Is the financial plan for your business is solid or do you have some work to do?
The number one reason for small business failure is financial. Undercapitalization, poor budgeting, and misallocation of resources often lead to small business failure within the first couple of years. Many entrepreneurs or small business owners are not trained in or aware of how to create a solid financial plan. Many therefore think that their plans are effective when really they are not.
This measure assesses many aspects of a financial plan to see whether you, the business owner, have areas to work on or improve upon. The results will indicate how strong your financial planning currently is and whether it is advised that you start from scratch or get some assistance.
Please complete all items. Rate each item on a scale of 1-5. Please choose one number and do not write a decimal, such as 3.5. Select the answer that best represents your feelings, thoughts, and behaviors regarding your financial plan. Choose how true each statement is for you.
| I have a financial plan in writing that outlines my business's planned expenditures over the next several years. |
| Less True - 1 2 3 4 5 - More True |
| I have consulted with a financial specialist regarding my personal and professional financial future. |
| Less True - 1 2 3 4 5 - More True |
| My financial plan has a large cushion built in for unanticipated costs or investments. |
| Less True - 1 2 3 4 5 - More True |
| I have consulted an accountant to determine what expenses are deductible and I have a system to keep track of expenses and income. |
| Less True - 1 2 3 4 5 - More True |
| The financial plan for my business includes a large marketing budget for expenses including: website, brochures, letterhead and envelopes, business cards, flyers and announcements, and newsletters. |
| Less True - 1 2 3 4 5 - More True |
| My business plan reflects and separates out start-up costs and recurring costs. |
| Less True - 1 2 3 4 5 - More True |
| My business has a financial plan, which is backed by accounting practices that are regularly updated and analyzed. |
| Less True - 1 2 3 4 5 - More True |
| In my financial plan is predicted costs for professional development through seminars, workshops, conferences. |
| Less True - 1 2 3 4 5 - More True |
| I have projected income for the next several years based on my market research results. |
| Less True - 1 2 3 4 5 - More True |
| The financial plan for my business includes a large marketing budget for expenses including: costs of networking events, workshops, trainings, and seminars, business lunches or dinners, and airfare and hotel costs. |
| Less True - 1 2 3 4 5 - More True |
| I have sales targets set for a the next several years that reflect the optimal annual percentage increase in my industry. |
| Less True - 1 2 3 4 5 - More True |
| I have sat down with advisors or business associates and brainstormed every possible source of expenses that may arise. |
| Less True - 1 2 3 4 5 - More True |
| Going into the first (or second or third) year of my business, I have enough savings to cover at least 6 months of slow sales as the business grows. |
| Less True - 1 2 3 4 5 - More True |
| My company has numerous financial benchmarks. |
| Less True - 1 2 3 4 5 - More True |
| I have communicated the key points of the financial plan to relevant employees or consultants. |
| Less True - 1 2 3 4 5 - More True |
| I have explored the option of small business loans and have decided whether this avenue is right or wrong for my company. |
| Less True - 1 2 3 4 5 - More True |
| When I think about my financial plan, I feel calm and secure because I know how thorough it is. |
| Less True - 1 2 3 4 5 - More True |
| I have researched and created a solid pricing strategy for my goods or services. |
| Less True - 1 2 3 4 5 - More True |
| I have included office supplies and equipment in my financial plan. |
| Less True - 1 2 3 4 5 - More True |
| My financial plan contains a profit and loss (P & L) statement. |
| Less True - 1 2 3 4 5 - More True |
| I have clearly decided whether I want to sell or distribute equity (ownership) in my company |
| Less True - 1 2 3 4 5 - More True |
| I have a well laid out contingencies section in my financial plan which describes potential problems with my individual business, the market, or the economy in general. |
| Less True - 1 2 3 4 5 - More True |
| My financial plan reflects my seriousness about my business and my commitment to making it work by carefully outlining what I will need to do to launch and grow the business. |
| Less True - 1 2 3 4 5 - More True |
| I sleep well at night knowing that the financial side of my business is well planned and accounted for. |
| Less True - 1 2 3 4 5 - More True |
| I have explored the option of investors (angel investors, venture capitalists, etc) and have decided whether this avenue is right or wrong for my company. |
| Less True - 1 2 3 4 5 - More True |
| My financial plan accounts for missed revenues due to holidays, sick days, time off, emergencies, and low productivity. |
| Less True - 1 2 3 4 5 - More True |
| After consulting with several professionals or knowledgeable parties, I am convinced that I have enough start-up capital for a successful business launch. |
| Less True - 1 2 3 4 5 - More True |
| I do not have too much trouble with keeping track of my businesses revenues and expenditures. |
| Less True - 1 2 3 4 5 - More True |
| I have updated my financial plan quarterly (or I plan to). |
| Less True - 1 2 3 4 5 - More True |
| I have read several books and articles or done other forms of research on how to create a strong financial plan. |
| Less True - 1 2 3 4 5 - More True |
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