The team here at McNabb Lucuk LLP in Grande Prairie believe that the backbone of any successful Canadian small business is a solid financial plan. In this blog, we explore some of the many sides of financial planning when it comes to your business. A financial plan is not just a document filed away in a folder somewhere, it’s a constantly evolving process that begins with a goal and a plan to get there including risk mitigation strategies, followed by monitoring and analyzing progress then implementing insights and adjusting the plan as needed.

Make a Plan 

  • Budget: A budget is a great first step when it comes to your financial plan. Include forecasted revenue,  ongoing and capital expenses and options for cash flow. 
  • Taxes: Once you know your expenses, consider what deductions or tax credits are available to your business. Different costs are expensed differently. Consult with a Charter Professional Accountant for advice related to your industry, including asset depreciation.  
  • Risk Mitigation: Insurance policies and contingency plans are recommended to reduce liability costs and to address unknown set backs, including natural disasters and political challenges. Create or explore diversification opportunities to create multiple revenue streams or alternative operations.
  • Investments : Forecast the Return on Investment (ROI) for any major investments into your business. Plan for those accordingly by putting them in your timeline and budget then explore the financing options available to you. 
  • Retirement: At some point, most business owners choose to sell, close or pass along their business to retire or start a new venture. You’ll need to plan for this step, which may include contributing to a registered retirement plan from your business, and transferring or selling ownership. Each of these have their own financial and tax implications.   

Understand the Numbers

  • Bookkeeping: Be diligent about maintaining accurate and up-to-date bookkeeping. The day to day recording or transactions is the first step in creating valuable financial information that can be used for decision-making and tax reporting. 
  • Financial Statements: Review your income statement, profit and loss statement and balance sheet regularly. These essential financial statements provide vital insights into the financial health of your business. Seek insight from experienced professionals to discover trends, potential issues, and opportunities to make more informed financial decisions. 
  • Budget Tracking: Compare your projected budget to your actual finances throughout the year. This can help you identify earlier when cost-saving strategies are required or to discover areas to focus on revenue growth. 

Implement Knowledge

Businesses that analyze financial reports more frequently may notice trends and respond sooner to improve the financial health of their corporation. 

Using cloud based software, like Quickbooks Online, today’ s modern business owners can quickly access transactions and financial reports from a smart phone, tablet or laptop using an internet connection. These services can often provide financial dashboards and AI driven analytics to provide an instant snapshot of an area of your business finances, from taxes outstanding to accounts receivable. 

It’s important to note that while technology is valuable, it does not replace the insight and guidance provided from a professional. Having a Chartered Professional Accountant on your financial planning team can provide a comprehensive view of your finances while also offering information on changes to tax laws and regulations or finding custom solutions for your situation. 

Take the next step in your business’s financial plan and contact the team at McNabb Lucuk LLP for personalized accountancy services and advice.