Financial planning is at the heart of every successful business and should be considered a priority, according to financial consultants at Lakeland Bank. Small businesses regularly write sales and marketing plans but may overlook the financial plan.
“Even a one-person entity needs a financial plan,” said Jeffrey J. Buonforte, executive vice president of Lakeland Bank and a CERTIFIED FINANCIAL PLANNERTM. “A financial plan allows you to compare forecasts to actual results and to make smarter decisions on future spending or investments.”
“Financial plans are especially helpful in tough times, such as when a business loses a large customer or confronts a challenging economy,” added Buonforte. “If you have a good handle on the finances in your business, it’s easier to make adjustments to respond to those situations.”
The Small Business Financial Checklist
Lakeland Bank suggests the following steps for small business financial planning.
§ Put financial support in place. Hire an accountant or bookkeeper. Determine if you need a treasurer or board finance officer or committee. Choose a trusted financial advisor and bank.
§ Create a financial plan. List your income and expenses, including projected figures for the year to come. Plan to revisit the document quarterly so you can compare forecast numbers to actual results and prioritize expenses accordingly. A quarterly review also will give you a seasonal perspective on your business.
§ Determine your tax strategies. This is how you are going to manage your taxable income.
§ Set up a retirement plan and employee benefits. A competitive benefits package is key to attracting good employees.
§ Get a valuation on your business. This is the value of your business, should you be in the position to sell. You can also use business valuation in securing credit and loans.
§ Protect your business with an insurance policy. This precautionary measure can be a valuable safety net if the need arises.
§ Create a succession plan. A succession plan increases your business’s worth to a potential investor.
“Consult a financial advisor at a bank to help you create a financial plan,” advised Buonforte. “This will also be beneficial if the time arises when you need a loan or line of credit, because you will already have established a relationship with a bank.”
About Lakeland Bank
Lakeland Bancorp, the holding company for Lakeland Bank, has an asset base of approximately $2.7 billion and 47 offices spanning six northern New Jersey counties: Bergen, Essex, Morris, Passaic, Sussex and Warren. Lakeland Bank offers an extensive array of consumer and commercial products and services, including online banking, localized commercial lending teams and 24-hour or less turnaround time on consumer loan applications. For more information about the bank’s full line of products and services, visit their website at LakelandBank.com.