cash flow forecasting generally involves reviewing past financial performance and current cash positions, estimating future cash receipts based on business operations and sales, and applying the findings to make strategic financial decisions. The process also prevents cash shortages by identifying potential deficits in advance, allowing business owners to be more proactive in their financial decisions.
Tax Planning & Optimization
Small business owners can structure their business in a way that minimizes tax liability. They can leverage deductions and accurately time large purchases. Planning ahead of time reduces the risk of negative financial impacts once tax season rolls around.
Building an Emergency Fund
A crucial aspect of owning a business is preparing for potential hurdles that may impact its overall success, regardless of how unlikely they may seem. It is crucial always to have a backup plan in case things go south. One strategic financial plan that can help your business in the long run in the event of an emergency is setting aside a certain amount of revenue every few months. That way, if your business ever starts going under, you’ll be financially prepared.
Our experts at JTS Associates CPAs know that these strategic financial planning tips not only help businesses survive but also thrive. Contact us today for more advice on financial planning.
