It’s a fact: for your business, whatever its size, to succeed and take advantage of growth opportunities, it is essential that you plan your finances well.

Financial planning is designed to project your company’s revenues and expenses and track your business’s economic situation so you can choose when, how and where to direct available resources. It is the basis for showing where the company is and what paths it can take.
Without planning, in addition to losing investment opportunities, the entrepreneur would run the company blindly and would have to deal with unforeseen events at all times, reacting with attitudes that would not be the most appropriate. That is why, as complicated as it may seem, it is important to keep track of your business accounts. After all, this task is just as important as ensuring sales.

So that you can organize yourself properly, here are four tips, one for each week of December before the end-of-year holidays. Shall we begin?

Week 1: Separate personal life from business finances

According to consultants, many entrepreneurs combine personal and business finances, and this is especially common among small business owners. If this is the case for you, then the first step is here.

Examine all expenses, both personal and business, and direct each one to the right place (if you have already done your personal financial planning, this will be much simpler).

Week 2: Prepare the cash flow

This task is the main, and often the most time-consuming, task in preparing your financial planning. But don’t worry, because you’ve already gotten a head start on the work the first week, when you’ve separated business expenses from personal expenses.

Cash flow is a control tool for the entire financial movement of the company. It is knowing how much money comes in (and where it comes from), how much goes out (and where it goes) and when exactly these movements occur. But it has to be complete and really consider all the activities of the company, including future movements.

Week 3: Be disciplined about planning

Strictly monitoring your cash flow is what will allow you to start, with the necessary security and preparation, for the planning phase. Keep in mind that this requires discipline and effort, like any key business task. In this monitoring, you will pay attention to important indicators such as revenues, costs, nominal profits, profit margin, working capital, debts and others. This attention is essential so that you can identify opportunities for improvement, ways to reduce costs, improve sales, increase revenues, etc. And this is precisely the beginning of financial planning.

Week 4: Project different scenarios and make adjustments

The last step is to use your market knowledge and management skills to envision different possible scenarios.

Project at least three scenarios: one realistic, one optimistic and one pessimistic. By doing so, you will already anticipate the adjustments that will be needed as time goes on.

And not only that. The very exercise of projecting the optimistic and pessimistic scenarios already produces good immediate adjustments to the realistic scenario you have sketched, making it even more flexible and useful. It is the realistic scenario, after all, that you must pursue.