🌟 Week 6: Financial Planning

Welcome to Week 6! This week is all about understanding how money moves in your business — from planning and tracking to funding and growth. Strong financial planning gives you control, confidence, and a clear path toward building a sustainable business.

PowerPoint

💰 Financial Planning

Financial planning is the process of mapping out how your business will earn, spend, and save money over time. A good financial plan outlines startup costs, monthly operating expenses, and expected revenue. It helps you make decisions about pricing, marketing, and how to manage cash flow.

A financial plan also prepares you for future needs, such as paying taxes, hiring help, or expanding your business. It’s an essential tool for setting goals and showing investors or lenders that your business is financially prepared for success.

📊 Accounting & Financial Planning

Accounting is the foundation of financial management. It’s how a business tracks income, expenses, assets, and liabilities. Keeping accurate records makes it easier to see where your money is going and whether your business is making a profit.

Accounting also supports financial planning by providing real data to base decisions on. Instead of guessing, you can use your accounting records to understand what’s working, what’s not, and how to improve your financial health.

• Business Expenses to Track for Taxes & Financial Planning: Worksheet

📈 Balance Sheet, Income Statement & Cash Flow

Every successful business uses financial statements to measure performance and make informed decisions. The three main reports — balance sheet, income statement, and cash flow statement — each tell a different part of the story.

• The Balance Sheet shows what your business owns and owes at a specific point in time. It includes assets (like cash or equipment), liabilities (such as loans or bills), and the difference between them — your equity.

• The Income Statement (or Profit & Loss Statement) tracks revenue and expenses over a period of time, showing whether your business made a profit or loss.

• The Cash Flow Statement monitors the actual movement of money in and out of your business, revealing whether you have enough cash to cover day-to-day operations.

Understanding these statements helps business owners identify strengths, weaknesses, and opportunities for improvement.

💳 Taking Payments & Tax Forms

Setting up an efficient payment system makes it easier for customers to pay and helps you stay organized for taxes. Businesses can use platforms like Square, PayPal, or Stripe to accept payments online or in person. Keeping a record of every sale ensures that income is properly tracked and reported.

Taxes are an important part of running a business. Understanding forms such as W-9, 1099, and Schedule C helps you stay compliant with state and federal regulations. Separating personal and business finances also prevents confusion and protects your business in case of audits.

Taking Payments:

• SQUARE: A suite of tools that works smarter for you and for your bottom line. Bring every side of your business together — sales, payments, payroll, inventory, and more. 

• PayPal: Sell just about anywhere. Get paid fast. Online, in store, or on the go, they have the tools you need to accept payments easily, securely. 

• Stripe: Accept payments online, in person or on your platform 

• Venmo: Pay, get paid, grow a business, and more. 

Tax Forms:

• IRS Schedule C Sole Proprietor Tax Form 

• Small Business Schedule C Template for Profit & Loss Statement

• Home Office Deduction: $5 per square foot up to a maximum of 300 square feet.

🤝 Family & Friends Investors

Many businesses start with financial help from friends and family. This can be a great way to raise funds without going through banks, but it requires transparency and trust. When accepting money from personal connections, it’s important to treat the arrangement professionally.

Clear agreements outlining repayment terms, timelines, and responsibilities help protect both sides. Communicating regularly about progress also keeps relationships positive and avoids misunderstandings.

💵 Small Business Loans & Credit Cards

Loans and business credit cards can provide the capital needed to grow your business. Small business loans come from banks, community lenders, or microloan programs designed for startups. They can be used for equipment, marketing, or expanding operations.

Credit cards offer flexibility for smaller expenses but should be managed carefully to avoid high interest rates. Building business credit separately from personal credit helps establish financial independence and prepares you for future opportunities.

🔁 Subscription Services, Pre-Paid Orders & Other Loans

Some businesses generate funding directly from their customers through creative payment models. Subscription services, pre-orders, and prepaid memberships bring in money upfront, helping to cover production and operating costs.

These methods also strengthen customer relationships by creating consistent income and loyalty. Other short-term loans or financing options may also help manage cash flow, but should always be reviewed carefully to ensure they fit your budget and goals.

TOOLS FOR TRACKING AND MANAGING YOUR MONEY

BANKING RESOURCES

FICO SCORES, CROWD FUNDING SITES & BUSINESS LOANS

• • • Top CrowdFunding Sites in 2023: Click here for details

    • 15 Best Sources of Startup Funding: Click here for details

    • Angel Investors Explained: Click here for details

    • AARP Small Business Grants for Older Adults: Click here for details