Tim Berry

Planning, Startups, Stories

Tim berry on business planning, starting and growing your business, and having a life in the meantime., the lean business plan for small business owners.

“What? No, I don’t have a business plan. I’m not a startup.”

Too bad so many small business owners think that way. A good lean business plan for small business owners ought to be a great tool for running a business. Set strategy, tactics to match, major milestones, metrics, tasks, responsibilities, and essential business numbers. Keep it lean, review and revise it every month, and you’re way better off. Whether you’re a startup or an ongoing business. Just like planning a trip makes the trip better, so too, planning a business makes the business better.

That myth of the business plan for start-ups only gets in the way far too often. If you own or run a company, you probably want to grow it.  And if you want to grow a company, then you want to plan that growth. And the planning is only the beginning; you want to use the full planning process to manage growth.

Think for just a minute about how many different reasons there are for an existing company to plan (and manage) it’s growth. There’s the need first of all to control your company’s destiny, to set long-term vision and objectives and calculate steps to take to achieve vision. Without planning the company is reacting to events, following reality as it emerges. With planning, there’s the chance to pro actively lead the company towards its future.

For an existing company that wants to grow, planning process is essential. Everybody wants to control their own destiny.  The planning process is the best way to review and refresh the market and marketing, to prioritize and channel growth into the optimal areas, to allocate resources, to set priorities and manage tasks. Bring a team of managers together and develop strategy that the team can implement. Work on dealing with reality, the possible instead of just the desirable, and make strategic choices. Then follow up with regular plan review that becomes, in the end, management.

This normally starts with a plan.  The plan, however, is just the beginning.  It takes the full cycle to make a plan into a planning process. Here’s my view of the business plan for small business owners:

Core plan-900W

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Small Business

New Year's Planning for Business Owners

Make a resolution to review these six areas of your operation

At the beginning of every new year, it's a good idea for business owners to take time to sit down and do a little planning, to make sure they can keep their company afloat and on the right course going forward.

Doing so can help ensure that your business has the necessary tools to meet its financial and operational goals and that your valued employees will be content with their working environment and unlikely to jump ship.

Read on for some tips on a smooth planning process for your digital presence, vendors, equipment, employees, insurance, and retirement plans.

Key Takeaways

1. Consider Your Digital Footprint

Set up a business website.

If you want to compete, especially with the big names, you need a presence online and in social media. Begin by planning a website for your business, if you don't already have one. How complex it has to be and how much traffic you need to generate will determine whether you can set it up yourself or should hire a professional to do it for you.

Here's a basic checklist for this task:

Develop a Social Media Presence

These days a social media presence for your business is essential. If you're not already, become familiar with platforms such as Facebook, Instagram, Twitter, Snapchat, LinkedIn, Pinterest, YouTube, and TikTok.

Try to define the audiences that they serve and select those that match your customer profile. For example, certain age groups may focus on Facebook while others may prefer TikTok. Most platforms will offer advertising kits, demographic data, and more to those interested in using their sites for sales and marketing purposes.

If you're unsure of how or where to start building your social media presence, there are services that can assist you. You can also hire individuals or firms to help you maintain that presence, if that's not your strong suit or you simply don't have the time to devote to the effort.

If you decide to be hands-on, create a social media team within your company to plot your online strategy for reaching potential patrons. This team should define your audience and its interests and how to reach it with existing content or newly created content. Blogging, vlogging (video blogging), and podcasts are just some of the ways to market your business and reach prospects and customers.

Every business owner should periodically review their vendors and suppliers to make certain that they are receiving the competitive prices and quality service that they need. The beginning of the year may be the best time for such a review.

In many cases, vendors will be working on their own budgets for the year, looking to pin down business, and open to cutting deals to ensure that they achieve their quarterly and annual financial objectives.

With that in mind, business owners should ask themselves the following questions:

Business owners with an eye on their bottom line want to know whether they're getting the best possible products and services at the lowest possible prices. The first few months of the year are an opportune time to take stock of this.

3. Equipment

Manufacturing companies and many service-related businesses depend on machinery, supplies, and a variety of other equipment to operate. However, many business owners are so focused on day-to-day activities that they forget to make sure they have what they need to operate smoothly and grow their enterprise.

Early in the first quarter is a good time to evaluate equipment needs and to determine whether any new capital investments are in order. This type of planning can ensure that your company is always properly equipped to capitalize on business opportunities. It can also help you allocate needed cash or arrange for borrowing.

Here are some questions to consider for equipment needs:

4. Employees

Your planning should also consider your staffing needs. It's advantageous to uncover any deficiencies early on in the year, so that you can make the appropriate adjustments.

Also, bear in mind that finding, hiring, and training the right person can take a lot of time. So it helps to get started as soon as possible. That can be especially true when a low unemployment rate and hot job market mean that potential employees may receive multiple job offers.

Finally, it's important to realize that many employees ponder their own futures at the end of the year. They may start thinking about whether they intend to stay with your company or move on. If they choose the latter, you'll want to be ready to deal with the consequences.

5. Insurance

Though the old adage says that the best defense is a good offense, sometimes the best offense is a good defense. Simply put,  insurance coverage is a business necessity.

At the beginning of the year, new rates for health insurance , business liability insurance , automobile insurance, umbrella policies , and other types of insurance tend to go into effect, so it's an opportune time to go quote shopping.

Be sure to consider the following questions about your insurance:

6. Retirement Plans

Businesses that want to set up a 401(k) , simplified employee pension (SEP) , or other retirement plan should do so as early as possible during the year. Setting up a plan early can permit employees to take full advantage of their annual allowed pretax contributions and the tax advantage offered by qualified retirement plans. The longer their money can grow on a tax-deferred basis, the larger the nest egg they can potentially accumulate.

Reviewing the various plans, selecting an investment firm, and actually setting up a plan doesn't happen overnight. Getting an early jump on these efforts makes sense.

Here are some questions that can assist your planning:

Why Is Planning at the Start of a New Year a Good Idea?

Fiscal years often begin with the new year, so reevaluating and making any necessary changes at that point gives you the maximum benefit across the next 12 months. It also gives participants in retirement plans the opportunity to maximize their savings.

Which Areas of My Business Should I Look At?

Six important areas to consider are your online and social media presence, vendors, equipment, staffing needs, insurance, and retirement plans.

How Will Rising Inflation Affect My Business Outlook?

No one knows for sure whether inflation will rise or fall. But you'll want to factor it into your financial planning. Among other things, inflation could affect your borrowing costs, the prices you pay for supplies, and the salary expectations of your employees. You'll also need to weigh whether to raise your own prices and by how much, as well as the potential impact that might have on the demand for your products or services.

Business owners should continually evaluate their businesses and make adjustments accordingly. However, from a number of angles—such as insurance, retirement plans, staffing, vendors, and equipment needs—the beginning of a new year is a particularly opportune time to examine aspects of your business and plan decisively.

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Home / Expertise / Law for Families & Individuals / Personal Planning for Business Owners

Personal Planning for Business Owners

What clients say.

Securing Your Business

As a business owner having a business continuity plan which clearly states what would happen in the event of the unexpected death of you or a co-owner, is crucial to ensure the future of the business and to make sure your family is provided for in unforeseen circumstances.

Personal and business planning are intertwined, and it is important that a personal Will works in harmony with the succession plans for the business. A simple Will is unlikely to do the job. In the event of the unexpected death of a business owner, the Will and company paperwork need to make certain that the management and control of a business are not disrupted. The Will should also safeguard the value of business assets for the beneficiaries, separate from the estate, so they benefit from relief on Inheritance Tax.

Our specialist Private Client lawyers advise on Wills and Powers of Attorney for shareholders and their spouses or partners, cross options and relevant shareholder agreements, and work closely with business owners to implement appropriate legal changes to company or partnership documents in the event of a death.

We advise on:

Business Succession

Succession planning is integral to business plans and wealth preservation, and our experienced Private Client team understand the issues facing you when thinking about succession in the case of a family business.

Tax, business and estate planning should all be taken into consideration when considering multi-generational ownership and our specialist team can provide advice on tax-efficient wills and effective structures to secure the future of the family business.

We work closely with other professionals such as commercial lawyers, accountants and financial advisers to provide a joined-up approach for effective planning for the future, for the benefit of your family and the family business.

Personal Planning

You can avoid paying unnecessary inheritance tax, with some timely forward planning to make the best use of the exemptions and relief provided for in tax legislation.

Business owners can qualify for generous tax reliefs from inheritance tax and our team of expert Private Client lawyers can advise on the likelihood of securing business property relief and how you can put yourself in the best possible position.

Our team of specialist tax experts can help ensure you increase the tax efficiency of your business and reduce your personal tax exposure as well as providing advice if you are considering selling or passing on shares in your business during your lifetime.

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No matter which life cycle stage your business is in, the crucial decisions you make each day may have far-reaching impacts on your business. Protect what you’ve worked so hard to build by having the right plans in place to help achieve your goals and prepare for the future.

As an RBC Wealth Management client, you have access to a range of services and potential solutions catered to your needs and those of your business or corporation. Your dedicated advisor and our team of specialists work alongside your professional tax and legal advisors to consider and implement planning that fits your objectives.

Solutions for your business needs

Your planning decisions can be multifaceted and complex, requiring in-depth expertise. RBC Wealth Management can help you at every stage of your journey—from business structure, tax considerations and planning for the unexpected to succession and transitioning into a well-funded retirement.

Our business owner planning services and solutions may be ideal in areas such as:

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As markets, investment needs, and even tax & estate planning considerations evolve, many Canadians are finding business ownership more complex than ever. We offer tax & estate solutions, insights, and tools for every phase of business ownership.

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Create a succession plan to maximize inheritable assets, while reducing conflict amongst beneficiaries.

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Create a tax efficient estate plan that reduces taxes and maximizes inheritances for your beneficiaries.

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Financial Management

9 Financial Planning Tips for Small Business Owners

David Luther

Starting a small business can be exhilarating and overwhelming all at once. It’s tempting to devote the lion’s share of time and effort to developing your product or service, hiring the right people and finding customers. But it’s important to carve out some time to tend to the financial health of the company. It’s similar to how airlines recommend attaching your own oxygen mask before helping others: You can’t fulfill your customers’ needs or empower employees if you suddenly find yourself in a liquidity crisis.

What is Financial Planning?

Small business financial planning is an ongoing process. Your objectives: Develop short- and long-term business and fiscal goals and tactics to achieve them. Do some scenario planning to understand the financial barriers that can arise at every stage of growth, and consider your options in terms of funding sources.

While many aspects of small business financial planning are similar to handling personal finances — think creating a budget, risk management, tax and investment strategies and retirement and estate planning — there are some important differences.

1. Separate business and personal goals.

Blurring the lines between personal and business goals could mean compromising some aspects of your finances for another. Perhaps you want to add a new product to your inventory but also want to add funds to your child’s 529 plan. Which takes priority?

Of course, you’re building the business to make money to forward your personal financial goals. But if you don’t distinguish between personal and business objectives, you may end up hurting both.

We’re not just talking about separating your finances, including having separate checking accounts, for example — though that’s also critical, as we’ll discuss. We’re talking about visioning and goal setting. Ask yourself:

2. Explore your funding options.

Small business owners tend to self-fund, or bootstrap, meaning that personal funds are the owner’s only or major source of capital. Putting money back into the business makes sense: Bootstrapping allows you to slowly and organically grow your business while ensuring that the model is financially viable.

On the downside, you’re not well-diversified. Using savings or credit cards for startup capital can put you at significant financial risk, depending on how capital intensive your business is.

It’s prudent to offset some of that risk by exploring one or more additional sources of funding.

Fortunately, there are plenty of other places to get capital. Bringing in outside sources, such as offering equity and getting a good or service in return, business loans or customer presales or recurring sales can ensure a constant inflow of capital.

3. Focus on liquidity.

Sure, your balance sheet shows you that your business is financially sound, but it doesn’t mean your assets are liquid. The goal should be to have more assets than liabilities, so you have a buffer to meet short-term financial obligations.

And, the professionals controlling those external funding sources — like business lines of credit or inventory/receivables factoring — will expect you to have a view into your liquidity status . Some key points are that while cash, not P&L, is your main metric, there are additional important KPIs like the cash conversion cycle (CCC), days sales outstanding (DSO), days payable outstanding (DPO) and days inventory outstanding (DIO) that all companies should track.

Some small businesses may even want to assemble a “cash committee” to closely monitor daily metrics and report back on liquidity status.

4. Cash flow.

A healthy cash flow enables you to meet current obligations, like paying employees and purchasing raw materials, while also building up a reserve for investments and emergencies. Amassing assets, like real estate or inventory, is great, but if cash flow is a challenge, your business will stall.

Performing a formal cash flow analysis will tell you how much money is flowing in and out of your business. This knowledge allows you to plan accordingly. When you do these analyses regularly, you will gain historical perspective and be able to determine the amount you should set aside as reserves to weather the leaner months or an unexpected cash flow shortage.

5. Manage taxes.

Going the do-it-yourself route may work for your personal finances, but tax planning can be far more complicated as a small business owner. Outsourcing tax planning and preparation to a qualified certified public accountant (CPA) or other financial professional who may be helping with your business will not only free up time, but that expertise may reduce your tax liability.

A CPA knows tax laws in your area inside and out and can advise you on various strategies, such as how to maximize qualifying business expenses and the amount to pay in estimated taxes so you don’t end up with a big bill — or giving Uncle Sam an interest-free loan.

One note: One business valuation expert has seen founders make a mistake by trying to structure their businesses to minimize the payment of taxes. When they’re successful at that, net income might be zero or even negative. However, that can cause major problems when seeking funding or investments.

6. Risk management.

Identifying and mitigating risk is something every small business needs to do, but it often falls to the bottom of the list simply because creating a plan that addresses all potential perils seems like a massive task. And yes, it is virtually impossible to address every risk that could possibly affect your business. But you can certainly narrow the list and put safeguards, like cybersecurity insurance and a crisis communications plan, in place.

Scenario Planning vs. Business Continuity Planning

Scenario planning is often conflated with business continuity planning. While both are structured processes, scenario planning plays a longer game that considers revenue over time. Business continuity planning is about how your business will react to a disaster, such as a warehouse fire or earthquake.

In both processes, the journey may be as valuable as the final work product. By bringing leaders together to think through what could affect your business, you may head off potential risk.

Here are some things to consider when crafting a risk management plan:

Note that you don’t need to start from scratch. The Small Business Administration provides a free “ Risk Management for a Small Business” training guide.

One existential risk for any business is the loss of the founder or other key leader — do you have a plan for what happens when you must or want to leave?

That leads us to the next three items which, while related, deserve their own plans and attention.

7. Create succession and exit plans. 

These are two different scenarios. In a succession, you’re turning the reins of the business over to the next leader. In an exit, you are selling or shutting down the business. As with risk management, the SBA offers a template for succession planning that also includes a section on selling the business.

When deciding whether to sell, close or pass along the company you’ve built, the Small Business Administration recommends looking at a few factors. Have you received a job offer from another company or a purchase offer for your business or your business assets? Are you satisfied with the business’ profitability? Do you foresee market or industry changes that you can’t or don’t wish to adapt to?

On a personal level, are you ready to retire or find you’re working too many hours? Are you simply no longer passionate about the business and ready to try something new? Answering these questions should provide clarity into your next steps.

Let’s look at both succession and exit.

Exit plan: If you wish to sell your company, you need an idea of the value. In fact, even if you aren’t looking to sell, it’s smart to always have a ballpark idea of the business’ market value. Experts advise looking at what similar firms have sold for recently, consider qualitative factors such as whether executives plan to stay on and decide what payment terms you’ll accept.

Succession plan: This is a strategy to cede control of the business to one or more people, or an acquirer. If the former, decide if you will pass the company on to a family member or an employee, and begin training. You’ll still need to know the business’ value, so take the steps mentioned above. Bring in an attorney and a tax professional early on.

8. Plan for retirement.

Retirement planning is crucial for everyone, business owner or not. Experts recommend saving at least 15% of pretax income for retirement in a tax-advantaged plan, such as a simplified employee pension individual retirement account, or SEP-IRA. Any employer, including sole proprietorships, are eligible to establish SEP-IRAs. You can extend this opportunity to employees.

As with taxes, an experienced financial planner can walk you through your options to create a plan suited to your company’s needs.

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9. Create an estate plan.

Proper estate planning helps to provide for your loved ones, business partners and employees who rely on your business; minimize tax exposure; and provide clear instructions on how the business should proceed. These plans are also critical in case you’re incapacitated. There’s no substitution for having an experienced estate planning attorney help you create an airtight plan.

Creating a customized financial plan is an ongoing process. Find trusted advisers who can offer advice and help you develop actionable steps. Successful small business financial planning is an ongoing process, and done successfully, these strategies will optimize performance and show customers and employees that you’re looking out for their welfare.

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