First off, what is financial planning? Financials can be thought of as financial statements, budgets, and money. Planning can be thought of as preparation, arranging, and looking ahead. Together, financial planning means the preparation of your finances for the future. Yes, but I already do that for my personal finances with my monthly budget, retirement plan, and loan payments – why would I need financial planning for my small-medium enterprise (SME)? Well, according to Statistics Canada

  • 1 in 7 small businesses are facing financial constraints due to the Covid-19 Pandemic
  • Small businesses are more likely to expect insufficient demand for goods or services offered
  • Only two-thirds (66.9%) of new businesses survive to see their fifth year of operations

Why you need a financial plan

Putting it lightly, financial planning is the key to your business’ success. Financial planning for SMEs helps achieve short-term and long-term business goals. A few simple goal examples include:

  • Doubling your revenue in five years
  • Hiring a new employee in six months
  • Launching a new product or service 
  • Paying off your $40,000 BDC Loan in one year

Let’s take ‘paying off your $40,000 BDC Loan in one year’ as an example. Sure you can take a look at your current revenue and decide to pay down a certain amount every month, but without a financial plan you will be left guessing your cash flow and balance for the year ahead. Can you afford to pay $3,333 per month? Will there be enough funds left over to pay salaries, or even unexpected expenses?

Through financial planning, you are able to take charge of your business’ finances and know the factors that will directly affect your revenue. Manually doing the math to create a financial plan that factors in all the variables is possible, however there is an easier way.

Start planning

Here at Chartd we’ve created a user-friendly online interface (currently free – yes free) so that SMEs like yourself will not only survive, but thrive. By using Chartd you will be able to create sound financial plans using our model, no matter the industry or your financial literacy. Simply punch in a few numbers and evaluate your options no more guesswork. Whatever your goal is, Chartd allows you to be in full control of your company’s financial future.