It can be easy to put off creating your business financial story plan - after all, who has time for that? But don't underestimate the importance of this document. Your business financial plan is vital, serving as both your road map and your trusty friend. With it, you can keep track of your progress and adjust where necessary. Plus, you'll have a better understanding of your company's financial health and how to improve it. So don't wait - start writing your business financial story today!

No one ever said that starting and running your own business would be easy, and it's certainly not. But if you're looking to make your business a success, one of the most important things you can do is create and stick to a well-written financial plan. That may seem like a daunting task, but don't worry – this podcast is here to help.

In this podcast I'll explain

• Firstly, the benefits of creating your financial story
• Secondly, how to start with your business story, no numbers
• Thirdly, dealing with money in and money out
• Lastly, putting you story together

Whether you're just getting started or you've been struggling to stay on track, listen on for everything you need to know about putting together a winning business financial strategy.

If you're like most business owners, you know that a well-written business financial plan is a vital part of your success. But what many people don't realise is that your business financial story is just as important. In fact, it can be the key to getting things done. So how do you make sure your story is effective? Here are a few tips to help you get started.

Conclusion

Creating and following your business financial story plan is critical for your business success. By taking the time to develop a financial story that outlines where you are, where you want to be, and how you're going to get there, you create a living document that will help guide your decision making now and into the future.

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You can make more profits, save tax and time, improve your well-being and your money mindset.

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Writing and developing the financial story - the financial plan for your business is such a vital process, such a vital document to produce. It's not just a static document to suit funders. It's not just a document that gathers dust on your bookshelves. It's a living, breathing, getting things done document. In this podcast, I'm going to talk to you about the benefits of why a financial plan is so critical. I'm going to talk to you about how you go about constructing your own financial story, your own financial plan, and I'm going to share some tips and tricks with you along the way.

You're listening to the I Hate Numbers podcast with Mahmood Reza. The I Hate Numbers Podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Hi, folks. Welcome to another weekly podcast episode of I Hate Numbers. My name is Mahmood. I'm an accountant, educator, mentor, and now proud author of the book - yes, you guessed it - I Hate Numbers. Check out the show notes for some links and further information on that. Let's crack on with a podcast. When times are calamitous, when times are positive, in whatever the circumstances, whatever the outside world is going to throw at you, is really vital that you have a financial plan, a cash flow story that guides you and your business.

Some of the benefits are as follows: number one, it is an incredibly positive impact on your wellbeing. Now, you might think that sounds strange. How does that work? Well, if you have more certainty, if you have greater clarity about the decisions you're likely to face in the future, about whether you can do certain things like take time away from your business, invest in additional resources, whether you can afford to keep the ship going whether you can afford to pay your ongoing bills, whether you can afford to expand and pivot. You know, what is the consequence of following a certain course of action? Having that idea of your future mapped and translated into figures, into numbers, into money, really has a positive impact on your wellbeing.

Certainty, clarity, insight, improved decision making, and even making more money are things that emanate for a well constructed financial story. Having talked about the benefits, of which there are many, the next question is how do you go about constructing one for yourself? It all starts with your own business story. Do you have an idea what your business story, what the future looks like for your business, how you want it to be, how it's going to happen, and how you're going to write your business story?

Always start with the end point, your end destination. And that destination could be something that's mirrored in the next three years, and you reflect that over the next twelve months. For me, as a bare minimum, I like to think where I'm going to end up where I would like to be in that time ship, fast forward, land at my destination twelve months time. Look around and say this is what my twelve month future looks like. This is what it feels like. I can articulate it, I can describe it. Don't just talk in wishy washy style. Be more direct and be smart in that end goal.

Having decided what your end goal is going to look like, your end destination point, that could be a financial outcome, money in the bank, level of personal income… It could be customers you're working with, products you're delivering. Make sure you can translate that aimed goal smartly, specific, measurable, achievable, realistic and timely. Having decided what your endpoint looks like, then decide what your route map is. How are you going to get to that end point? Notice folks, at this stage there is no money, there are no numbers involved.

This is purely a coherent story that starts with an end point and then figures out the route to get there. If we think of a parallel, if you're going on holiday, you might decide where you want to go, where you want to travel to. You then go to plot and plan the route to get you there. The planning of the route doesn't spoil your holiday, but it minimises the disruption and it minimises the heartache if you end up not taking the right currency, if you don't quite know where to book your hotel, how the journey is going to look. All those things are essential in terms of having a smooth and positive experience.

There is no difference in your business. We then think about where that money is going to come from and we've talked in previous podcasts about groups. It's very unusual for a business, your business, just to sell one individual product which doesn't vary in size or dimension. If you're a service based business, you could have a service that you supply in a different way: one-to-one, one-to-many, memberships, training programmes and the like. So think about how you articulate, how you describe the different sources of revenue.

Don't just think of total sales, break that down into the different buckets. A motor mechanic may look at their business and think of their business in terms of services, repairs and car sales. A consultant may look at their business and think in terms of one-to-ones, memberships and training courses. For my own business, I Hate Numbers and that's what it's called, folks. I may be thinking of my business described in terms of tax work, management consulting work, management accounting and final account preparation. That may be one way that I articulate the businesses that I provide.

Having articulated what those different groups are, you then think in terms of what's the end goal, what's the twelve month outcome going to be in terms of how much that I'm likely to sell and how much I'm going to charge for it. But remember, folks, you can pause that and then you need to come back to it later. But that's ultimately what we're going to be looking at. Having decided your future target, because that's what it's going to represent to you of your future sales, what they are. Think about how you're going to achieve those sales. Some customers already there are you going to have to acquire new customers, what's your marketing effort going to be?

What's the resources that you might need in terms of staff time, in terms of freelancers? And again, remember at the early stage, just descriptive articulation to come up with a coherent story. So if you met a stranger in a lift and tell them about your business, how you are going to achieve that, make it more specific, and not just general ramblings. Having got an idea of what the resources you need to actually make that sell happen to deliver that service, then you can then begin to articulate that in financial terms.

Now, we've mentioned the revenue side of things. Let's recap. How much of that resource will you sell in? So in terms of measure that in number of days, number of units, if it's a product based business, number of hours you're going to be charging out, number of members in your membership group. And then think about the charge for each membership that they join, the amount of days they buy from you. How much are you charging per day? How much will they charge for a day's worth of management accounting work or as a package? However you price it up, however you articulate that, have that information by your side and think of it in terms of the year and then think about the resources you need to invest in is to make that happen.

For planning purposes, always good to think of your cost into two camps. Think of those costs that you're going to match against the service delivery. So, in the example of the motor mechanic doing repairs and maintenance on a vehicle, they need to buy in spare parts. So what's the amount of resources they need, the amount they're going to have to acquire of all the different components in order to carry out a service? In the world of accounting, in my business, I may be looking at how much staff time I need to deliver a particular service, a group of services, how much of that resource do I need in terms of time and how much am I going to be paying for that resource time?

If you happen to be a product based business, then the raw materials, if you're making the product, do you require to produce it, how much labour time, all those things. The cost that we can associate with the delivery, the more accurate and the more focused we are on controlling it. The next level of resources we need to think about are what we might call fixed costs. A bit a jargon there for you for those costs that remain static and don't fluctuate according to how much business we generate. If we generate no business, those costs will remain the same.

They're not in relation to specific products or services, but they're there nevertheless. So if you've got a property based business, you work in an office, then the rentals that you pay, the related property taxes will be factored in as a fixed cost. If you have staff that are in the support team, admin ,IT, HR, finance and the like, then that will be part of your fixed costs. Other things that you may have marketing spend may be relatively constant, IT supports and the like. So factor in those fixed cost resources.

Now, the reason for separating those two costs are the first one that you have more control over and you can measure the relative contribution financially that each of those services generate for you. Having assembled all of that, folks, you can then assemble that into a financial plan. The next level of detail would be perhaps breaking that down into discrete months. But the main thing is you've got a financial plan that says what the outcome is for the next year. You then have to break that down. It's what that looks like on a month by month basis.

Having done all that just as a heads up and we'll come back to this topic in a future podcast; the doctrine itself, having done all that hard work, do your first cut, build in your personal and business wish list, don't edit as you go along, put it in there, come back, and then challenge accordingly if you find that the financial story either gives you a mild heart attack or it fills you full of joy. The doctrine itself is your accountability buddy. Use that to monitor your progress. Use that to check yourself about how you're progressing. You may be doing better than you expect. You may be doing worse than you expect.

It's not a question of being demoralised by what that is saying, but it's a question of reacting to it, picking it up and saying, okay, I've done better than I thought I would do. Great. What was the reasons behind that? If you're not doing as well as you expected, then you can examine the assumptions that you made. Are they realistic? Has something changed? Have circumstances changed and the resources that have gone up that cost you more? What's the reason behind them and you can fix them before it's too late. Folks, let me wrap up at this stage.

So what are we talking about? First of all, writing your financial story is an absolute must. It's not a ‘would be nice’, it's critical. Whatever size of business you've got if you're serious about your business, then write a financial plan. Number two, think about your business story. How is your future going to unfold? How do you get to your end point? Having mapped out your journey, giving it in detail to what that requires to execute and deliver, then translate that and represent that in financial terms.

Ideally, group your costs in two brackets the direct ones associated with the delivery and the ones that are there to support the business. Having got that financial plan, use it as your accountability buddy and check your progress as you go through. Folks, I hope you've got some value from that podcast. I love it if you could share it with those that you feel will benefit. Leave me some comments, subscribe or even better, comment and tell me what you'd like covered in a future podcast. Check out the show notes. As I said, my book I Hate Numbers is there to help you get more closely associated with your numbers so you can power your business forward. Until next week, folks, happy business stories.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.