Any modern company that conducts economic activities in one or another area of business engages in planning. Planning in business plays, if not the leading role, then at least important role in questions economic efficiency and is aimed at maximizing the effectiveness that the business is able to show.
Financial plan An enterprise is a subtype of a group of management, interrelated documents, which is compiled and maintained for long-term planning and operational management of the resources available to the company in cash. Simply put, thanks to the financial plan, a balance is ensured between planned and actual revenue receipts, and, on the other hand, planned and actual expenses for the company’s activities.
The balance of the financial and economic state of the company, which is achieved through high-quality financial planning, is perhaps the main benefit of using such a management tool as the enterprise’s financial plan.
Types of financial plans for a modern enterprise
Tough competition on modern market forces businesses to work much harder to find resources and opportunities to become more competitive within their operations. Subject-based financial plans, as well as their variable use in operational business issues, make it possible to solve these management problems based specifically on the company’s internal plans and resources, avoiding, if possible, serious dependence of the business on a continuous flow of borrowings. Or, if not decide, then at least create a balance within the economic issues of the organization using financial planning tools.
It is worth noting that financial plans at enterprises differ not only in the size of the planning period (duration), but also in their composition. The composition of indicators or the composition of planning items will differ in two parameters: purpose and degree of detail. Relatively speaking, for one company the grouping of expenses “utilities” is sufficient, but for another, the planned and actual value of each grouping indicator is important: water, electricity, gas supply and others. Therefore, the main classification of financial plans is considered to be the classification by planning period, within which each specific company independently chooses the degree of detail of the financial plan.
As a rule, modern companies in Russia use three main types of financial plans:
- Fin. plans for short-term periods: the maximum planning horizon is a year. They are used for operational activities and can include maximum detail of planned and actual indicators managed by the company’s team.
- Fin. plans for medium-term periods: planning horizon more than a year, but not more than five years. Used for planning over a 1-2 year horizon, they include investment and modernization plans that contribute to the growth or strengthening of the business.
- Fin. long-term plans: the longest planning horizon, starting from five years, including the interpretation of the company's long-term financial and production goals.
Figure 1. Types of financial plans of modern companies.
Development of a financial plan for a modern enterprise
Development of a financial plan for an enterprise is an individual process for each individual enterprise, depending on the internal economic characteristics and talent of financial specialists. Moreover, any approach, even the most exotic, to the financial planning process requires financiers to include mandatory, that is, identical for everyone, financial data when drawing up financial plans:
- Planned and operational data on production and sales volumes;
- Planned and actual estimates of departments;
- Expense budget data;
- Revenue budget data;
- Data on creditor and debtor;
- Data from budgets of taxes and deductions;
- Regulatory data;
- BDDS data;
- Specific management accounting data for a particular enterprise.
Figure 2. Data composition for the financial plan.
In practice, the role of financial plans in modern business huge. It can be said that financial plans are gradually replacing traditional business plans because they contain only specific information and enable management teams to constantly monitor the most important values. In fact, for middle and senior managers, the system of financial plans drawn up at the enterprise is the most dynamic tool. That is, any manager who has access to management information and the competence to manage such information can continuously improve the efficiency of the department entrusted to him through the use of various combinations financial planning tools.
Form of a financial plan of an enterprise and management tasks solved using the system of financial plans
Today there is no approved form or recognized standard of a financial plan for an enterprise, and the variability of the forms of this management tool is due to the internal specifics of enterprises. In management practice, there are traditional tabular forms of the system of financial plans of enterprises, proprietary IT developments in the form of special programs and bundles of these programs that provide import and export of data, and specialized packaged software packages.
In order for an enterprise to determine the required level of detail in its own financial plan, it is worth listing a list of management problems that the financial plan will help solve:
- The financial plan solves the problem of preparing and implementing a continuous assessment system at the enterprise financial indicators companies;
- The financial plan allows you to set up the process of continuous preparation of forecasts and plans for the company’s activities;
- Determine sources of income and volumes of financial resources planned for the enterprise;
- Formulate plans for the financing needs of the enterprise;
- Plan standards within the enterprise;
- Find reserves and internal capabilities to improve efficiency;
- Manage the planned modernization and development of the company.
Thus, the system of interconnected financial plans becomes that part of the enterprise management system that reflects and makes it possible to manage all financial, economic, production and business processes, both within the enterprise and in the company’s interaction with the external economic environment.
Enterprise financial plan - sample
To create a high-quality financial plan, it is recommended to use the following sequence of actions:
1.Formulate the goals of drawing up a financial plan;
2. Specify the composition of indicators and the degree of detail;
3. Study examples and samples of financial plans;
4. Develop an example of a financial plan form and agree within the organization;
5. Based on feedback from users of the enterprise financial plan sample, develop a final individual template for the company’s financial plan.
Financial plans are drawn up not only to plan the work of a single company as a whole, they can perform different tasks - be the basis of projects, calculations within individual divisions, or reflect financial data for a single manufactured part.
Figure 3. Example of a spreadsheet financial plan for a small project.
conclusions
The market economy dictates new requirements for business to its own organization. High competition forces businesses to focus on predicted results, which in turn is impossible without planning. Such external market conditions encourage companies to engage in financial planning to ensure their own efficiency.
Competent calculations and plans can provide an enterprise not only with current operational benefits, but also help in managing its prospects for the production of works and services, cash flow, investment activities and the commercial development of the enterprise. Current financial condition enterprises and the corresponding reserve for the future directly depend on financial planning. A well-drafted financial plan for an enterprise is a guarantee of protection from business risks and an optimal tool for managing internal and external factors affecting business success.
2.2 Calculation of an enterprise’s financial plan using the example of Kapriz LLC
Let's consider the formation of a financial plan for an enterprise using the example of the limited liability company "Caprice". 1). In table 1.1 presents a plan for product sales volumes based on marketing research. Its main task is to give an idea of the market share that is expected to be won by the new product. Table 1.1 Sales forecast
| Indicators | |||||
| Expected unit sales | 8000, 00 | 7000, 00 | 9000, 00 | 8000, 00 | 32000, 00 |
| Selling price per unit of product (in rubles) | 15, 00 | 15, 00 | 15, 00 | 15, 00 | |
| Total sales volume (thousand rubles) | 120 000, 00 | 105 000, 00 | 135 000, 00 | 120 000, 00 | 480 000, 00 |
Table 1.2. Schedule of expected receipts Money
| Indicators (in thousand rubles) | |||||
| Accounts receivable as of December 31 of the previous year * | 2500, 00 | 2500, 00 | |||
| Sales of the first quarter** | 84 000, 00 | 33 600, 00 | 117 600, 00 | ||
| Q2 sales | 73 500, 00 | 29 400, 00 | 102 900, 00 | ||
| Third quarter sales | 94 500, 00 | 37 800, 00 | 132 300, 00 | ||
| IV quarter sales | 84 000, 00 | 84 000, 00 | |||
| Total cash inflow | 86 500, 00 | 107 100, 00 | 123 900, 00 | 121 800, 00 | 439 300, 00 |
* Total accounts receivable balance expected to be collected in the first quarter
** 70% of quarterly sales are paid in the quarter of sale, 28% of quarterly sales are paid in the next quarter; the remaining 2% represents uncollectible debts
3). Based on the sales forecast and the established practice of maintaining inventories finished products, a production plan has been developed (Table 1.3).
Table 1.3 Production plan
| Indicators | ||||||
| Desired stock of finished goods at the end of the period* (in thousand pieces) | 700, 00 | 900, 00 | 800, 00 | 1000, 00** | 1000, 00 | |
| Total need for the product (in thousand pieces) | 8700, 00 | 7900, 00 | 9800, 00 | 9000, 00 | 35400, 00 | |
| Less: Inventory of finished goods at the beginning of the period*** (in thousand pieces) | 800, 00 | 700, 00 | 900, 00 | 800, 00 | 800, 00 | |
| Number of units to be delivered (in thousands) | 7900, 00 | 7200, 00 | 8900, 00 | 8200, 00 | 34600, 00 | |
* 10% from next quarter's sales
** approximate estimate
*** similar to finished goods inventory at the end of the previous quarter
4). A plan of income and expenses of the enterprise has been drawn up. The purpose of this document is to show how profits will be formed and change.
Among the analyzed indicators the following stand out:
a) income from sales of goods;
b) costs of production of goods;
c) total profit from sales;
d) general production expenses (by type);
e) net profit (line c) minus line d)).
Table 1.4 Plan of income and expenses
| Index (in thousand rubles) | |||||
| Sales revenue | 120000, 00 | 105000, 00 | 135000, 00 | 120000, 00 | 480000, 00 |
| Import costs | 12000, 00 | 10500, 00 | 13500, 00 | 12000, 00 | 48000, 00 |
| Gross profit from sales | 108000, 00 | 94500, 00 | 121500, 00 | 108000, 00 | 432000, 00 |
| General production costs, including | 5280, 00 | 4620, 00 | 5940, 00 | 5280, 00 | 21120, 00 |
| trading costs | 1200, 00 | 1050, 00 | 1350, 00 | 1200, 00 | 4800, 00 |
| advertising | 1200, 00 | 1050, 00 | 1350, 00 | 1200, 00 | 4800, 00 |
| remuneration of management personnel | 600, 00 | 525, 00 | 675, 00 | 600, 00 | 2400, 00 |
| depreciation | 1200, 00 | 1050, 00 | 1350, 00 | 1200, 00 | 4800, 00 |
| other | 1080, 00 | 945, 00 | 1215, 00 | 1080, 00 | 4320, 00 |
| Profit | 102 720, 00 | 89 880, 00 | 115 560, 00 | 102 720, 00 | 410 880, 00 |
5). A balance of cash receipts and payments has been developed (Table 1.5). Its main task is to check the synchronicity of the receipt and expenditure of funds, and therefore the future liquidity of the enterprise during the implementation of this project. The information thus obtained serves as the basis for determining the total cost of the entire project.
Table 1.5. Balance of cash receipts and payments
| Index (in thousand rubles) | |||||
| Sales income | 86500, 00 | 107100, 00 | 123900, 00 | 121800, 00 | 439300, 00 |
| Payments, including | 62000, 00 | 59000, 00 | 47000, 00 | 5000, 00 | 173000, 00 |
| equipment | 50000, 00 | 50000, 00 | 40000, 00 | 0 | 140000, 00 |
| office equipment | 10000, 00 | 7000, 00 | 5000, 00 | 3000, 00 | 25000, 00 |
| other | 2000, 00 | 2000, 00 | 2000, 00 | 2000, 00 | 8000, 00 |
| Cash growth | 24500, 00 | 48100, 00 | 76900, 00 | 116800, 00 | 266300, 00 |
| Balance at start | 50000, 00 | 74500, 00 | 122600, 00 | 199500, 00 | 446600, 00 |
| Remaining at the end | 74 500, 00 | 122 600, 00 | 199 500, 00 | 316 300, 00 | 712 900, 00 |
1. How much funds are required to implement this project.
2. Sources of financial resources and the form of their receipt.
Sources may include:
a) own funds;
b) bank loans;
c) attracting funds from partners;
d) raising funds from shareholders, etc.
3. The period of expected full return of the invested funds and the receipt of income by investors on them.
Plan for sources and use of funds
Funds from different sources, total…………………889800
Including:
Real estate loan………………………200000
Own funds:
Profit of previous years…………….…..250000
Profit of the planned year……….…432000
Depreciation…………………………….4800
Use of funds, total…………………………679000
Including:
For the purchase of equipment……………………..140000
For the increase in reserves…………………………….519000
To repay the loan……………………………20000
Net increase in working capital………………..210800.
Conclusion
This course work examines financial issues and calculates the financial plan of the enterprise, which will allow you to determine the enterprise’s costs, income, payments and receipts of funds, increase the efficiency of the enterprise’s production and, most importantly, calculate its profit.
The first chapter discusses theoretical aspects analysis of the finances and financial plan of the enterprise, and the second chapter provides all practical calculations of the financial plan of the enterprise based on Caprice LLC.
Based on the analysis of finances and the calculated financial plan of the enterprise, the following conclusions were made.
Finance occupies a special place in economic relations. Their specificity is manifested in the fact that they always appear in monetary form, have a distributive nature and reflect the formation and use various types income and savings of subjects economic activity spheres of material production, the state and participants in the non-productive sphere.
The life of a company is impossible without planning; the “blind” desire to make a profit will lead to a quick collapse. When creating any enterprise (in our example, Kapriz LLC), it is necessary to determine the goals and objectives of its activities, which determines long-term planning. Long-term planning defines medium-term and short-term planning, which are designed for a shorter period and therefore imply greater detail and specificity.
The basis of planning is the sales plan, since production is focused primarily on what will be sold, that is, in demand in the market. Sales volume determines production volume, which in turn determines the planning of all types of resources, including labor resources, raw materials and materials inventories. This necessitates financial planning, planning costs and profits. Planning must be carried out according to a rigid scheme, using calculations of many quantitative indicators.
The financial plan provides the entrepreneurial plan of the business entity financial resources and has a great impact on the economy of the enterprise. This happens due to a number of significant circumstances. Firstly, in financial plans the planned costs for carrying out activities are compared with real possibilities. As a result of the adjustment, material and financial balance is achieved. Secondly, financial plan items are related to all economic indicators work of the enterprise and are linked to the main sections of the entrepreneurial plan: production of products and services, scientific and technological development, improvement of production and management, increasing production efficiency, capital construction, logistics, labor and personnel, profit and profitability, economic incentives. Thus, financial planning influences all aspects of the activity of an economic entity through the selection of financing objects, the direction of financial resources and promotes the rational use of labor, material and monetary resources.
This course work was intended to prove the need for financial planning for the activities of any company that expects success in modern conditions market. Kapriz LLC is on the path to increasing the efficiency of its activities. He has the opportunity to strengthen his financial position. But we must not forget that we are in particularly harsh conditions of the Russian economy, in which some market laws operate exactly the opposite, however, taking into account the fact that before perestroika, our country for many years was a shining example of an authoritarian directive-planned economy , then the process of planning the production and commercial activities of an enterprise and the main market indicators is based on many years of experience. Of course, with the advent of the reform stage in our state, both planning methods and its tasks have changed.
Literature
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A personal financial plan is the first step towards achieving your goal and achieving financial independence. The vast majority of rich people have their own financial plan, thanks to which they competently manage their cash flows and, as trite as it may sound, this allows them to become even richer and feel more confident in terms of financial security. A well-drafted plan provides a certain algorithm of sequential actions, the implementation of which will allow you to achieve your intended goal with at the lowest cost. Even a simple plan will allow you to feel more stable, get rid of debt, live mediocrely, and ideally significantly improve your financial situation.
Most people don't have a clear financial plan. But nevertheless, they still have some desires. And to the question of what would you like in this life, the answers will be approximately the following:
- a lot of money A LOT OF MONEY;
- apartment;
- cottage or house by the sea;
- do not work and live on interest from capital;
- car;
- to travel a lot;
- pay off debts.
Go ahead. We ask them: “How are you going to achieve this?” And then there comes a long pause. A person begins to scroll through something in his head, think, and comes up with something like this: “Will I earn more in the future?” (we do not take into account winning the lottery and receiving a rich inheritance).
How much more? And when will this happen? And what are you doing for this? And if income increases, what next? How do you want to not work in the future and live entirely on your own funds, which will generate your monthly income? And in general, how much money do you need for this?
And in response there was silence or something completely incomprehensible.
- why do you need a financial plan and what does it provide;
- how to correctly formulate your goals;
- complete compilation algorithm in 4 steps with examples;
- how to avoid mistakes and increase the efficiency of achieving your goal.
The article turned out to be quite lengthy. But I tried to take everything into account in it. After reading it you will receive complete information on the correct preparation of your plan.
Why do you need a financial plan?
What is a personal financial plan (LPP)? This is a kind of map, a kind of guide that helps you move towards your goals along the right path, with the least obstacles and difficulties, taking into account all the nuances. If we compare it with other areas in life, we can draw an analogy. Let's say you travel to Altai on your own by car. In order to get to a place safely, you need to know: the road map, the distance and, accordingly, how much money is needed for fuel, travel time, associated expenses (food, overnight stays, etc.), things that are needed for the trip. Having such knowledge, you can easily reach the intended point, with maximum comfort. The absence of one of these points in the plan can cause serious obstacles, up to the inability to get to the place (it’s commonplace to run out of money on the road).
Drawing up a plan will take you no more than an hour, well, maybe 2-3 hours if it is serious enough. But the time spent will allow you to clearly formulate your goal and, most importantly, understand how you can achieve it.
People who have a clearly defined financial plan achieve their goals many times faster than those who do not.
Stages of drawing up a financial plan
Where to start compiling LFP? Formation of the plan consists of several successive stages.
Stage 1. Setting goals
Drawing up a financial plan should always start with defining your goals. That is, what you want to achieve. Goals can be long-term or short-term. Not important, important and very important or global. In addition, goals should be specific and better expressed in monetary terms. For example, I want new car, an apartment, saving up for a vacation - on the one hand, these are goals, but on the other hand, they carry absolutely no information. It would be more correct to formulate this way - I want:
- a new BMW car for $30,000;
- 3 room apartment in the center of your city for 5 million rubles;
- save 100,000 rubles for vacation.
So we have specific goals. And now it becomes more clear how much money is needed to achieve them.
Stage 2. Timeframe for achievement
The goals have been set. Now you need to determine the time during which you plan to achieve them. When there are no exact deadlines, the goal becomes something illusory and distant. Specifically, using the above examples, you can do this:
- buy BMW in 3 years;
- apartment in 10 years;
- vacation - accumulate by May next year.
Deadlines and goals need to be set realistically, based on your financial capabilities. The dream of having a million dollar house and several million dollars in your account is certainly good. But if you receive the average salary in the country, then your plan is doomed to failure from the very beginning. As well as the goal of saving up for an apartment worth 100 thousand dollars in 2 years with a salary of 1 thousand dollars. Be realistic.
Stage 3. Assets and liabilities
This is the most important point. Moreover, compiling it will take the lion’s share of time. And success in achieving your goals depends 90% on him.
You need to determine for yourself how much money you can save monthly. First you need to determine the size of assets and liabilities in your budget. That is, how much you receive and spend. The difference will be the amount that can be allocated.
Assets are what bring you money or your income.
Liabilities - they take money, that is, your expenses.
We draw up a table of assets and liabilities.
It is not necessary to know every expense item down to the last penny. You can initially generate data approximately “by eye”. The most important thing here is to see the overall picture of your income and expenses and in what proportion this or that expense item accounts for the total amount.
| Assets | Income | Liabilities | Expenses |
| Salary | 50 000 | Loans | 8 000 |
| Interest on deposits | 5 000 | Communal payments | 5 000 |
| Renting an apartment | 10 000 | Nutrition | 15 000 |
| Dividends on shares | 5 000 | Cloth | 15 000 |
| Part time job | 10 000 | Directions | 3 000 |
| Household expenses | 3 000 | ||
| Entertainment and relaxation | 20 000 | ||
| Sport | 2 000 | ||
| TOTAL: | 80 000 | 71 000 |
The table shows that the net balance each month is 9,000 rubles. Based on this, you need to adjust your goals and deadlines for achieving them.
It was more logical, of course, to start from this stage, and then move on to setting deadlines. But I advise you to do it in this order. Why? If you immediately determined how much money you have left and the period until you achieve the plan based on these plans, then you would end there. The discrepancy between the desired and actual deadlines gives you an incentive to look for ways to fix it.
Stage 4. Invest money
After determining the goals, deadlines and amount that you can save monthly according to your personal financial plan, you need to make sure that the money does not lie dead weight, but brings in additional income. Depending on your goals and time frame, you can use different financial instruments to make a profit. Valid here next rule: the longer the period of achieving your goals, the more risky and profitable instruments you need to invest money in.
A few examples.
- Money for vacation in 1 year. At the appointed time, you must have a certain amount that will be enough for the trip and related expenses. And here the most important thing for you is stability and security. Therefore, the best option is bank deposits with their almost 100% reliability. If you are planning a trip abroad, it is advisable to additionally open foreign currency deposit. This way you will protect yourself from sudden sharp jumps in the dollar (euro), when money accumulated in rubles can sharply depreciate.
- You are saving for your child's education. The money will be needed in about 8 years. The term is quite long, so bank deposits, with their low interest rates, are not the best option. Investments in bonds and stocks, whose potential income is 1.5-2 times higher, are most suitable for you. 1-2 years before the target date, gradually transfer money to more conservative instruments to avoid unpleasant situations in the form of drawdowns in shares. Here again we turn our attention to bank deposits and government bonds with their highest degree of reliability (OFZ).
When drawing up personal financial plans, many people make the same mistakes and do not take into account many factors. This together makes it difficult to achieve the intended goals, and in some cases makes them impossible. It is better to know all the pitfalls right away on the shore and swim with the flow, and not against it. Additionally, our advice can significantly speed up your process, in some cases even significantly.
Unrealistic deadlines and amount of goals
As already described above, there is no need to wish for yourself what you are unlikely to achieve. It's better to focus on more real things. Of course, the goal may be slightly too high. This will give you an incentive to look additional features to make your dream come true.
Too much amount
This refers to the amount set aside monthly. Of course, the more you can save the better. But you don’t need to tighten your belts to the limit and live on 5 kopecks a week. The goal is of course good, but you need to live now. Moreover, constantly living in spartan conditions, you risk one day giving up on everything, all your goals and plans. Therefore, leave yourself some financial reserve to breathe more freely.
Lack of discipline
Setting goals and making a plan is only half the battle. You could even say this is the simplest and easiest thing. What awaits you ahead will be a real test for you. You can create a plan in just an hour, but you need to stick to it for several months (years, decades). The success of your venture will depend on your actions in the future.
Too long
It is very difficult to stay motivated and stick to a month-to-month plan that spans several years. Therefore, further break it down into several stages. It will be much easier to reach everyone. And the motivation will be at the level. If you are saving for an apartment ( Vacation home) for 10 years, then the 1st stage will accumulate 10% of the cost within a year. You can take into account the footage of your future home - save for the kitchen, hallway, bathroom, toilet. Then, for example, the accumulated money would be enough for you to buy out 1 room, then another. Think of something similar for yourself.
Inflation
For some reason, almost everyone forgets when money depreciates. This is especially true on long term. Agree that 10,000 rubles now and 10-15 years ago are two big differences. Previously, you could buy a lot more with them. The same goes for your plans. If you plan to save a certain amount, it may turn out that by the original date it will not be enough due to the fact that during this time the prices for everything have increased. But here they will come to your aid...
Compound interest
They work in conjunction with inflation. Typically, the higher the inflation rate in a country, the higher the return on investment will be. But here it is the difference between income and current inflation that needs to be taken into account. It is this difference that will show your real income.
By investing money at 15% per annum with annual inflation in the country at 10%, your real income will be 5% per annum.
How to find out this profitability? It is very difficult to determine the exact figure. But there is a certain average interval:
- Bank deposits - real yield 0 - 3% per annum
- Bonds - 2-5% per annum
- Shares - 3-8% per annum.
Pay yourself
After receiving income (salary, bonuses), we immediately set aside a predetermined portion for your goals. This will relieve you of the constant headache of where to get money at the end of the month, when almost everything has already been spent, but nothing has been put aside yet. Additionally, you will not be tempted to spend this money on other “necessities.”
Exact adherence to plan
On the one hand, this is good, but there is no need to blindly carry out everything planned in advance and fully automatically. You can make small adjustments based on your current capabilities. We raised your salary, gave you a good bonus, found a part-time job - we adjust the plan. Such periodic review can give you a significant acceleration in moving towards your goal. There are many options: save everything you receive above the average salary: either it’s all, or half, and spend the other half on yourself for your loved one, or save a certain percentage of what came from above, or a fixed percentage of your entire income. We received a lot - we put a lot aside, our salary was cut - we reduce the contribution to the dream in the same proportion.
Optimization of expenses and income
The easiest way to achieve your financial plan faster is to save as much as possible. How to do it? There are only two ways - we reduce expenses and increase income. The easiest way to start is by optimizing your costs. Once again, carefully analyze what can be reduced and what can be completely abandoned in the name of a good goal. Perhaps you spend too much on entertainment, alcohol, smoking, lunches in cafes and restaurants. Everyone can find something of their own that they can limit themselves to (a little or completely).
After such optimizations, you can save significantly more money, which will ultimately give you the opportunity to achieve your goal much faster. Or get a more significant financial result within a predetermined period. What to focus on? Almost any family can save an additional 10 to 30% through small optimizations.
By investing 3,000 rubles in the stock market every month with an average annual return of 15%, after 15 years you will have 2 million rubles in your account. But if you increase the contribution amount to 5 thousand, you will receive an additional 800 thousand!
If you save 10% of your income, but then were able to optimize your expenses by 20%, then the amount of free funds you have will triple and things will go 3 times faster.
Where to keep records?
Is accounting necessary at all? Or can you just save money and not think about anything? In principle, this option is also possible. If you have an iron will, determination, excellent memory and your goals are not too long-term. But why all this? It’s easier to keep records, recording your achievements and the stage at which you are now and how much time you still have left until the end of the journey (time and money).
There are several accounting options. You can keep a notebook, a kind of income and expense book, and make notes there. The second option is to record everything on your computer in an office program, such as Excel. Once you have set up and entered the necessary items of expenses and income, as well as your goals, all you have to do is enter the numbers in the appropriate columns. You can even download a sample financial plan in a ready-made Excel spreadsheet and modify it a little to suit yourself.
But I think this is a long-outdated option. We live in the era of computer technology and enough has already been created a large number of programs that significantly simplify the maintenance of such records and, in particular, the achievement of a personal financial plan. The only negative is the likelihood that such a service will be closed by the developer. Your Excel tables will not go away, but data on a third-party service may be lost forever.
Therefore, here you need to choose the right service that has been working for several years. Personally I use free program EasyFinance.ru has been operating for several years.
There are a lot of advantages. Simpler accounting, the ability to easily access your data in the past, with the preparation of various reports: how much you received previously, how much you spent, saved, what share of a particular item of expenses-income from the total, what stage of the financial plan you are at and how much you left. You can maintain several plans at once. All this can be done with just one click of the mouse. And what I especially like is the ability to build all kinds of graphs, charts and interesting reports. This would be difficult to achieve in Excel.
How is there no such specific deadline? For minor goals, such as buying a new computer, phone, saving for repairs, it is recommended to draw up a plan for six months to a year. If your goals are more global, buying an apartment, saving for old age, then make a plan for several years in advance. This could be 10, 15 or 20 years. Further, it is advisable to break this period into several smaller ones. Nobody knows what will happen to you and your income in a few years. Therefore, we will definitely formulate a first plan for the next 2-3 years, and then based on your capabilities.
Is it possible to have several LFNs?
Of course you can. In this case, you need to choose priority ones among them, determine in what proportion you will contribute funds to achieve each goal. Of course, you need to save more for more important goals. But it is advisable to have no more than 2-3 goals. Otherwise, you risk wasting all your money on them and ultimately not achieving a single goal.
I have an existing loan, does it make sense to make a plan or is it better to pay off my debts first?
Loan repayment ahead of schedule- This is also a kind of financial plan. But if you have other goals in your plans besides repayment, then 2 options are possible. If you have a very expensive loan (20-30% per annum), then of course it is better to first throw all your energy and resources into repaying it. And only then begin to formulate your plans for the future. Otherwise, you will always be at a disadvantage. We invested the deferred money at 15% per annum, and the loan costs were 2 times higher.
If you have free debts (borrowed from friends, acquaintances), give some of them to pay off, and use the other part for your plans.
The mortgage loan taken out for long years. Here, too, you need to approach it based on logic and your capabilities. Either pay it off as soon as possible, thereby saving a significant part of the funds from the loan, or accept everything as is and, in addition to monthly loan payments, simultaneously implement your other financial plans.
Drawing up a financial plan using an example
Based on all of the above, all the recommendations and advice, let's look at an example of how to correctly draw up a financial plan, optimize it and implement it.
Ivanov Ivan Ivanovich wants to accumulate capital, which will allow him to leave his job and live in the future on interest. His demands are not too great and 30 thousand rubles a month is enough for him.
Forming a goal. 30 thousand per month is 360 thousand per year. We need to determine the amount of capital to own and ensure a given return.
There is a simple rule of two hundred. This means that the monthly profit must be multiplied by 200. Why 200? This corresponds to a conservative yield of 6% per annum, but with almost 100% safety of funds.
In our case we get:
30,000 rubles / month x 200 = 6,000,000 rubles
There is a goal: 6 million rubles
Now we evaluate the current financial position, that is, assets and liabilities. Let's make a table.
Income exceeds expenses by 5 thousand rubles. This is exactly the amount that can be saved monthly. But with such deductions, you will need to save for 100 years. And Ivanov would like to keep it within 10 years, maximum 15.
This means you need to increase the size of your monthly deposits. We will cut costs. Let's see what we can sacrifice. You need to start with the largest articles so that optimization gives greater results.
As a result, it was decided:
- Quitting smoking saves 3,000 rubles.
- Reduce expenses on alcohol - 500 rubles.
- Reduce trips to the cafe at work - 2,000 rubles.
- Buy food and clothes more thoughtfully and in advantageous places - an additional minus 3 thousand.
- Recreation and entertainment have also been slightly reduced - the winnings are 500 rubles.
As a result, every month an additional 9,000 rubles will remain. Total: you can safely save 14,000 rubles a month. This is about 30% of total income.
In addition, sometimes Ivanov is given additional bonuses at work. Plus it happens to earn money on the side. According to a rough estimate, this brings in about 100 thousand a year. On average 8 thousand per month. Ivanov decides to spend some of this money on himself, and 5 thousand will go into the piggy bank.
Total: you can save 19 thousand a month with virtually no damage to your budget.
Now we determine where we will invest the money. Since the goal is quite serious and the implementation of such a financial plan will take more than one year, the most optimal would be to invest money in the stock market, namely in.
Investing in stocks is considered a risky investment, but has the potential for high returns. You can reduce risks without loss of profitability by increasing the investment period.
Taking into account inflation and projected long-term profits, we have a real return of 6%. Using a calculator, we calculate how much time we need to earn 6 million. (It would be more correct to say - an amount equivalent to today’s 6 million, for which it would be possible to buy the same amount of goods and services as now with this money).
The period is about 15 years. This is exactly the time you need to fulfill your financial plan.
On the one hand, the period is quite long. But Ivanov has 4 options for the outcome of events:
- He will achieve his goal exactly on time.
- Will arrive ahead of time.
- By the appointed time, he will not have time to complete everything planned. But he will already have some capital.
- He will spit on everything and spend all the money.
As you can see, 3 out of 4 outcome options are positive. That is, the chance of achieving certain success is quite high.
If you do something, then you have two possible outcomes: it will work out or it won’t work out. If you do nothing, then you only have one left.
A couple of months ago we discussed in detail how to compose . Look at 6 simple steps, after which you can write down your goals in detail, allocate money for them, and even know exactly when your desires will come true.
If you have completed these steps or are just about to start your personal financial plan (personal financial plan), you are faced with the question of how to draw it up quickly and functionally.
You will no longer be bothered by the question: where to get money? You'll be wondering: Where do I add more goals? How to make the budget accessible to everyone in the family? Where should I enter investment interest? And in general, how to put it all together so that it is convenient and understandable? 🙂
You can make an LFP template yourself, use formulas that are convenient for you. Or you can download my template. Use it in its original form or add it to suit your own needs. Create, because it's your money!
Since the template is stored on my Google Drive, you cannot change it. To use the LFP table, copy it for yourself. To do this, go to link and select “File” - “Make a copy” (or “File” - “Make a copy”) from the menu.
Now let's look at all the tabs in detail and I will describe how to use the table.
Page one - GOALS
Of course, at the very beginning we have GOALS. This is done so that first of all we see the desires for which we work!
Write down your goals and calculate how long it will take you to achieve them. How to correctly enter goals, as well as how to correctly calculate the time to achieve it, is described in detail in the article: “ " Look at the article, in it you will find useful life hacks on what to do if a desire is postponed or, on the contrary, fulfilled faster.
In the “Income” cell, enter your monthly income in the currency in which you receive it. I use rubles by default everywhere.
Let's move on to the second page of the Template and see a sheet that often makes people despondent -
Page two - COST PLANNING
Only at first glance it seems that everything is complicated. But no, everything is simple and the table will calculate everything itself 😉
Numbering: the first column, where the percentages are indicated at the bottom. I don't use numbering in the categories so I can rearrange them as I see fit. But I put percentages on desires and goals. This makes it more convenient to navigate if the percentage ratios for goals are different.
Monthly expenses: categories of expenses you spend or save. Now the categories are by definition from the article , but you can change them.
Plan: planning your expenses. How to plan so that you have enough for everything is described in the article.
Fact: Here the formula calculates the average value for all months.
Dates: Now the table starts from November 2017.
How to use:
Enter your monthly income in the cell below the date. In the first month the formula is not needed, but then be careful. You must enter the amount of income not in the cell itself, but in the line with the formula. Look at the example.
Now I set my income at 34,000 rubles. And you, instead of the blue number, enter your income for the last month.
Fill in the lines with expenses. And in the last line you will seeremainder, which you have left for the month
It is automatically transferred to the next month and added to income.
Third page - ASSETS AND LIABILITIES
Let's go to the third and last tab of our table - Assets and Liabilities.
Assets- the money that brings us more money. Bank deposits, profitable investments, securities, apartment for rent, etc. I filled in a line with one bank deposit so you can see an example.
Enter the deposit amount, if any. Then enter the percentage and the table will automatically calculate your annual income.
Liabilities- the opposite part of your money to the asset. Here enter currency (in rubles) in cash, real estate, car, savings kept at home, etc.
Total— the sum of assets and liabilities. This is the amount you own.
Life hacks for using a table
Get creative! Decorate in your favorite colors, use Google emoticons to designate your categories. Bring your own personality to the table and you will notice how you will begin to use it with pleasure.
If you want to update the template usefunctions and formulas Google Sheets. Simplify your life and don't calculate everything manually!
If you did everything correctly, then you will not have a question: How to plan a budget? In just an evening, you will understand what, how much and where to save in order to achieve your financial goals.
The main thing is don’t put it off until later!
And to always feel the support of like-minded people, subscribe to my Instagram or telegram channel Do and Dream. There, among other things, I tell and show how I achieve my goals with the help of a Personal Financial Plan and crazy motivation. And you join our Success Club and know that you will succeed!
It is difficult to imagine a business plan for which you would not have to create calculations. All parts of the business plan require certain calculations: marketing, operational, production.
But the most important in terms of calculations is the financial part of the business plan. It is this that allows us to determine how profitable and sustainable the created business will be.
The financial part should answer the following questions:
- How much money will you need to start a business?
- How much profit will it bring?
- How soon will the business pay off?
- How sustainable and profitable will it be?
Each of these questions is answered by one part of the business plan. This means that the structure of the financial part of the business plan will include sections such as investment costs, profit and loss forecast, cash flow and assessment of project effectiveness.
Investment costs
The first thing you need to do when drawing up a business plan is to calculate in detail how much it will cost to create a business. This will allow the entrepreneur to understand how much money is needed to start a business and whether it is necessary to attract loans.
In this part of the business plan, it is necessary to take into account all the cost items associated with starting a business. For clarity, it is worth referring to an example. Let's consider a business plan for the construction of a car wash with two stations. You will have to invest both in the construction itself and in the purchase of equipment. In general, the list of investment costs for this business will look like this:
- Design work
- Purchase of building materials and construction work
- Connection to electricity, water supply and other utilities
- Equipment purchase
- Installation of equipment
According to the owner of the Moidodyr car wash chain in Kazan, Aidar Ismagilov, the construction of a car wash will cost 30-35 thousand rubles per square meter taking into account design work and communications. The total amount turns out to be quite substantial, which is why rental rather than turnkey construction is now more popular among novice businessmen. In this case, the investment plan will include both rent payments before opening the business and renovation of the premises.
Equipment costs will depend on the type of wash. If the car wash is a manual type, then it will be enough to invest 400 thousand rubles for the equipment. But for an automatic car wash, the costs will be at least 300 thousand euros.
For calculations, it is better to take a certain average price for each expense item. For example, if you need to calculate the costs of renting real estate, you should take into account not the highest and not the most low price per square meter, and the average price on the market. You can determine it by studying rental offers in your city.
It's another matter if the supplier and his price are already known in advance. For example, a car wash requires equipment only from a strictly defined manufacturer. Then the calculations need to include exactly the prices that he offers.
Knowing the required amount of investment will allow you not only to estimate how much money will be needed to start a business, but also how quickly it will pay off.
Profit and loss forecast
If you subtract the amount of its expenses from the amount of business income, you can find out what the net profit is. This indicator shows much better than income what the state of the business is and how much needs to be invested in its further development.
At the beginning of a business, expenses often exceed income, and instead of net profit, a net loss appears. In the first months or even a year of work, this is a normal situation. You shouldn’t be afraid of it: the main thing is that the loss decreases every month.
When making a profit and loss forecast, all indicators should be calculated monthly until the business pays off. At the same time, you should not make the forecast too optimistic: imagine that the income will not be the maximum possible, take the average indicators.
Cash Flow
For a business that is still at the starting stage, it is important to understand not only what its net profit will be. One of the most important indicators is the so-called cash flow. By calculating cash flow, you can determine what the financial condition of the business is and how effective the investments in it are.
Cash flow is calculated as the difference between cash inflows and outflows for a certain period. If we return to the example with a car wash, then in order to calculate the cash flow in the first month of its operation, it is necessary to take the net profit for receipts, and the amount of the initial investment for outflows.
In this case, it will be more convenient to calculate if outflows are designated as a negative number. That is, we add a minus sign to the amount of initial investment in a car wash, and to the resulting number we add net profit in the first month of operation.
To calculate cash flow in the second month, you need to find the difference between the result of the first month and the net profit received in the second month. Since the first month turned out to be a negative number, the net profit must be added to it again. Cash flow in all subsequent months is calculated according to the same scheme.
Project effectiveness assessment
Having predicted the profits and losses, as well as the cash flow of the business, you need to move on to one of the most important sections - assessing its effectiveness. There are many criteria by which the effectiveness of a project is assessed. But for a small business, it is enough to evaluate only three of them: profitability, break-even point and payback period.
Profitability business is one of the most important indicators. In general, in economics there are many different profitability indicators - return on equity, return on assets, return on investment. All of them allow you to assess the effectiveness of a business in its various aspects.
To understand exactly what profitability indicators should be calculated in your business plan, you need to refer to the requirements of the investor or credit institution. If the goal is to evaluate the profitability of the business “for yourself,” it will be enough to calculate the overall profitability of the business.
It's easy to do. It is enough to divide the profit of a business by the amount of its income, and then multiply the resulting number by 100 to get the result as a percentage.
It is difficult to name the optimal indicator of business profitability. It largely depends on the size of the business and the type of activity of the company. For a micro-business with revenue up to 10 million rubles, a profitability rate of 15 - 25% is considered good. The larger the business, the lower the percentage received. In the case of a car wash, the normal profitability indicator is from 10 to 30%, says Aidar Ismagilov.
Another indicator that needs to be calculated is break even. It allows you to determine at what income the company will fully cover its expenses, but will not yet make a profit. You need to know this to understand how strong the business is financially. To find the break-even point, you first need to multiply the business’s income by its fixed expenses, then subtract variable expenses from the income, and then divide the first number obtained by the second.
Fixed costs are those that do not depend on the volume of goods produced or services provided. The business incurs such expenses even when it is idle. In the case of a car wash, these costs include the salaries of accountants and administrators, public utilities and communications, depreciation, loan payments, property taxes, and so on.
Variable costs are everything that changes with changes in production volume. For example, at a car wash, costs that change with an increase or decrease in the number of cars washed are the cost of car chemicals, water consumption, and piecework wages.
Having received as a result of the calculations a certain number, you can relate it to the income statement. In the month when the business's income reaches or exceeds the amount obtained as a result of calculating the break-even point, it will be reached.
Most often, the break-even point is not reached in the first month of business operation, especially if it is related to production. According to Aidar Ismagilov, in the case of a car wash, reaching the break-even point depends on the season. If the sink is opened in a dry summer season When there is little demand for services, they will be unprofitable throughout that season. If the opening occurred during the high demand season, then the break-even point can be reached in the first month.