The importance of a business plan

Creating a financial plan for the coming period takes time, but what we know for certain is that reality looks a little different every month. What then are some good reasons to still dedicate time to this task?

1. Part of a business plan is gaining insight into expected income and expenses, which results in a cash flow forecast. Even if cash is not a bottleneck, it is useful to know what your expected bank balance will be per month, especially if there are seasonal fluctuations.
2. You can communicate the monthly objectives to the various departments in the organization, so they can align procurement, production, and sales accordingly. It also gives them better insight into if and when they need to expand their team, or in a negative scenario, scale down.
3. If a new investor joins or if the organization is being prepared for sale, the new investor or buyer will want to see a business plan.
4. If you want to apply for a loan or business credit, the financier will request a business plan.

Smartbooks ensures that the business plan is no longer kept in Excel but is recorded in the system. In this way, changes in assumptions are immediately recalculated in Smartbooks, and the comparison between actual figures and the forecast is always up-to-date.