Growing, expanding or even selling a business involves specific planning, but they all depend on one thing – healthy business finances. For this, you’ll need a separate plan.
Financial planning for your business not only supports its success and growth, but can also help you achieve your personal lifestyle goals.
Find out the three key reasons why you should consider it.
Do you know how much your business is worth? If you’re unsure or if the number isn’t as high as you think it should be, financial planning can help you make your business more valuable so that when you do sell it, you get the price you need.
Build the value of your business by demonstrating:
Show that your services or products are better than your competitors’, and that you’ve adopted a unique selling proposition (USP) for each of them.
Show them a strong current and past financial performance, and other details that will showcase your business’ value.
You should have a diversified client and customer base, have cross-trained employees, and have set your business up to be able to run without you should the need arise.
You should have quality annuities and/or investments in place that generate passive cash flow each month. If you don’t have them, establish them now.
Even if you’ve never given thought to leaving your business, the time will come when you will – and you’ll need to plan for your exit. Good financial planning gives you:
You’ll have control over the way the exit happens, instead of having to scramble to figure out what to do next.
With good financial planning, you can slowly ease out of your participation in day-to-day activities. Enjoy freedom from your business – before you retire.
Planning ahead gives you the means to make your exit as smooth as possible – both for you and for your employees.
Financial planning gives you time to prepare for your exit so that you can build value, prepare the business for sale and plan for anything unexpected, such as your own inability to work.
Perhaps most importantly, working with a financial planner can help you figure out your lifestyle goals, be they early retirement, a new business venture or simply more time for your family.
Taking these goals, he or she can then work out a plan for your business finances that can support them, giving you a defined plan towards the life you really want.
Do you agree? Are there any other benefits of financial planning for businesses? Let us know in the comments.