How to Create a Financial Plan for Your Business? – Dylan de Blaquiere

If you are planning to apply for a business financing, such as taking a loan, then the lender will most likely ask you to show a detailed financial plan before finally agreeing to issue the loan. Or, if you are planning to grow your business, and would like to scale the growth and set future goals, then a detailed financial plan might help you make more solid decisions. 

Dylan de Blaquiere explains that in both cases, having a detailed financial plan is the key. A detailed financial plan can become an important report for your business and can help your business grow much faster. 

If you are wondering how to make a financial plan for your business, then sweat not. In this article, Dylan de Blaquiere explains how to create a financial plan for your business. 

Creating a Financial Plan 

According to Dylan de Blaquiere, regardless of the type of business you have, there are three major components you will need to create a strong and precise financial plan. These are: 

  • Balance Sheet

  • Cash Flow Projection 

  • Income Statement 

Let us look at each of these individually. 

Balance Sheet 

The Balance Sheet for a business is a statement that outlines all of the assets, liabilities, and any equity the business or the owner holds. Most business owners have assets into two categories, which are current and fixed. 

The current assets include the amount of cash a business has available as well as the debt the business has, such as outstanding invoices, whereas the fixed assets include tangible things that a business may own, such as land, property, and equipment. There is also a third category known as intangible assets, which typically refers to copyrights, patents, and intellectual business property. 

Cash Flow Projections 

As the name implies, a cash flow projection is a report that forecasts how much money flows in and out of your business account. These projections are considered as highly reliable indicators of whether your business can afford certain aspects or not, which is a vital part of any financial plan. 

Cash Flow projections typically are focused on three elements mainly, which are: 

  • Cash Revenues 

  • Cash Disbursements

  • A reconciliation of cash revenues to cash disbursements 

Cash revenues refer to how much money your business makes on a monthly basis, cash disbursements are your businesses monthly expenses, and reconciliation of cash revenues to cash disbursements can be calculated by subtracting cash disbursements from cash revenues. 

Income Statements 

An income statement is simply an itemised outline of a business’s expenses, revenues, and profits determined for a specific period. Most established businesses create income statements usually on a quarterly or annual basis, but many new businesses create income statements on a monthly basis. 

Typically, income statements include the following information: 

  • Revenue 

  • Expenses

  • Total Income 

  • Income Taxes

  • Net Income

With this information from an income statement, Dylan de Blaquiere explains that a business can calculate the total revenue generated, and expenses such as direct, general, and administrative, total income which is your revenue minus expenses, taxes including both state and federal taxes, and the total income after the expenses and taxes have been subtracted. 

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