But where do you start? And is a financial plan even mandatory? In this article, we share the key tips, so you know exactly how to create a financial plan.
"}},{"componentType":"sectionTitle","title":"What is a financial plan?"},{"componentType":"paragraph","richBody":{"value":"A financial plan is an essential part of your business plan, offering a detailed overview of your expected income, expenses, and investments. It not only helps you assess whether your business is profitable and sustainable, but also helps you identify potential financial risks early on.
With a carefully prepared financial plan, you can better estimate what resources you need, how to manage capital, and what strategic decisions you need to make to grow your business. Additionally, it provides insights into your company’s financial health, both short-term and long-term, enabling you to make timely adjustments when necessary. In short, a solid financial plan is not just a tool for today but also lays the foundation for future decisions and growth.
"}},{"componentType":"sectionTitle","title":"Is a financial plan mandatory?"},{"componentType":"paragraph","richBody":{"value":"Yes, in Belgium, a financial plan is mandatory if you are setting up a private limited company (BV), a public limited company (NV), or a cooperative company (CV). This plan must be submitted to the notary before you establish your company, ensuring that your business will be financially sound for the first two years.
Starting a sole proprietorship? As an entrepreneur without partners or shareholders, you are not required to create a financial plan. However, it’s still strongly recommended. A financial plan can help you understand the feasibility of your business and detect potential pitfalls early on.
"}},{"componentType":"sectionTitle","title":"What’s included in a financial plan?"},{"componentType":"paragraph","richBody":{"value":"A financial plan consists of several key elements:
A strong financial plan lays the foundation for a successful business. But how do you go about it? Here are five practical steps to help you create your financial plan:
1. Create a realistic revenue forecast
Your revenue forecast should be based on market research and realistic assumptions. How many customers do you expect each month? What is the average sales value? A sober estimate of your expected income ensures that your financial plan isn’t overly optimistic.
2. Calculate your profit margins
Your profit margin is what remains after deducting all expenses from your revenue. Consider both the gross and net profit margins. This gives you a clear view of how profitable your business will be.
3. Plan for unexpected costs
It’s wise to build in a buffer for unforeseen expenses. Business accidents, damage to equipment, or unexpected tax bills can throw a spanner in the works. A financial reserve can ensure that your business continues to run during tough times.
4. Make use of tools and advice
Drafting a financial plan can be complex, but fortunately, there are many tools available to help you, such as Excel templates or specialised accounting software. It’s also a good idea to consult a financial advisor or accountant to ensure your plan is complete and accurate.
5. Don’t be afraid to adjust
While drafting your plans, you may discover that you need to tweak your idea to make it viable. Though this may not be pleasant, it’s better to realise this before or early in the start-up phase, so you can make timely adjustments.
Discover the ING Starter Package, bundling everything new entrepreneurs, self-employed professionals, and companies under 18 months old need into one package.
Do you have questions or need more information? Dive into ING’s starter tips to smartly launch your business.
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This article is for informative purposes only and the information set out herein may change with time. We therefore recommend that you always reference specific regulations and requirements with the competent authorities for the latest information. Additionally, we advise that you seek professional advice on a case-by-case basis before making any decisions. Please note that ING Belgium SA/NV cannot be held liable for any decision taken on the basis of the information provided.
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