October 15, 2022

What are the Main Components of Financial Planning?

No matter the goals or milestones you and your company are aiming to achieve, it is only possible through the act of proper planning. Financial planning is perhaps the most important element in any company or brand, big or small. 

Consider this blog as a ‘How-To’ guide to learning the main components of financial planning — helping you and your company navigate both short and long-term goals. 

Understanding Financial Plans 

Financial plans can look different for each person or company. This is dependent on factors such as company size, business value, marketing or financial strategies, and even the particular industry in which you’re operating.  

Nonetheless, a financial plan is designed to give a general overview of the company’s financial situation and business goals, subsequently strategizing ways to achieve them. 

Any financial plan will begin with a thorough analysis and evaluation of the entire business. This includes its current financial state, as well as expectations within the company and from the industry in which you’re operating. This often means calculating the company’s net worth using a business valuation. 

When it comes to structuring a financial plan for you or your company, it’s important to keep the plan comprehensive to overall goals while reflecting any outcome situations, risk tolerances, or future expectations that may occur. 

Steps for Establishing a Financial Plan 

While the process and intended results of a financial plan may look different for everyone, there are a few fundamental steps and tips that can help you kickstart your plan and navigate through your company’s insights and worth — seamlessly: 

Identifying Budgets & Cash Flow

If you don’t track this already, try logging your company’s monthly costs and spending patterns. This will help you identify where your budget is going each month, while helping break down areas where you can begin to further save and expend. 

Having an approximate estimate of your monthly and yearly expenses can help you recognize spending patterns and make adjustments accordingly. 

Tip: Create financial logs/reports of your spending budgets and cash flow each year, so you can track your company’s progress over a period of time. 

Assembling Assets & Liabilities

Listing a company’s assets and financial liabilities in a balance sheet is a foundational element in your business’s overall financial plan and net worth. 

Assets include valuable items or property that your company has ownership of. Liabilities include any outstanding or recurring debts and charges your company faces, such as credit card bills or monthly business fees. 

It’s helpful to keep track of this information thoroughly, as there can be new or updated assets that pile onto your company throughout each year. 

Creating a financial plan that includes both your company’s assets and liabilities in its report is a transparent strategy to show your overall profits and losses over the course of time. 

Tip: The formula for your company’s current net worth is the total assets minus the total liabilities. 

Predicting Financial Projections 

So you’ve organized and broken down all of your company’s financial spending, budgets, and assets. Great! You can now create a clear and concise financial plan and long-term goals. 

Considering the goals for the company, look at the monthly and yearly costs and determine what will be needed moving forward to make these goals happen. 

Tip: Create predictions for both optimistic and pessimistic outcomes of these goals so you and your business can fully anticipate what is ahead. 

As you can see, financial management helps you have a wide overview perspective and insight into your company. This is in addition to helping you clearly identify and establish strategies and financial plans for your business. 

SevenBridge Financial Group: Helping You Manage a Solid Financial Plan! 

Building a financial plan for you or your company can certainly be a complex and detail-oriented process. It certainly requires time, insight, and careful analytics.

At SevenBridge Financial, our team of advisors is here to help you design financial strategies that are proactive (not reactive) to all outside factors. We believe that financial decisions can be made with confidence. 

With a firm grasp on the financial basics of your situation, we take a deep dive into any concerns, challenges, and desired company goals. This is in efforts to assist you in determining the components of financial planning that would serve you best. 

Contact us today with any and all questions about our various services, our unique process, or how to get started with a project to help you achieve your business dreams! 

SevenBridge Financial Group is a registered investment advisor. Advisory services are only offered to clients or prospective clients where SevenBridge Financial Group and its representatives are properly licensed or exempt from licensure.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

For additional information, please visit our website at sevenbridgefinancial.com

For current SevenBridge Financial Group information, please visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with SevenBridge’s CRD #281037.

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