3 smart reasons why you should get over your fear of financial business planning
Have you ever heard anyone pitch their business idea without any level of excited enthusiasm?
I bet that you, like so many of the entrepreneurs we speak to, have an exciting business idea in mind. I bet that you’ve pictured its success, too.
Most budding entrepreneurs believe it’s best to invest some time and resources into completing their business plan before setting out on their incredible journey.
Getting your thoughts down into a logical and coherent plan allows you to visibly plot your way forward, building excitement as you go.
That is, until we get to the financial plan. Perhaps this is when the sparkle fades from your eyes… Fear of business financials can drive many aspiring entrepreneurs into completely ignoring this vital part of business planning.
But there are some pretty good reasons to prioritise the financial plan:
- For the most part, ‘financial planning fear’ is irrational.
Some of the fear can be due to a knowledge gap, especially when it comes to the various accounting documents involved in the financial plan. However, completing a successful financial plan doesn’t take rocket science. It merely requires an understanding of the core element that makes every business tick - the money.
- A little (not-so-secret) secret, is that if you’ve prepared your business plan properly, the financials will take care of themselves.
It’s a bit like baking a cake: the business plan is your recipe, giving you a clear idea of the specific ingredients you need and their required quantities. The business plan needs to be driven like a cake needs to be baked, and the financial plan is what will help to drive the business forward.
- Lastly, and perhaps most importantly, the financial plan is often neglected because it’s so revealing.
It tells the prospective business owner whether the venture is doomed before it’s even begun. And nobody wants to face this when the excitement of starting a business is so tantalisingly fresh.
Business ideas are essentially like children. You birth them, invest time and emotional energy in them; you desperately want to see them succeed and flourish. It’s also incredibly difficult to assess them objectively and without emotion. But this is exactly what’s required – we must remove ourselves emotionally, from the business idea, to interrogate the viability and sustainability of the plan.
Preparing a sound financial plan enables this sort of assessment, making it possible for you to establish:
- How much money you’ll require upfront
- Where you’ll get this cash
- How much you’ll need to spend, monthly
- What you’ll need to spend it on to be able to run the business
- How much income you’ll realistically be able to generate
- How long it will take you to repay loans (and more)
You’ll know, quickly, whether the assumptions you’ve made in your business plan are correct.
All too often businesses that start without a detailed financial plan run into financial difficulties. And this could have been avoided if the business owner had planned all the elements – including the financials - from the get-go.
So, take a deep breath; put your fear aside and let’s work through the financial plan of your business idea so that the dreams you have for your business become reality!
We’ve walked this road before, with entrepreneurs like you, who have big business dreams. We’ll give you the resources you need, and help you build the knowledge and skills required, to start your own business successfully.
Join us at Hola Business to get over any fear of business planning!