6 Tips for Financial Planning During COVID-19

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While we may only be 8 months into the year, it's been quite a rollercoaster so far. From being forced to close down your business abruptly to learning how to navigate these new waters while keeping your business afloat, it's been a trying time for all. The businesses that survive and thrive over the coming months will do so for many reasons, but one thing they will all have in common is good financial planning and forecasting.

From a business perspective good planning and forecasting can help mitigate risk by assessing what the likely financial ‘pinch points’ might be over the coming weeks and months. Financial planning is simply looking at your business for the year ahead and forecasting an estimate of your future income and expenses, which will ultimately help keep your business on track during these unpredictable times.

My top 6 tips to help get you started…


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  1. All businesses can forecast. If you know what your weekly and monthly costs are, you can calculate what your minimum sales levels need to be in order to break even. Anything on top of that is a bonus.
  2. Start with the easy numbers first. Use your financial reports from last year as a guide for this year.
    • Start with the easy number first. These are the fixed costs that probably won’t change, like ‘Rent’ and ‘Payroll costs’ that are based on the current staff numbers.
    • Next, include an estimate for all the remaining operating expenses based on previous year's financial records to establish a forecast of the year ahead.
    • Finally, as you are working through the numbers, look for every opportunity to reduce expenses.
  3. Cash flow budget. Develop a 13-week cash flow budget if you don’t already have one. Either do it yourself or ask your accountant to do it for you. The cash flow budget will allow you to always see in real-time what the predicted expenses and outgoings are and alert you to any pinch points before they happen.
  4. Set financial goals. These goals might be about setting aside a fixed amount as a cash buffer in the bank in the event that you are closed down again. Or, they might be about reducing debt levels, achieving a specific profit target or achieving sales revenue targets. Whatever they are, be realistic with your goals as the future is uncertain.
  5. Review your forecasts at least every week. By reviewing your forecasts weekly, you can update them or make changes to address any negative trends.
  6. Use your accountant. At time like this your accountant is an invaluable resource to guide you through financial planning and any government aid that you may qualify for.

Make this the time that we learn from our past mistakes and start to put financial systems in place that will not only help us navigate the road ahead, but also to set us up as successful profitable businesses for the future.