How to Start your own Financial Planning Firm

A financial advising business helps people set financial goals and plan out a course of action to realize it. Financial planners who work for the business help clients by analyzing budgets, investments, insurance, and other financial products. They make plans for clients and serve a vital role in today’s world, since they have advanced knowledge of both basic and complex financial concepts. They can also teach their clients how to make their own financial plans and act as a coach or guide.

Most people find finance inherently difficult to understand, so a financial planning business bridges the knowledge gap while providing extensive support and tools for clients. The best financial planning businesses don’t just sell products and services. They transform peoples’ lives and get them to think seriously and deeply about money and how it impacts their life and the world.

Learn how to start your own Financial Planning Firm and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Financial Planning Firm Image

Start a financial planning firm by following these 10 steps:

  • Plan your Financial Planning Firm
  • Form your Financial Planning Firm into a Legal Entity
  • Register your Financial Planning Firm for Taxes
  • Open a Business Bank Account & Credit Card
  • Set up Accounting for your Financial Planning Firm
  • Get the Necessary Permits & Licenses for your Financial Planning Firm
  • Get Financial Planning Firm Insurance
  • Define your Financial Planning Firm Brand
  • Create your Financial Planning Firm Website
  • Set up your Business Phone System

We have put together this simple guide to starting your financial planning firm. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

  • What are the startup and ongoing costs?
  • Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Financial Planning Firm Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your financial planning firm?

Business name generator, what are the costs involved in opening a financial planning firm.

Starting a firm requires you to become a registered investment advisor (RIA), registered with your state. You will spend between $10,000 and $20,000 for basic startup costs. Some of these include office rent, your legal documentation (including your form ADV client brochure and fee disclosure), and fees for your vendors. You’ll also need a good contract with a custodian.

What are the ongoing expenses for a financial planning firm?

Ongoing expenses include office upkeep and business liability insurance, rent, errors and omissions insurance, account maintenance fees for a custodian, and labor costs for any staff you retain.

Who is the target market?

The target market for most financial planners is middle-income. However, some advisors find that the upper middle-class or high net worth market is more worthwhile. Bottom line: choose a market that can afford your services and that has money to invest.

How does a financial planning firm make money?

Financial advisory firms make money by charging clients for financial advice, comprehensive plans, and modular plans. Many advisories also charge a fee for managing investments. The fee is usually a percentage of the assets held under management.

The typical fee for assets under management is between 1% and 2%. A typical comprehensive financial plan will cost between $1,800 and $10,000, depending on the client and his or her needs.

How much profit can a financial planning firm make?

A financial planning firm can be very profitable. Most firms have profit margins exceeding 10%, and the most successful ones have profits margins exceeding 20%.

How can you make your business more profitable?

Make your firm more successful by specializing in a specific type of financial planning. For example, you could choose to specialize in education planning, retirement planning, financial planning for millennials, or even non-investment planning.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your financial planning firm is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a financial planning business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Financial Planning Firm needs and how much it will cost you by reading our guide Business Insurance for Financial Planning Firm.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a financial planning firm

Promote your business in your local community using business cards and attend networking events. Let friends, family, and business associates know that you’ve opened a new firm.

How to keep customers coming back

Most clients are reluctant to leave a financial planning firm. However, you can increase the likelihood that they won’t leave by offering clients an immersive experience. Develop a unique culture that fits with your target market.

For example, if your target market is primarily millennials, or younger clients, consider offering perks that they might enjoy.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

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Welcome to the Startup Savant podcast , where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.

Is this Business Right For You?

A financial planner is usually the individual who owns a financial advisory firm. To sit in the CEO’s chair, you must be comfortable working long hours, have a passion for all things financial, and have a special interest in human psychology. 

Many financial decisions are not just about the numbers. They are about the client’s behaviors and how he or she views the world. For example, some investors are concerned about the environment and may eschew investments in fossil fuels, regardless of the mutual fund’s or stock’s long-term return to investors.

Other investors may be more concerned with protecting their principal and earning a conservative rate of return. These investors might only be willing to invest in bonds and bond funds, annuities, permanent life insurance, and conservative bank products.

Some clients may not be comfortable investing their money at all or may not be ready to. Others may need help reigning in spending, or they may be so focused on saving money that they’re living an unhappy life and are coming to you for advice on what to do. Understanding the psychology of different types of people and how each of your clients relates to money will enable you to gain their trust and best serve their long-term financial interests.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a financial planning firm?

Financial planners do a lot of different things during the day. One of the most important tasks is prospecting and marketing. Even large financial firms need to constantly bring in new clients and service existing ones.

Many firms focus on “assets under management” or “AUM”. The more assets under management, the more the firm makes. Thus, most marketing efforts are geared toward bringing more assets to the firm.

Whether that’s making phone calls every day to existing clients (or new prospects), sending out direct mailers, or giving talks and lectures or holding seminars, the principal advisor in a firm is busy.

A financial planner also meets with clients or oversees meetings with his or her top advisors (who meet with clients). A financial planner also sends faxes, drafts financial plans for clients, does a multitude of calculations on financial planning software, and spends time keeping tabs on the financial markets.

What are some skills and experiences that will help you build a successful financial planning firm?

Financial advisors typically have at least some formal education and training in financial planning. Some colleges, like the American College, are set up specifically for this purpose. The specific skills needed by a financial planner include basic and advanced money management skills, the ability to explain complex financial concepts in simple terms, and a deep understanding of financial math, financial markets, and its relevance to human life.

What is the growth potential for a financial planning firm?

A financial planning firm can be small or large. Many firms are one-person operations. However, some financial advisors grow their firms into multi million-dollar companies. Blue Ocean Global Wealth is one example of a large planning firm. Edelman Financial Services is another example of a firm that grew into a household name.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a financial planning firm?

Jump starting your business is easier if you’ve already owned or operated an RIA. Getting clients from existing business or moving clients over from your old broker-dealer relationships will help. Sometimes, however, this cannot be done. Leverage your relationships in your local community.

How and when to build a team

Build a team as soon as you can afford to do so. It doesn’t have to be immediately, however. Most professional financial planners can manage up to 200 to 250 clients without hiring help.

Useful Links

Industry opportunities.

  • Certified Financial Planner Board of Standard
  • Wells Fargo Independent Financial Advisor
  • Financial Planning Association

Real World Examples

  • Interview with Kamien: Inspirational Planning
  • Blue Ocean Global Wealth

Further Reading

  • Going Solo---The True Cost of Starting Your Own Financial Planning Business
  • 6 Steps to Start Your Own Financial Planning Business
  • Starting Your Own Financial Advising Business

Have a Question? Leave a Comment!

How to Write a Small Business Financial Plan

Stairs leading up to a dollar sign. Represents creating a financial plan to achieve profitability.

Noah Parsons

3 min. read

Updated January 3, 2024

Creating a financial plan is often the most intimidating part of writing a business plan. It’s also one of the most vital. Businesses with well-structured and accurate financial statements in place are more prepared to pitch to investors, receive funding, and achieve long-term success.

Thankfully, you don’t need an accounting degree to successfully put your budget and forecasts together. Here is everything you need to include in your financial plan along with optional performance metrics, specifics for funding, and free templates.

  • Key components of a financial plan

A sound financial plan is made up of six key components that help you easily track and forecast your business financials. They include your:

Sales forecast

What do you expect to sell in a given period? Segment and organize your sales projections with a personalized sales forecast based on your business type.

Subscription sales forecast

While not too different from traditional sales forecasts—there are a few specific terms and calculations you’ll need to know when forecasting sales for a subscription-based business.

Expense budget

Create, review, and revise your expense budget to keep your business on track and more easily predict future expenses.

How to forecast personnel costs

How much do your current, and future, employees’ pay, taxes, and benefits cost your business? Find out by forecasting your personnel costs.

Profit and loss forecast

Track how you make money and how much you spend by listing all of your revenue streams and expenses in your profit and loss statement.

Cash flow forecast

Manage and create projections for the inflow and outflow of cash by building a cash flow statement and forecast.

Balance sheet

Need a snapshot of your business’s financial position? Keep an eye on your assets, liabilities, and equity within the balance sheet.

What to include if you plan to pursue funding

Do you plan to pursue any form of funding or financing? If the answer is yes, then there are a few additional pieces of information that you’ll need to include as part of your financial plan.

Highlight any risks and assumptions

Every entrepreneur takes risks with the biggest being assumptions and guesses about the future. Just be sure to track and address these unknowns in your plan early on.

Plan your exit strategy

Investors will want to know your long-term plans as a business owner. While you don’t need to have all the details, it’s worth taking the time to think through how you eventually plan to leave your business.

  • Financial ratios and metrics

With all of your financial statements and forecasts in place, you have all the numbers needed to calculate insightful financial ratios. While these metrics are entirely optional to include in your plan, having them easily accessible can be valuable for tracking your performance and overall financial situation.

Common business ratios

Unsure of which business ratios you should be using? Check out this list of key financial ratios that bankers, financial analysts, and investors will want to see.

Break-even analysis

Do you want to know when you’ll become profitable? Find out how much you need to sell to offset your production costs by conducting a break-even analysis.

How to calculate ROI

How much could a business decision be worth? Evaluate the efficiency or profitability by calculating the potential return on investment (ROI).

  • Financial plan templates and tools

Download and use these free financial templates and calculators to easily create your own financial plan.

how to build financial planning business

Sales forecast template

Download a free detailed sales forecast spreadsheet, with built-in formulas, to easily estimate your first full year of monthly sales.

Download Template

how to build financial planning business

Accurate and easy financial forecasting

Get a full financial picture of your business with LivePlan's simple financial management tools.

Get Started

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See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Noah Parsons

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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Home > Finance > How To Start A Financial Planning Business

How To Start A Financial Planning Business

How To Start A Financial Planning Business

Modified: December 29, 2023

Learn how to start a successful financial planning business with our comprehensive guide. Get expert tips and advice on launching your finance career today!

(Many of the links in this article redirect to a specific reviewed product. Your purchase of these products through affiliate links helps to generate commission for LiveWell, at no extra cost. Learn more )

Table of Contents

Introduction, step 1: define your services, step 2: determine your target market, step 3: develop a business plan, step 4: obtain necessary certifications and licenses, step 5: set up your office and infrastructure, step 6: build your team, step 7: establish your pricing and fee structure, step 8: create a marketing strategy, step 9: network and build relationships, step 10: provide excellent client service.

Welcome to the world of financial planning! Starting a financial planning business can be a rewarding and lucrative venture. As a financial planner, you have the opportunity to assist individuals and businesses in managing their finances, achieving their financial goals, and securing their financial futures. Whether you’re a seasoned professional in the finance industry or someone looking to make a career change, this article will guide you through the essential steps to start your own financial planning business.

Financial planning involves analyzing a client’s financial situation, developing strategies, and providing recommendations to help them achieve their financial objectives. This can include retirement planning, investment management, tax planning, risk management, estate planning, and more. As a financial planner, you will play a crucial role in helping your clients make informed decisions about their money and investments.

Before diving into the world of financial planning, it’s important to have a strong foundation in finance and a deep understanding of the industry. Finance knowledge, coupled with a passion for helping others achieve financial success, will set you on the path to building a successful financial planning business.

In this article, we will walk you through the essential steps to start your financial planning business. From defining your services and target market to developing a business plan and establishing a marketing strategy, we will cover everything you need to know to lay a solid foundation for your business.

So, get ready to embark on this exciting journey of starting your financial planning business. By following these steps and staying committed to providing excellent service to your clients, you can create a thriving business that not only helps others but also brings you financial success and personal fulfillment.

Before you start your financial planning business, it’s essential to clearly define the services you will offer to your clients. Financial planning encompasses a wide range of services, and having a clear understanding of what you can provide will help you attract the right clients and differentiate yourself from competitors.

Start by assessing your skills, expertise, and areas of interest within the finance industry. Consider whether you want to focus on personal financial planning, business financial planning , or both. Personal financial planning typically involves helping individuals with retirement planning, investment management, budgeting, tax planning, and estate planning. Business financial planning, on the other hand, focuses on assisting businesses with financial analysis, cash flow management, risk management, and strategic financial planning.

Once you have determined the scope of your services, it’s essential to establish your unique value proposition. What sets you apart from other financial planners? Is it your specialized knowledge in a specific area of finance? Is it your personalized approach to understanding your clients’ goals and providing tailored solutions? Clearly articulating your unique value proposition will help attract clients who resonate with your approach.

Additionally, consider how you will deliver your services. Will you offer in-person consultations, virtual meetings, or a combination of both? Will you provide ongoing financial management or one-time consultations? Will you offer comprehensive financial plans or specialize in specific areas? Defining your service delivery model will not only help you in planning your business operations but also in setting your pricing structure.

Remember, as a financial planner, your expertise is your greatest asset. It’s important to continually invest in your professional development and stay up to date with industry trends and changes. This will not only enhance your credibility but also enable you to provide the best possible advice and solutions to your clients.

By clearly defining your services, establishing your unique value proposition, and investing in your professional growth, you will be well-positioned to attract clients and build a successful financial planning business.

One of the key factors for success in the financial planning business is identifying and understanding your target market. Your target market is the specific group of individuals or businesses that you will focus on serving with your financial planning services. By narrowing down your target market, you can develop a more tailored approach to meet their unique needs and effectively market your services.

Start by conducting market research to identify potential clients who are most likely to benefit from your expertise. Consider demographics such as age, income level, occupation, and location. Think about the type of clients you feel most passionate about assisting and the specific financial challenges they may face.

For example, you may choose to focus on serving high-net-worth individuals who require comprehensive wealth management services, or you may specialize in helping young professionals navigate their early career financial decisions. Alternatively, you may decide to target small business owners who need assistance with financial planning for their businesses.

Once you have identified your target market, it’s important to conduct a thorough analysis of their needs, preferences, and pain points. This will help you tailor your services and marketing messages to resonate with your target audience. Consider the financial goals and objectives your target market is likely to have and the specific services they may require to achieve those goals.

Understanding your target market will also assist you in determining the most effective marketing channels to reach them. For example, if you are targeting millennials, utilizing social media platforms and digital marketing strategies may be more effective than traditional advertising methods.

Moreover, by narrowing down your target market, you can position yourself as a specialist in addressing their unique financial needs. This specialization can give you a competitive edge and help attract clients who are seeking expertise in their specific financial situation.

Keep in mind that your target market may evolve over time as your business grows and you gain more experience. It’s important to regularly reassess and refine your target market strategy to ensure you are consistently meeting the needs of your ideal clients.

By determining your target market and gaining a deep understanding of their needs, you will be able to tailor your services, marketing efforts, and value proposition to attract and serve clients who are the best fit for your financial planning business.

A solid business plan is crucial for the success of your financial planning business. It will serve as a roadmap, guiding your decisions and actions as you start and grow your business. A well-developed business plan will help you define your business goals, outline your strategies, and identify potential challenges and opportunities.

Begin by clearly defining the vision and mission of your financial planning business. What is the ultimate purpose of your business, and what values will guide your operations? Consider how you want to position your business in the market and what unique value you aim to provide to your clients.

Next, outline your business objectives and set measurable goals. These can include financial goals, such as revenue targets, as well as non-financial goals, such as the number of clients you aim to serve or the geographic reach you want to achieve. Make sure your goals are specific, realistic, and time-bound so that you can track your progress and make necessary adjustments along the way.

Once you have established your goals, develop strategies and action plans to achieve them. This may include marketing and branding strategies, client acquisition and retention strategies, pricing and fee structures, and operational plans. Consider the resources, technology, and infrastructure you will need to support your business operations and deliver exceptional service to your clients.

Additionally, assess the financial aspects of your business and create a detailed financial plan. This includes projecting your startup costs, estimating your revenue and expenses, and determining your pricing structure. Conduct a thorough analysis of the financial viability of your business and create contingency plans for potential risks or downturns in the market.

Remember to include a comprehensive marketing plan in your business strategy. Identify your target market segments, outline your marketing channels and tactics, and establish a budget for your marketing efforts. Your marketing plan should focus on raising awareness about your services, establishing your credibility, and attracting and retaining clients.

Regularly review and revise your business plan as your financial planning business progresses. Keep track of your goals and key performance indicators, analyzing your progress and making necessary adjustments. A business plan is a dynamic document that should evolve alongside your business.

Developing a business plan may require research, market analysis, and a deep understanding of the financial planning industry. Consider seeking guidance from a mentor, attending workshops or courses, or consulting with professionals to ensure your business plan is comprehensive and well-informed.

By developing a thorough business plan, you will have a clear roadmap to guide your financial planning business from its inception to its growth and success.

As a financial planner, it is essential to obtain the necessary certifications and licenses to operate legally and effectively. These credentials not only demonstrate your expertise and credibility but also ensure that you are providing sound financial advice and adhering to industry regulations. Here are some key certifications and licenses to consider:

  • Certified Financial Planner (CFP®): The Certified Financial Planner designation is one of the most recognized and respected certifications in the financial planning industry. To become a CFP®, you must fulfill educational requirements, pass a comprehensive exam, and meet experience and ethics requirements. This certification covers areas such as retirement planning, estate planning, investment management, tax planning, and insurance.
  • Chartered Financial Analyst (CFA®): The Chartered Financial Analyst designation is globally recognized and focuses primarily on investment analysis and portfolio management. Achieving the CFA® designation requires passing three levels of exams, meeting experience requirements, and adhering to a strict code of ethics.
  • Registered Investment Advisor (RIA): If you plan to offer investment advice to clients, you may need to register as an investment advisor with the appropriate regulatory authorities. This registration ensures that you are compliant with regulations governing investment advisory services and provides added credibility to your practice.
  • Insurance Licenses: If you will be offering insurance-related services, such as life insurance or long-term care insurance, you will likely need to obtain relevant insurance licenses. These licenses vary by state and product, so make sure to research the requirements in your area.

It’s important to note that the certifications and licenses required may vary depending on your location and the specific services you offer. Be sure to consult with industry associations, regulatory bodies, and legal professionals to ensure you are aware of the requirements applicable to your financial planning business.

In addition to professional certifications, consider joining professional associations and organizations in the financial planning industry. These memberships can provide valuable networking opportunities, continuing education resources, and access to industry updates and best practices. Some notable associations include the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA).

Obtaining the necessary certifications and licenses demonstrates your commitment to professional standards and assures clients that you have the knowledge and expertise to provide quality financial planning services. It will also give you a competitive advantage in the industry and open doors to new opportunities and partnerships.

Take the time to research and understand the requirements for certifications and licenses in your jurisdiction. By investing in your professional development and ensuring compliance with industry regulations, you will establish yourself as a trusted and reliable financial planner.

Setting up your office and infrastructure is a crucial step in establishing a professional and efficient financial planning business. A well-designed and organized workspace will not only enhance your productivity but also instill confidence in your clients. Here are some key factors to consider when setting up your office:

  • Physical Location: Determine whether you will operate your financial planning business from a physical office or work remotely. If you choose a physical location, consider factors such as accessibility, proximity to your target market, and the overall image it projects. If you opt for a remote setup, ensure you have a dedicated workspace that is quiet, comfortable, and free from distractions.
  • Equipment and Technology: Invest in reliable and up-to-date equipment and technology to support your business operations. This may include computers, software for financial planning analysis, secure data storage, printers, and communication tools such as phones and videoconferencing software.
  • Data Security: Protecting your clients’ personal and financial information is paramount. Implement robust data security measures, including encryption software, firewalls, and secure password protocols. Consider hiring an IT professional to ensure your technology infrastructure is secure and regularly updated.
  • Professional Software: Utilize financial planning software to streamline your processes and provide accurate and comprehensive analysis for your clients. Choose software that aligns with your business needs and supports the services you offer, such as retirement planning, investment management, and tax planning.
  • Compliance and Documentation: Familiarize yourself with industry regulations and compliance requirements. Establish a system to maintain and organize client documents, correspondence, and agreements. Implement compliance measures to ensure you are adhering to legal and ethical standards in your financial planning practice.
  • Administrative Support: Determine whether you will handle administrative tasks yourself or hire support staff to assist you. Administrative tasks may include scheduling client meetings, managing paperwork, bookkeeping, and handling inquiries. Consider outsourcing certain tasks or utilizing virtual assistants to free up your time and focus on client-facing activities.

Remember, the goal is to create an environment that promotes professionalism, efficiency, and client trust. Ensure your office is well-organized and visually appealing, with a comfortable seating area for client meetings. Consider branding elements such as logos, signage, and marketing materials to create a cohesive and professional image.

Lastly, don’t forget about insurance considerations. Protect your business assets, data, and liability by obtaining appropriate insurance coverage, such as professional liability insurance and general business insurance.

By setting up a well-equipped and organized office, you will create an environment that supports your financial planning practice and instills confidence in your clients. Strive for professionalism and efficiency to deliver exceptional service and build a strong foundation for your business.

Building a talented and reliable team is essential for the growth and success of your financial planning business. While you may start as a solopreneur, as your business expands, you may need to bring in additional resources to meet client needs and scale your operations. Here are some considerations for building your team:

  • Identify Roles and Responsibilities: Determine the specific roles and responsibilities needed within your financial planning business. This may include financial planners, investment analysts, administrative staff, marketing professionals, and IT support. Clearly define the job descriptions and expectations for each role.
  • Recruitment and Hiring: Develop a recruitment strategy to attract top talent. Consider posting job openings on job boards, utilizing professional networks, and working with recruitment agencies. Conduct thorough interviews and assessments to ensure you find individuals who align with your company culture and possess the necessary skills and qualifications.
  • Training and Development: Provide ongoing training and professional development opportunities for your team members. This will ensure they stay up-to-date with industry trends, regulations, and best practices. Encourage continuous learning and offer incentives for professional certifications or advanced degrees.
  • Collaboration and Communication: Foster a culture of collaboration and open communication within your team. Encourage brainstorming sessions, regular team meetings, and an open-door policy. Utilize project management tools and communication platforms to facilitate collaboration, particularly if your team is working remotely.
  • Evaluate Performance: Establish performance metrics and conduct regular performance evaluations for your team members. Provide constructive feedback and recognition for achievements. Address any performance issues promptly and offer support and resources for improvement.
  • Delegate and Empower: Learn to delegate tasks and responsibilities effectively. Trust your team members to handle their assigned tasks and empower them to make decisions within their areas of responsibility. This will not only increase productivity but also foster a sense of ownership and accountability.

It’s important to note that as your team grows, you will need to establish policies and procedures to ensure consistency and professionalism in your services. This includes setting clear expectations, establishing workflows, and implementing quality control measures to maintain service standards.

Building a strong team requires careful planning, effective communication, and a commitment to nurturing talent. By assembling a capable and dedicated team, you will enhance your business’s capacity to serve clients, manage growth, and achieve long-term success.

Establishing a clear and competitive pricing structure is a crucial step in running a successful financial planning business. Your pricing strategy should align with the value you provide to clients, cover your costs, and position your business in the market. Here are some key considerations when setting your pricing and fee structure:

  • Market Research: Conduct market research to understand the pricing landscape in your area and within your target market. Analyze what other financial planners with similar services and expertise are charging. This will give you a benchmark for setting your prices. Keep in mind that pricing can vary based on factors such as location, clientele, and specialization.
  • Value-Based Pricing: Consider implementing a value-based pricing approach, where you price your services based on the value and outcomes you deliver to clients. Focus on the benefits and results your clients can expect to achieve through your financial planning expertise. This approach allows you to charge higher fees if you can demonstrate significant value to your clients.
  • Fee Structure: Determine the fee structure that best suits your business and client needs. Common fee structures in financial planning include hourly rates, flat fees, retainer-based fees, and percentage-based fees (based on assets under management or investment performance). Consider the pros and cons of each structure and decide which one aligns with your business model.
  • Transparency: Be transparent about your pricing and fee structure with clients. Clearly communicate your fees and the services included in each package. Provide a breakdown of your services and the benefits clients can expect to receive for the fees they pay. Transparency builds trust and helps clients understand the value they will receive in exchange for their investment.
  • Consider Your Costs: Take into account your business’s operating costs and the time you will spend delivering your services. Factor in expenses such as office rent, technology, software subscriptions, staffing, and marketing. Consider your desired income level and the profitability of your business when setting your prices.
  • Flexibility: Consider offering tiered pricing or customized service packages to cater to varying client needs and budgets. Some clients may require comprehensive financial planning services, while others may only need assistance with specific areas. Offering different pricing options allows you to accommodate a wide range of clients while maximizing your revenue opportunities.

Regularly evaluate and adjust your pricing strategy as needed. Monitor the market, assess client feedback, and review your profitability to ensure your pricing remains competitive and sustainable. Keep in mind that pricing can be a delicate balance between attracting clients and maintaining profitability, so be mindful of making any necessary adjustments.

Remember, pricing is not just about the numbers; it’s also about clearly communicating the value you bring to your clients’ financial lives. By establishing a fair and competitive pricing structure, you will not only position your business for success but also communicate your expertise and commitment to delivering exceptional financial planning services.

A well-crafted marketing strategy is key to attracting clients and growing your financial planning business. Developing a targeted and effective marketing plan will help you reach your ideal clients, differentiate yourself from competitors, and build your brand. Here are some essential steps to create a successful marketing strategy:

  • Define Your Target Audience: Identify your ideal clients and understand their needs, preferences, and pain points. Clearly define their demographics, such as age, income level, occupation, and location. This will allow you to tailor your marketing messages to resonate with your target audience.
  • Brand Positioning: Determine how you want your financial planning business to be perceived in the market. Develop a compelling value proposition that differentiates you from competitors. Consider the unique qualities, expertise, and approach that sets you apart and craft a brand story that connects with your target audience.
  • Online Presence: Establish a professional online presence through a user-friendly and visually appealing website. Optimize your website for search engines with relevant keywords and provide valuable content such as educational articles, blog posts, and client testimonials. Utilize social media platforms to engage with your target audience and share valuable insights.
  • Content Marketing: Create high-quality content that demonstrates your expertise and provides value to your target audience. This can include blog posts, videos, podcasts, and downloadable resources such as guides or ebooks. Share your content through your website, social media channels, and email marketing campaigns to establish yourself as a trusted resource in the financial planning industry.
  • Referral Program: Leverage the power of referrals to expand your client base. Develop a referral program that incentivizes your current clients, professional contacts, and partners to refer new clients to your business. Offer rewards or discounts to those who refer new business your way.
  • Networking: Attend industry events, join professional associations, and participate in networking opportunities to connect with potential clients and referral sources. Build relationships with other professionals, such as attorneys or accountants, who may refer clients to you. Consider giving presentations or educational sessions to establish your expertise and generate leads.
  • Client Testimonials: Request testimonials from satisfied clients and showcase them on your website, social media profiles, and marketing materials. Authentic and positive feedback from past clients can provide social proof and build trust with potential clients.
  • Track and Measure: Implement tracking mechanisms to measure the effectiveness of your marketing efforts. Monitor website analytics, track leads generated from different marketing channels, and assess the return on investment (ROI) of your marketing campaigns. Adjust your strategies based on the data and insights gathered.

Remember, consistency and persistence are key in marketing your financial planning business. Regularly evaluate and refine your marketing strategy based on market trends, client feedback, and your business goals. Stay up-to-date with digital marketing trends and changes in consumer behavior to ensure your marketing efforts remain relevant and impactful.

By creating a comprehensive marketing strategy, you will increase your visibility, attract your ideal clients, and position your financial planning business for long-term success.

Networking and building relationships play a vital role in the success of your financial planning business. By connecting with others in the industry and building a strong professional network, you can gain valuable insights, generate referrals, and expand your client base. Here are some key strategies for effective networking and relationship building:

  • Attend Industry Events: Participate in conferences, seminars, and workshops related to finance, investments, and financial planning. These events offer opportunities to learn from industry experts, stay updated on the latest trends, and connect with like-minded professionals.
  • Join Professional Associations: Become a member of professional associations such as the Financial Planning Association (FPA) or the National Association of Personal Financial Advisors (NAPFA). These associations provide networking opportunities, educational resources, and access to a community of financial planning professionals.
  • Volunteer: Offer your expertise and time to nonprofit organizations, community groups, or educational institutions. Volunteering not only allows you to give back to the community but also provides networking opportunities and helps you establish yourself as a trusted professional in the field.
  • Engage on Social Media: Utilize social media platforms to connect with industry professionals, share valuable insights, and engage with your target audience. Join relevant groups and participate in discussions to expand your network and visibility within the financial planning community.
  • Build Strategic Partnerships: Seek out professionals who complement your services, such as accountants, attorneys, or insurance agents. Establish mutually beneficial partnerships where you can refer clients to each other. This not only expands your network but also enhances your credibility and provides comprehensive solutions to your clients.
  • Host Workshops or Webinars: Organize educational workshops or webinars on financial planning topics to showcase your expertise. These events not only position you as a thought leader but also provide an opportunity to connect with potential clients and generate leads.
  • Nurture Relationships: Cultivate relationships with clients, professional contacts, and industry peers. Stay in touch with past clients through regular communication and periodic check-ins. Maintain a database of contacts and utilize customer relationship management (CRM) tools to manage and nurture your relationships.
  • Be a Resource: Offer value to your network by sharing helpful resources, information, and insights. Provide educational content through your blog, social media platforms, and email newsletters. By positioning yourself as a valuable resource, you will establish trust and credibility with your connections.

Networking and relationship building require genuine effort, time, and consistent engagement. Focus on building meaningful connections, rather than simply collecting business cards. Be authentic, listen actively, and show genuine interest in others.

Remember, successful networking is not just about what you can gain, but also about how you can contribute and add value to others. By fostering relationships within the financial planning industry, you will create opportunities for collaboration, professional growth, and business expansion.

Providing excellent client service is the cornerstone of a successful financial planning business. Satisfied and loyal clients not only become advocates for your services but also contribute to the long-term growth of your business through referrals and repeat business. Here are some key strategies to ensure you deliver exceptional client service:

  • Develop Strong Relationships: Build trust and rapport with your clients by establishing open and transparent communication channels. Listen attentively to their goals, concerns, and aspirations. Foster a personalized approach that demonstrates your genuine care for their financial well-being.
  • Understand Client Needs: Take the time to understand your clients’ unique financial situations and objectives. Conduct thorough fact-finding interviews and gather relevant information that allows you to tailor your financial planning services to their specific needs. Regularly reassess and adjust their financial plans as circumstances change.
  • Educate and Empower: Empower your clients by educating them on financial matters and explaining complex concepts in simple and understandable terms. Provide them with the knowledge and tools to make informed decisions about their finances. Foster a collaborative approach that involves them in the financial planning process.
  • Deliver Timely and Accurate Information: Be prompt and responsive in your communication with clients. Address their queries and concerns promptly, and follow up on action items in a timely manner. Provide accurate and transparent information in all client interactions.
  • Regularly Review Progress: Schedule regular meetings with your clients to review their financial progress and make necessary adjustments to their plans. Keep them informed about market trends, changes in regulations, and any potential impact on their finances. Provide performance reports and updates on the status of their financial goals.
  • Continuing Education and Professional Development: Stay updated with the latest developments in the financial planning industry. Pursue continuing education opportunities, attend seminars and conferences, and maintain relevant certifications. By expanding your knowledge and expertise, you can provide even better service to your clients.
  • Communicate Changes and Updates: Proactively communicate any changes in your services, fees, or business operations to your clients. Keep them informed about market updates, investment strategies, and any relevant regulatory changes that may affect them. Clear and transparent communication fosters trust and demonstrates your commitment to their financial well-being.
  • Solicit and Act on Feedback: Regularly seek feedback from your clients to assess their satisfaction and identify areas for improvement. Actively listen to their suggestions and concerns and take appropriate actions to address them. Regular client feedback surveys or informal feedback sessions can provide valuable insights for enhancing your client service experience.
  • Go the Extra Mile: Surprise and delight your clients by going above and beyond their expectations. Offer personalized touches, such as sending birthday or anniversary greetings, providing helpful resources, or organizing exclusive client events. Small gestures can make a big impact and reinforce your dedication to exceptional client service.

Remember, every client interaction is an opportunity to showcase your commitment to their financial success. By consistently delivering excellent client service, you will build long-lasting relationships, foster client loyalty, and position yourself as a trusted financial advisor.

Congratulations on completing the ten essential steps to start your own financial planning business! By following these steps, you have laid a strong foundation for success in the dynamic and rewarding field of financial planning. Remember, starting a business requires dedication, continuous learning, and a commitment to providing excellent service to your clients.

Throughout this journey, you have defined your services, determined your target market, developed a comprehensive business plan, obtained necessary certifications and licenses, set up your office and infrastructure, built a talented team, established your pricing and fee structure, created a marketing strategy, networked and built relationships, and committed to providing excellent client service.

As you embark on this new venture, remain adaptable and open to new opportunities and challenges. The financial planning industry is constantly evolving, and staying ahead requires a proactive approach and a commitment to ongoing professional development.

Continue to expand your knowledge, seek mentorship, and engage with industry peers. Embrace technology and leverage digital marketing channels to enhance your visibility and attract clients. Invest in building relationships, both within the industry and with your clients, as these connections will contribute to the growth of your business.

Remember, success doesn’t happen overnight. It requires dedication, perseverance, and a commitment to continuous improvement. Stay focused on delivering exceptional service, exceeding client expectations, and adapting to the changing needs of your clients.

With the right skills, expertise, and a passion for helping others achieve their financial goals, your financial planning business has the potential to thrive. By providing valuable insights, strategic guidance, and personalized financial solutions, you can make a significant impact on the lives of your clients and create a rewarding and fulfilling career for yourself.

Best of luck on your journey as a financial planner, and may your business flourish in the exciting world of financial planning!


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How to Start a Financial Advisor Business

how to start your own firm

12 Steps to Starting a Financial Advisor Business

How big is the financial planning & advice industry, what are the key sectors of the financial planning & advice industry, what external factors affect the financial planning & advice industry, who are the key competitors in the financial planning & advice industry, what are the key customer segments in the financial advice market, what are the typical startup costs for a new financial advisor, what are the key costs to launching a successful financial planning firm, is a financial advisor business profitable, what type of financial advisor business model should i choose, what are the keys to launching a new financial advisor business, starting a financial advisor business faqs, other helpful business plan articles & templates.

A financial planning firm is a company that provides financial advising and planning services to individuals and businesses. Financial advisors offer advice on managing investments, insurance, mortgages, and other financial matters. If you’re looking to start your independent financial planning firm, there are a few key things you need to know. 

In this article, we’ll walk you through the process of starting your own financial planning firm and provide tips for launching your business.

Importantly, a critical step in starting a financial planning business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Financial Advisor Business Plan Template here .

Download our Ultimate Financial Advisor Business Plan Template here

1. Figure out your Niche

The financial and investment advisor industry can be very competitive, so you have to find a way to set yourself apart from the rest of the investment advisers out there. Find your niche, and focus on it.

A few niches include:

  • The “mass affluent,” which is a financial services market made up of individuals with investable assets between $100,000 and $1 million.
  • Retirees who have accumulated savings that they can’t afford to lose in a volatile market

2. Choose an Investment Management Style

Once you’ve identified your niche, it’s time to choose a method of financial planning you’re going to focus on. Here are the most popular styles:

  • Asset management – focuses on how much money a client can save in a given year, and helps them budget accordingly
  • Wealth preservation – works with clients to ensure their assets are being protected from market volatility and inflation
  • Income planning – focuses on a client’s long-term financial stability, helping them create a sustainable income flow
  • Consultative sales – offers a wide range of services for large fees that can be covered through loans or investments

3. Consider your Target Audience

Next, think about who you’re targeting. Your ideal audience will be the clients that value your services the most and are more likely to pay for them.

Some things to consider when choosing a target audience include:

  • Geography – where do they live?
  • Age – will they need financial education or wealth preservation services?
  • Wealth – how much money do they already have?
  • Occupation – are they educated professionals, or are they self-employed?
  • Gender – how will this affect your financial advisor marketing strategy ?

      BONUS: Access the “How to Start a Financial Advisor Business” Course Here 

4. find your competitors.

Now it’s time to find out what your competition is up to in the financial advisory industry. Think about whom you’re going after and which companies offer services that might compete with yours.

5. Get your Business Plan in Order

Once you’ve set up your niche, chosen an investment style, identified your target audience, and found out what your competition is doing, it’s time to create a financial planner business plan for success. Your plan should include:

  • A general description of the company
  • The services you will offer
  • A description of the market you plan to target
  • How you will attract clients and get them to pay for your services
  • A financial summary of how much money you need to start a successful business

Be sure to include all of this information in a well-thought-out plan that will help you get funding from investors and convince clients that your financial services are the best choice.

6. Secure Funding for Startup Costs

The nature of a financial advisor business means you will need funding to provide initial marketing, advertising, and operational costs. This is generally done through personal investments by the founders or loans from local banks or other institutions interested in lending money to small businesses.

To get outside funding for your business, follow these steps:

  • Conduct market research to find potential investors and lenders
  • Get referrals from clients or other financial planners you know of in the industry who have already received loans or investments
  • Create a list of possible lenders and investors you want to approach with your business plan
  • Create an advertising plan to show how you will attract clients and make money for your business

Be prepared to answer questions about your financial services, your target audience, and the market in general; also be ready to explain how much startup funding you need and what it will be used for.

How to Finish Your Financial Advisor Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your financial advisor business plan?

With Growthink’s Ultimate Financial Advisor Business Plan Template you can finish your plan in just 8 hours or less!

7. Start Marketing Yourself

Now that you have a financial planner business plan in place, it’s time to start marketing yourself. Begin by creating an online presence and using the Internet to attract potential clients for your services. You can start with these things:

  • A website with specific information about your services, fees, and target market
  • A social media presence on Twitter, Facebook, LinkedIn, etc. to help you promote your business online
  • Blogs related to comprehensive financial planning that allow you to include links back to the main website for clients or potential clients to see

Once you’ve started to build your online presence, start building relationships with other financial advisors in the business. Hang out in chat rooms or forums where they’re already congregating and offer advice whenever possible. This establishes you as an expert in the field to people who might need your services later on.

Building a name for yourself will take time, but starting a financial advisor business is rewarding and you’ll soon find yourself with plenty of new clients.

8. Develop an Elevator Pitch

An elevator pitch is a 30-second explanation of your financial advisor business that you can use to introduce yourself to potential clients. Your investment advisor elevator pitch should highlight the unique aspects of your Financial Advisor business and immediately communicate what makes you stand out from other financial advisors in your Financial Advisor niche.

Focus on capturing attention as soon as possible. Your elevator pitch should be simple and straight to the point; you want your clients to remember what sets you apart from other financial advisors, not a long speech about how great you are.

Pitch yourself at networking events and financial advisor business startup seminars.

9. Create your Client Acquisition Plan

Once you’ve built up an online presence, it’s time to create a client acquisition plan that will help you meet your goals for getting new clients and start bringing in money. To develop this plan, identify your ideal client and decide how exactly you will attract them to your business:

  • What types of clients do you want? What’s the best way to reach them through online and offline marketing?
  • What about referrals from other local financial advisors or people currently using your services? How will you get more referrals to grow your business even faster?
  • How will you make your clients want to spend their money and come back for more services?

Once you’ve identified the right clients and found the best way to attract them, it’s time to start filling those client coffers. You’ll be surprised at how much business can grow from word-of-mouth referrals alone, so don’t hesitate to ask satisfied clients for a referral whenever possible.

10. Work on Client Retention

A happy client is a client who will come back for more services and tell their friends about your financial planning firm. You can stay in touch with clients through digital or paper newsletters, phone calls, text messages, social media, email blasts – whatever works best to keep you at the forefront of their minds.

The first sale is always the hardest, but after that client has purchased a service, you’ll find it much easier to sell them other services down the road. To start this process, create a basic financial plan for your clients; take time to sit down with each of them, identify their needs and goals, and develop an investment strategy that makes sense for their current financial state. You can also offer services like estate planning, tax preparation, and insurance to give your clients more options when they’re ready to expand their financial portfolios.

11. Achieve Success by Setting Goals and Measuring Results

Setting goals is one of the most integral parts of operating a successful business, so it’s important to set clear, attainable goals for your financial advisor business. For example, if you want to grow your client base by attracting ten new clients in the first month of operation, start with smaller goals like attracting five or three new clients and work up from there so you know what to expect throughout the process.

Once you’ve set your initial client goals, develop a strategy for how you’ll measure your progress. Set up Google Analytics or another program to track how many people visit the website and social media presence of your financial planning firm so you can see which sources bring in the most traffic and clients. This will help guide future marketing efforts and help you see what’s really working when it comes to promoting your financial planning business.

12. Get the Training and Licenses You Need to be Successful

Financial advisors are governed by strict legal and ethical standards, so it’s important to get enough training to stay in compliance with both local and federal laws. While many states allow financial planners to operate under their own licenses (and sometimes without any license at all), other states require financial planners to have a license from the Series 65 exam. If you live in one of these regulated states, be sure that your education and experience meet the standards set forth by the state: Finra .

    Want to Start a Successful Financial Advisor Business?

The financial services industry is growing at a rapid pace and continues to grow despite the recent economic downturn. The industry is worth over $59.2 billion and is expected to grow by 4% every year over the next decade.

The financial services industry is made up of five main sectors:

  • Personal Financial Planning and Investment Services – The business of helping individuals make investment decisions along with managing their investments, such as retirement accounts such as 401(k)s and IRAs, stocks or bonds, mutual funds, and retirement savings accounts.
  • Broker Dealer –  The business activities involving buying and selling securities, such as stocks, bonds, and mutual funds on behalf of investors.
  • Trust Services – The business of providing trust, custody, and related services to customers/clients who have entrusted their money or investment products with the financial institution.
  • Financial Management Consulting – The business of providing one-time financial management and planning services to clients.
  • Estate Planning Services – The business of providing financial advice and services to clients when they are ready to distribute their assets after death.

The financial planning and advice industry is affected by external factors such as market performance, economic trends, and the overall state of the economy.

For example, advisors that focus on selling investments or providing investment services must consider the performance of the stock market. If the market is performing well and people feel good about their money, it’s likely they’ll invest more funds in stocks, which will affect how brokers make a living.

The other external factors that affect the financial planning profession are macroeconomic trends that affect the population’s confidence in the economy.

For example, during an economic recession, it’s important for financial advisors to understand that their clients may be more risk-averse, and not investing as much money into stocks or mutual funds would be wise.

On the other hand, if the economy is doing well and people are feeling confident about their financial stability, then it’s wise to invest more money into stocks.

The financial planning and advice industry is highly competitive, and there are over 130,000 financial advisors in the United States alone. Although many of these advisors work for large financial institutions such as banks and credit unions, many others run their own business full-time or on a part-time basis.

Some of the key competitors in the financial advising industry are:

  • Banks & Credit Unions – These financial institutions provide many of the same services as a financial advisor, such as investment advice and personal finance guidance. They can be a source of competition for advisors because they’re equipped with similar services, but they don’t necessarily compete directly in terms of clientele.
  • Insurance Companies – These financial institutions provide services such as life insurance and annuities, so they can be a source of competition for advisors if the advisor is also selling these types of products.
  • Other Financial Advisors – Most financial advisors have to compete with other advisors from the same company, especially within a large financial advisory firm where each advisor specializes in a different investing sector.

The financial advising industry provides services to individuals of all income levels, but there are some key differences in the type of client each advisor typically deals with.

  • High-Income Clients – These clients have a high net worth and can afford to hire an advisor on a full-time or part-time basis. They’re typically more willing to pay for financial advice and services, especially if the advisor specializes in a specific industry that pertains to their financial situation.
  • Middle-Income Clients – These clients have a moderate net worth and can afford to hire an advisor on a part-time basis for monthly or quarterly checkups. They’re often satisfied with what they receive from the financial advisor, but typically don’t require as much service or attention to their finances.
  • Lower-Income Clients – These clients typically have a low income and struggle with managing their personal finances on their own. They’re more likely to benefit from the types of services that advisors provide, such as budgeting advice or debt management plans.

From growing family needs to save for retirement, financial advisors provide services that help clients meet their individual goals.

Financial advisors have two primary types of startup costs: the cost to set up a legal entity for their new company and ongoing costs that must be met in order to keep the business running.

The Legal Entity

If you want to set up a financial advisor business, you’ll need to create a legal entity for your company. Your startup costs will depend on how you choose to structure your company, but these options are the most common:

  • Sole Proprietorship – This is the cheapest option for creating a legal entity, but it also provides the least amount of tax-related benefits.
  • Partnership – This is another cheap option for starting your company, but it requires at least one other co-founder who contributes to the partnership equally.
  • Corporation – You can register an S Corporation or C Corporation through your state’s Secretary of State’s office, but this type of entity comes with the highest startup costs.

Ongoing Business Expenses

The other primary cost you’ll need to consider when starting a financial advisor business is how much it will cost to keep your company running on a monthly basis. These are some common expenses that every financial advisor has to pay:

  • Salary and Wages – The cost of hiring employees and freelancers can vary significantly, depending on their expertise and area of focus.
  • Insurance Costs – These costs will typically include life insurance, health insurance, and business liability insurance.
  • Utilities – You’ll need to pay for electricity, water, internet access, telephone services, and other standard utilities to keep your business running.
  • Loans – Any loans you take out will need to be paid back within a set amount of time, which will add to your ongoing expenses.

The good news is that there are many different financial advisor business models you can choose from depending on what startup costs you’re able to cover. You can either start a full-service financial planning company, which will require more overhead because you’ll need to hire employees and freelancers, or you can start a fee-only financial planning company that only charges clients through the services they use.

The key costs you’ll need to cover when launching a successful financial planning company include:

  • Operating Expenses – These are the ongoing fees that make it possible for your financial planning firm to remain in operation, such as paying for employees and freelancers, insurance costs, and other standard utilities.
  • Technology – The more sophisticated your technology needs become, the more financial resources you’ll need to cover them. For example, if you want to offer clients the ability to submit their financial plan proposals online and check on their progress towards goals with web-based software and apps, you’ll need to cover the initial investment.
  • Marketing – Marketing costs typically include online advertising, trade magazine ads, direct mail campaigns, and other promotional expenses.
  • Additional Costs – These additional costs will vary depending on the financial advisor model you choose to adopt, but they could include anything from client meetings in person at their homes or place of business to covering the cost of hiring freelancers.

Even though you’ll need to invest money initially, having your own financial planning company can save you thousands of dollars per month in fees, which means that advisors who go independent typically recoup their startup costs within three years. Plus, once you establish yourself as a success and gain clients, you’ll be able to cut back on your marketing expenses, which means that you’ll see a return on investment much sooner.

The amount of money you’ll make as a financial advisor depends on how much work you put into establishing your business and what financial advisor business model you adopt. Advisors who work with institutions and rely on investments to generate their income will generally earn more money annually compared to smaller financial advisory businesses.

When you launch a financial advisor business, you’ll need to choose between the following business models: fee-only financial planning, concierge service, and full-service.

  • Fee-Only Financial Planning – This type of financial planner typically charges clients hourly rates for consultations and other services, and there are no commissions or fees involved. Most fee-only financial planners work with clients on a retainer basis instead of just a one-time consultation.
  • Concierge Service – Under this model, advisors typically charge based on the services they provide rather than an hourly rate or retainer. For example, you can charge clients by the hour for phone consultations or monthly fees for access to planning tools.
  • Full-Service – As a full-service financial advisor, you can offer all types of services to your clients without having to specialize in one specific discipline. This model is typically only appropriate if you have enough financial resources to hire other advisors and financial planners, such as accountants and tax specialists.

The model you choose to adopt depends on the financial advisor business you establish. For example, if you plan to launch a fee-only financial planning business that offers high levels of personalized service, then you’ll probably want to choose the concierge service model for your business. If you’re more likely to attract prospective clients who are interested in investing their money with you, then you’ll likely want to choose the full-service financial advisor business model.

Once you’ve decided on a financial advisor business model and have gathered all of the necessary tools, it’s time to launch your new company. Below are some tips for a successful launch:

  • Set Up Your Business – Before you can begin offering any services as a financial advisor, you’ll need to set up your business. You’ll want to choose a business structure, create your company’s website and social media pages, and get all of the necessary licenses.
  • Establish Relationships – Even though you can launch a financial advisor business online by establishing an online presence through websites and social media platforms, you’ll most likely want to establish personal relationships with clients by meeting face-to-face. Whether you travel to meet with clients or find a suitable office space to work from, building relationships is essential for your financial advisor business’ success.
  • Market Yourself – In order to attract as many prospects as possible and stand out from other financial advisors, it’s important that you market yourself properly. Through your company website and social media pages, you can post articles, blog posts, and videos that educate consumers about financial planning.
  • Reach Out to Clients – Once you’ve reached out to prospects and generated some interest in your financial advisor business, it’s important that you reach out to clients frequently. You can do so through email or phone contacts, online surveys, or social media engagement.
  • Grow Your Business – To grow your financial business, you’ll need to develop a sound business strategy and create a long-term plan. You’ll also want to establish goals that will make it easier for you to meet your financial targets.

Additional Resources

Financial Advisor Mavericks

What are the qualifications needed to start a financial advisor business?

To start a financial advisor business, you'll typically need at least two to three years of experience in the financial planning field. You can meet this requirement by holding various financial planning positions or taking relevant online courses and continuing education classes.

How can I find financial and investment advisor business leads?

The best way to find financial planning leads is by utilizing your company website or social media pages. You can also track down prospects through online directories, referrals from friends, personal networking engagements, and cold calling techniques.

What are the benefits of starting a financial advisory business?

The primary benefit of launching your own financial advisor business is establishing control over how you make money. Aside from that, there are many other benefits including building lasting relationships with clients, gaining greater flexibility in your work schedule, and enjoying the satisfaction that comes with helping others achieve their financial goals.

What are the risks of starting a financial advisory business?

One of the main risks associated with launching a financial advisor business is going into debt. You'll want to have at least six months' worth of living expenses saved up as well as an emergency fund in place to help balance this risk out. Another risk to consider is not having enough time to focus on your company due to the demands of your full-time job.

Who are some successful financial advisors?

A few well-known, highly successful financial advisors include Charles Schwab, Kenneth Fisher, and David Bach. These advisors have written numerous books on their financial strategies and how they can be applied to everyday life.

What is my financial advisor business plan?

In order to become a financial advisor, you'll need to have a sound financial advisor business plan in place. It will help you determine how much money you'll need to make the annual salary you desire, your marketing strategies going forward, and how much money you can spend on expenses each month.

How do I become a registered investment advisor?

In order to become a registered investment advisor, you'll need to meet certain requirements regarding your education and professional background as well as pass the Series 7 exam. You can find out more about the requirements by visiting websites such as Investment Adviser Association or FINRA.

Where Can I Download a Financial Advisor Business Plan PDF?

You can download our financial advisor business plan PDF template here. This is a business plan template you can use in PDF format.

Business Plan Template & Guide For Small Businesses

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Grow Your Financial Advisory Firm Fast with These Tips

how to build financial planning business

Launching a financial advisory business is hard, and that's an understatement. It's full of long days of trying to market your firm and sell your services without getting to do what you really want — work one-on-one with clients.

All you really wanted to do when you started your practice is to help people save and plan for their futures . To make their dreams come true. Yet now you just find yourself drained, both emotionally and physically.

Now you are left wondering, "How can I grow my firm and do it quickly so I can start doing what I really want to do?" Before we get into some ways to grow your business , let's first talk about the word "quickly."

What It's All About

Growing a financial advisory firm, especially from scratch, can take years, and there is a very good reason for this. A financial advisory business is not about the investments or the plan. It is about the relationships you foster with clients. Before anyone will put their money with you they want to know, like and trust you. Very rarely do you meet someone at a networking dinner and they sign up for your services the next morning. They need time to get to know you before they hand over their hard-earned dollars.

With that in mind, you should approach marketing in a way that focuses on building trust and a relationship. Unfortunately, that does not always happen quickly. But if you continually work on getting prospective clients to know, like and trust you, then it will happen faster than if your marketing isn't focused on relationship building.

Here are three ways to grow your practice while focusing on the relationship.

New-Age Networking

Networking is not a new technique for trying to build your firm, but seldom do you see financial advisors doing it the right way. Instead of going in looking for leads, go into every event looking to start a friendship. Even if the folks you encounter won't ever be clients, look to learn how you can help them without asking for anything in return.

Remember what mighty salesman Zig Ziglar said: "You can have everything in life you want, if you will just help other people get what they want." Network to make friends and help others grow and you will begin to build relationships with others who will happily refer you or become your client because they know, like and trust you.

Valuable Volunteering

Find one or two non-profit organizations you like and start volunteering your time. This is a great way to meet people with similar interests, help the community and build new relationships. After working with the same organization for a while, you will start to establish relationships with those around you. They get to know and trust you because of how you follow through and donate your free time to help others. 

When people ask for referrals to an advisor, your name will come to mind. Again, remember that people refer people that they know and trust, and being selfless in a volunteer situation can help make this happen.

Try Public Speaking

Speaking in front of groups is a great way to build credibility and to get your name out. When you speak in front of someone, you are automatically looked at as the expert. There is, however, one thing to keep in mind as you try and build trust with new prospects: Don't sell.

This may go against what most people say you should do at the end of a presentation, but because you're in the financial industry, most people are automatically looking for the sell, the catch. Approach your talk from an educational perspective, where listeners can take the information out of the room and still make it work for them. Then when they need someone to help, they may be more inclined to call you.

There are two things you can do to open the door for the audience to come to you. First, tell everyone that you will stick around after the presentation to answer any questions. This will allow those that are interested to come up and start the conversation so they feel like they are in charge. Second, tell the audience that if they want a copy of the slides, they should e-mail you so you can send them over. This way they can initiate contact to get something; it's not an in-your-face sales tactic.

The Bottom Line

The fastest way to grow your advisory business is to create a scenario where people know you, like you and trust you. Do this by helping others achieve their goals and by educating without selling. You will be amazed at how fast your business grows.

how to build financial planning business

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4 Steps to Creating a Financial Plan for Your Small Business

Rami Ali

When it comes to long-term business success, preparation is the name of the game. And the key to that preparation is a solid financial plan that sets forth a business’s short- and long-term financial goals and how it intends to reach them. Used by company decision-makers and potential partners, investors and lenders, alike, a financial plan typically includes the company’s sales forecast, cash flow projection, expected expenses, key financial metrics and more. Here is what small businesses should understand to create a comprehensive financial plan of their own.

What Is a Financial Plan?

A financial plan is a document that businesses use to detail and manage their finances, ensure efficient allocation of resources and inform a plethora of decisions — everything from setting prices, to expanding the business, to optimizing operations, to name just a few. The financial plan provides a clear understanding of the company’s current financial standing; outlines its strategies, goals and projections; makes clear whether an idea is sustainable and worthy of investment; and monitors the business’s financial health as it grows and matures. Financial plans can be adjusted over time as forecasts become replaced with real-world results and market forces change.

A financial plan is an integral part of an overall business plan, ensuring financial objectives align with overall business goals. It typically contains a description of the business, financial statements, personnel plan, risk analysis and relevant key performance indicators (KPIs) and ratios. By providing a comprehensive view of the company’s finances and future goals, financial plans also assist in attracting investors and other sources of funding.

Key Takeaways

  • A financial plan details a business’s current standing and helps business leaders make informed decisions about future endeavors and strategies.
  • A financial plan includes three major financial statements: the income statement, balance sheet and cash flow statement.
  • A financial plan answers essential questions and helps track progress toward goals.
  • Financial management software gives decision-makers the tools they need to make strategic decisions.

Why Is a Financial Plan Important to Your Small Business?

A financial plan can provide small businesses with greater confidence in their short- and long-term endeavors by helping them determine ways to best allocate and invest their resources. The process of creating the plan forces businesses to think through how different decisions could impact revenue and which occasions call for dipping into reserve funds. It’s also a helpful tool for monitoring performance, managing cash flow and tracking financial metrics.

Simply put, a financial plan shows where the business stands; over time, its analysis will reveal whether its investments were worthwhile and worth repeating. In addition, when a business is courting potential partners, investors and lenders, the financial plan spotlights the business’s commitment to spending wisely and meeting its financial obligations.

Benefits of a Financial Plan

A financial plan is only as effective as the data foundation it’s built on and the business’s flexibility to revisit it amid changing market forces and demand shifts. Done correctly, a financial plan helps small businesses stay on track so they can reach their short-term and long-term goals. Among the benefits that effective financial planning delivers:

  • A clear view of goals and objectives: As with any type of business plan, it’s imperative that everyone in a company is on the same financial page. With clear responsibilities and expected results mapped out, every team member from the top down sees what needs to be done, when to do it and why.
  • More accurate budgets and projections: A comprehensive financial plan leads to realistic budgets that allocate resources appropriately and plan for future revenue and expenses. Financial projections also help small businesses lay out steps to maintain business continuity during periods of cash flow volatility or market uncertainty.
  • External funding opportunities: With a detailed financial plan in hand, potential partners, lenders and investors can see exactly where their money will go and how it will be used. The inclusion of stellar financial records, including past and current liabilities, can also assure external funding sources that they will be repaid.
  • Performance monitoring and course correction: Small businesses can continue to benefit from their financial plans long after the plan has been created. By continuously monitoring results and comparing them with initial projections, businesses have the opportunity to adjust their plans as needed.

Components of a Small Business Financial Plan

A sound financial plan is instrumental to the success and stability of a small business. Whether the business is starting from scratch or modifying its plan, the best financial plans include the following elements:

Income statement: The income statement reports the business’s net profit or loss over a specific period of time, such a month, quarter or year. Also known as a profit-and-loss statement (P&L) or pro forma income statement, the income statement includes the following elements:

  • Cost of goods sold (COGS): The direct costs involved in producing goods or services.
  • Operating expenses: Rent, utilities and other costs involved in running the business.
  • Revenue streams: Usually in the form of sales and subscription services, among other sources.
  • Total net profit or loss: Derived from the total amount of sales less expenses and taxes.

Balance sheet: The balance sheet reports the business’s current financial standing, focusing on what it owns, what it owes and shareholder equity:

  • Assets: Available cash, goods and other owned resources.
  • Liabilities: Amounts owed to suppliers, personnel, landlords, creditors, etc.

Shareholder equity: Measures the company’s net worth, calculated with this formula:

Shareholder Equity = Assets – Liability

The balance sheet lists assets, liabilities and equity in chart format, with assets in the left column and liabilities and equity on the right. When complete — and as the name implies —the two sides should balance out to zero, as shown on the sample balance sheet below. The balance sheet is used with other financial statements to calculate business financial ratios (discussed soon).

Balance Sheet

Cash flow projection: Cash flow projection is a part of the cash flow statement , which is perhaps one of the most critical aspects of a financial plan. After all, businesses run on cash. The cash flow statement documents how much cash came in and went out of the business during a specific time period. This reveals its liquidity, meaning how much cash it has on hand. The cash flow projection should display how much cash a business currently has, where it’s going, where future cash will come from and a schedule for each activity.

Personnel plan: A business needs the right people to meet its goals and maintain a healthy cash flow. A personnel plan looks at existing positions, helps determine when it’s time to bring on more team members and determines whether new hires should be full-time, part-time or work on a contractual basis. It also examines compensation levels, including benefits, and forecasts those costs against potential business growth to gauge whether the potential benefits of new hires justify the expense.

Business ratios: In addition to a big-picture view of the business, decision-makers will need to drill down to specific aspects of the business to understand how individual areas are performing. Business ratios , such as net profit margin, return on equity, accounts payable turnover, assets to sales, working capital and total debt to total assets, help evaluate the business’s financial health. Data used to calculate these ratios come from the P&L statement, balance sheet and cash flow statement. Business ratios contextualize financial data — for example, net profit margin shows the profitability of a company’s operations in relation to its revenue. They are often used to help request funding from a bank or investor, as well.

Sales forecast: How much will you sell in a specific period? A sales forecast needs to be an ongoing part of any planning process since it helps predict cash flow and the organization’s overall health. A forecast needs to be consistent with the sales number within your P&L statement. Organizing and segmenting your sales forecast will depend on how thoroughly you want to track sales and the business you have. For example, if you own a hotel and giftshop, you may want to track separately sales from guests staying the night and sales from the shop.

Cash flow projection: Perhaps one of the most critical aspects of your financial plan is your cash flow statement . Your business runs on cash. Understanding how much cash is coming in and when to expect it shows the difference between your profit and cash position. It should display how much cash you have now, where it’s going, where it will come from and a schedule for each activity.

Income projections: Businesses can use their sales forecasts to estimate how much money they are on track to make in a given period, usually a year. This income projection is calculated by subtracting anticipated expenses from revenue. In some cases, the income projection is rolled into the P&L statement.

Assets and liabilities: Assets and liabilities appear on the business’s balance sheet. Assets are what a company owns and are typically divided into current and long-term assets. Current assets can be converted into cash within a year and include stocks, inventory and accounts receivable. Long-term assets are tangible or fixed assets designed for long-term use, such as furniture, fixtures, buildings, machinery and vehicles.

Liabilities are business obligations that are also classified as current and long-term. Current liabilities are due to be paid within a year and include accrued payroll, taxes payable and short-term loans. Long-term liabilities include shareholder loans or bank debt that mature more than a year later.

Break-even analysis: The break-even point is how much a business must sell to exactly cover all of its fixed and variable expenses, including COGS, salaries and rent. When revenue exceeds expenses, the business makes a profit. The break-even point is used to guide sales revenue and volume goals; determination requires first calculating contribution margin , which is the amount of sales revenue a company has, less its variable costs, to put toward paying its fixed costs. Businesses can use break-even analyses to better evaluate their expenses and calculate how much to mark up its goods and services to be able to turn a profit.

Four Steps to Create a Financial Plan for Your Small Business

Financial plans require deliberate planning and careful implementation. The following four steps can help small businesses get started and ensure their plans can help them achieve their goals.

Create a strategic plan

Before looking at any numbers, a strategic plan focuses on what the company wants to accomplish and what it needs to achieve its goals. Will it need to buy more equipment or hire additional staff? How will its goals affect cash flow? What other resources are needed to meet its goals? A strategic financial plan answers these questions and determines how the plan will impact the company’s finances. Creating a list of existing  expenses  and assets is also helpful and will inform the remaining financial planning steps.

Create financial projections

Financial projections should be based on  anticipated expenses and sales forecasts . These projections look at the business’s goals and estimate the costs needed to reach them in the face of a variety of potential scenarios, such as best-case, worst-case and most likely to happen. Accountants may be brought in to review the plan with stakeholders and suggest how to explain the plan to external audiences, such as investors and lenders.

Plan for contingencies

Financial plans should use data from the cash flow statement and balance sheet to inform worst-case scenario plans, such as when incoming cash dries up or the business takes an unexpected turn. Some common contingencies include keeping cash reserves or a substantial line of credit for quick access to funds during slow periods. Another option is to produce a plan to sell off assets to help break even.

Monitor and compare goals

Actual results in the cash flow statement, income projections and relevant business ratios should be analyzed throughout the year to see how closely real-life results adhered to projections. Regular check-ins also help businesses spot potential problems before they can get worse and inform course corrections.

Three Questions Your Financial Plan Should Answer

A small business financial plan should be tailored to the needs and expectations of its intended audience, whether it is potential investors, lenders, partners or internal stakeholders. Once the plan is created, all parties should, at minimum, understand:

How will the business make money?

What does the business need to achieve its goals?

What is the business’s  operating budget ?

Financial plans that don’t answer these questions will need more work. Otherwise, a business risks starting a new venture without a clear path forward, and decision-makers will lack the necessary insights that a detailed financial plan would have provided.

Improve Your Financial Planning With Financial Management Software

Using spreadsheets for financial planning may get the job done when a business is first getting started, but this approach can quickly become overwhelming, especially when collaborating with others and as the business grows.

NetSuite’s cloud-based financial management platform simplifies the labor-intensive process through automation. NetSuite Planning and Budgeting automatically consolidates real-time data for analysis, reporting and forecasting, thereby improving efficiency. With intuitive dashboards and sophisticated forecasting tools, businesses can create accurate financial plans, track progress and modify strategies in order to achieve and maintain long-term success. The solution also allows for scenario planning and workforce planning, plus prebuilt data synchronization with NetSuite ERP means the entire business is working with the same up-to-date information.

Whether a business is first getting started, looking to expand, trying to secure outside funding or monitoring its growth, it will need to create a financial plan. This plan lays out the business’s short- and long-term objectives, details its current and projected finances, specifies how it will invest its resources and helps track its progress. Not only does a financial plan guide the business along its way, but it is typically required by outside sources of funding that don’t invest or lend their money to just any company. Creating a financial plan may take some time, but successful small businesses know it is well worth the effort.

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Small Business Financial Plan FAQs

How do I write a small business financial plan?

Writing a small business financial plan is a four-step process. It begins with creating a strategic plan, which covers the company’s goals and what it needs to achieve them. The next step is to create financial projections, which are dependent on anticipating sales and expenses. Step three plans for contingencies: For example, what if the business were to lose a significant client? Finally, the business must monitor its goals, comparing actual results to projections and adjusting as needed.

What is the best financial statement for a small business?

The income statement, also known as the profit and loss (P&L) statement, is often considered the most important financial statement for small businesses, as it summarizes profits and losses and the business’s bottom line over a specific financial period. For financial plans, the cash flow statement and the balance sheet are also critical financial statements.

How often should businesses update their financial plans?

Financial plans can be updated whenever a business deems appropriate. Many businesses create three- and five-year plans and adjust them annually. If a market experiences a large shift, such as a spike in demand or an economic downturn, a financial plan may need to be updated to reflect the new market.

What are some common mistakes to avoid when creating a small business financial plan?

Some common mistakes to avoid when creating a small business financial plan include underestimating expenses, overestimating revenue, failing to plan for contingencies and adhering to plans too strictly when circumstances change. Plans should be regularly updated to reflect real-world results and current market trends.

How do I account for uncertainty and potential risks in my small business financial plan?

Small businesses can plan for uncertainty by maintaining cash reserves and opening lines of credit to cover periods of lower income or high expenses. Plans and projections should also take into account a variety of potential scenarios, from best case to worst case.

What is a typical business financial plan?

A typical business financial plan is a document that details a business’s goals, strategies and projections over a specific period of time. It is used as a roadmap for the organization’s financial activities and provides a framework for decision-making, resource allocation and performance evaluation.

What are the seven components of a financial plan?

Financial plans can vary to suit the business’s needs, but seven components to include are the income statement, operating income, net income, cash flow statement, balance sheet, financial projections and business ratios. Various financial key performance indicators and a break-even analysis are typically included as well.

What is an example of a financial plan?

A financial plan serves as a snapshot of the business’s current standing and how it plans to grow. For example, a restaurant looking to secure approval for a loan will be asked to provide a financial plan. This plan will include an executive summary of the business, a description and history of the company, market research into customer base and competition, sales and marketing strategies, key performance indicators and organizational structure. It will also include elements focusing on the future, such as financial projections, potential risks and funding requirements and strategies.

Financial Management

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Small Business Financial Management: Tips, Importance and Challenges

It is remarkably difficult to start a small business. Only about half stay open for five years, and only a third make it to the 10-year mark. That’s why it’s vital to make every effort to succeed. And one of the most fundamental skills and tools for any small business owner is sound financial management.

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Financial Planning: A Step-by-Step Guide

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What is a financial plan?

A financial plan is a comprehensive picture of your current finances, your financial goals and any strategies you've set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.

What is financial planning?

Financial planning is an ongoing process that looks at your entire financial situation in order to create strategies for achieving your short- and long-term goals. It can reduce your stress about money, support your current needs and help you build a nest egg for goals such as retirement.

Creating a financial plan is important because it allows you to make the most of your assets and gives you the confidence to weather any bumps along the way. You can make a financial plan yourself or get help from a financial planning professional. Online services like robo-advisors have also made getting assistance with financial planning more affordable and accessible than ever.

» Ready to get started? See our roundup of the best financial advisors

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9 steps in financial planning

1. set financial goals.

A good financial plan is guided by your financial goals. If you approach your financial planning from the standpoint of what your money can do for you — whether that's buying a house or helping you retire early — you'll make saving feel more intentional.

Make your financial goals inspirational. Ask yourself: What do I want my life to look like in five years? What about in 10 and 20 years? Do I want to own a car, or a house? Do I want to be debt-free? Pay off my student loans? Are kids in the picture? How do I imagine my life in retirement?

Having concrete goals can make it easier to identify and complete the next steps, and provide a guiding light as you work to make those aims a reality.

Financial Goals: Where to Begin

How to Set Financial Goals

2. Track your money

Get a sense of your monthly cash flow — what’s coming in and what’s going out. An accurate picture is key to creating a financial plan and can reveal ways to direct more to savings or debt pay-down. Seeing where your money goes can help you develop immediate, medium-term and long-term plans.

For example, developing a budget is a typical immediate plan. NerdWallet recommends the 50/30/20 budget principles: Put 50% of your take-home pay toward needs (housing, utilities, transportation and other recurring payments), 30% toward wants (dining out, clothing, entertainment) and 20% toward savings and debt repayment. Reducing credit card or other high-interest debt is a common medium-term plan, and planning for retirement is a typical long-term plan.

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3. Budget for emergencies

The bedrock of any financial plan is putting cash away for emergency expenses. You can start small — $500 is enough to cover small emergencies and repairs so that an unexpected bill doesn’t run up credit card debt. Your next goal could be $1,000, then one month’s basic living expenses, and so on.

Building credit is another way to shockproof your budget. Good credit gives you options when you need them, like the ability to get a decent rate on a car loan. It can also boost your budget by getting you cheaper rates on insurance and letting you skip utility deposits.

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Emergency Fund: What It Is and Why It Matters

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4. Tackle high-interest debt

A crucial step in any financial plan: Pay down high-interest debt, such as credit card balances, payday loans, title loans and rent-to-own payments. Interest rates on some of these may be so high that you end up repaying two or three times what you borrowed.

If you’re struggling with revolving debt, a debt consolidation loan or debt management plan may help you wrap several expenses into one monthly bill at a lower interest rate.

Pay Off Debt: Tools and Tips

How to Pay Off Debt Fast: 7 Tips

5. Plan for retirement

If you visit a financial advisor , they will be sure to ask: Do you have an employer-sponsored retirement plan such as a 401(k) , and does your employer match any part of your contribution? True, 401(k) contributions decrease your take-home pay now, but it’s worth it to consider putting in enough to get the full matching amount. That match is free money.

If you have a 401(k), 403(b) or similar plan, financial advisors also generally suggest that you gradually expand your contributions toward the IRS limit. $23,000 in 2024 ($30,500 for those age 50 or older)

Another savings vehicle for retirement planning is an IRA , or individual retirement arrangement. These tax-advantaged investment accounts can further build retirement savings. The contribution limit is $7,000 in 2024 ($8,000 if age 50 or older) .

How Much Should I Contribute to a 401(k)?

IRA Contribution Limits Explained

6. Optimize your finances with tax planning

For many of us, taxes take center stage during filing season, but careful tax planning means looking beyond the Form 1040 you submit to the IRS each year.

For example, if you're netting a sizable refund each year, you may be needlessly living on less throughout the year. Learning how and when to review your W-4 , the form you fill out with employers, can help you to take control of your future. Adjust your withholdings on your W-4, and you either can keep more of your paycheck, or pay a smaller tax bill.

Getting cozy with the tax law also means looking into tax credits and deductions ahead of time to understand which tax breaks could make a difference when it comes time to file. The government offers many incentives for taxpayers who have children, invest in green home improvements or technologies, or are even pursuing higher education.

Tax Planning for Beginners: 6 Tax Strategies & Concepts to Know

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7. Invest to build your future goals

Investing might sound like something for rich people or for when you’re established in your career and family life. It’s not. Investing can be as simple as putting money in a 401(k) and as easy as opening a brokerage account (many have no minimum to get started). Financial plans use a variety of tools to invest for retirement, a house or college.

How to Invest Money: Choosing the Best Way To Invest for You

How To Invest in Stocks

Saving for Education: 529 Plan Rules and Contribution Limits

8. Grow your financial well-being

With each of these steps, you're protecting yourself from financial setbacks. If you can afford it, decide whether you'd like to do more, such as:

Increasing contributions to your retirement accounts.

Padding your emergency fund until you have three to six months of essential living expenses.

Using insurance to protect your financial stability, so a car crash or illness doesn’t derail you. Life insurance protects loved ones who depend on your income. Term life insurance, covering 10-year to 30-year periods, is a good fit for most people’s needs.

Backdoor Roth IRA: What It Is and How to Set One Up

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9. Estate planning: Protect your financial well-being

Financial planning also means looking out for your future needs, as well as mapping things out for your loved ones. Creating a will can help ensure your assets are distributed according to your wishes. Other types of estate-planning documents can also provide your relatives with clarity on how you would like to be cared for, and who should manage your affairs.

Estate Planning Checklist

Estate Tax Planning: How Does Your Strategy Look?

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Types of financial planning help

A financial plan isn’t a static document — it's a tool to track your progress, and one you should adjust as your life evolves. It's helpful to reevaluate your financial plan after major life milestones, such as getting married, starting a new job, having a child or losing a loved one.

If you're not the DIY type — or if you want professional help managing some tasks and not others — you don't have to go it alone. Consider what kind of help you need:

Complete financial plan and investment advice

Online financial planning services offer virtual access to human advisors. A basic service would include automated investment management (like you’d get from a robo-advisor), plus the ability to consult with a team of financial advisors when you have other financial questions. More comprehensive providers basically mirror the level of service offered by traditional financial planners : You're matched with a dedicated human financial advisor who will manage your investments, create a comprehensive financial plan for you, and do regular check-ins to see if you're on track or need to adjust your financial plan.

» Want to work with a local advisor ? Learn how to find a financial advisor near you

Specialized guidance and/or want to meet with an advisor face-to-face

If you have a complicated financial situation or need a specialist in estate planning, tax planning or insurance, a traditional financial advisor in your area may fit the bill. To avoid conflicts of interest, consider fee-only financial advisors who are fiduciaries (meaning they've signed an oath to act in the client's best interest). Note that some traditional financial advisors decline clients who don’t have enough to invest; the definition of “enough” varies, but many advisors require $250,000 or more. If you want to know more about how much seeing an advisor will cost, read our guide to financial advisor fees .

» Need some help? Check out our roundup of the best wealth advisors

Portfolio management only

Robo-advisors offer simplified, low-cost online investment management. Computer algorithms build an investment portfolio based on goals you set, and your answers to questions about your risk tolerance. After that, the service monitors and regularly rebalances your investment mix to ensure you stay on track. Because it's all digital, it comes at a much lower cost than hiring a human portfolio manager.

» Need help investing? See our list of the best robo-advisors

Why is financial planning important?

Financial planning can help you feel more confident about navigating bumps in the road — like, say, a recession or historic inflation . According to Charles Schwab's 2023 Modern Wealth Survey, Americans who have a written financial plan feel more in control of their finances compared with those without a plan [0] Charles Schwab . Charles Schwab Modern Wealth Survey 2023 . Accessed Aug 7, 2023. View all sources .

Once your basic needs and short-term goals have been addressed, a financial plan can also help you tackle big-picture goals. Thoughtful investing, for example, can help build generational wealth , and careful estate planning can ensure that wealth gets passed down to your loved ones.

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8 Keys to Good Financial Plans


While there are many ways to go about developing a financial plan—do it yourself, use a robo-advisor, work with a financial planner, or a combination thereof—Schwab has identified eight critical components every plan should include, regardless of the method used to create it. So, what does a good financial plan look like?

1. Setting financial goals

You can't make a financial plan until you know what you want to accomplish with your money—so whether you're creating it yourself or working with a professional, your plan should start with a list of your goals, both big and small, and the time horizons to accomplish them. Doing so can help to organize each objective by how soon you'll need the money:

  • Short-term goals are those you hope to achieve in the next five years, such as paying off debt or building an emergency fund.
  • Medium-term goals are those you hope to achieve in the next five to 10 years, such as the down payment on a home or starting your own business.
  • Long-term goals are those that are 10 or more years away, including saving for college and, of course, retirement.

For each goal, specify a dollar figure and a target date. "The more specific your goals, the easier it is to measure your progress toward them," said Rob Williams, managing director of financial planning at the Schwab Center for Financial Research.

A host of online tools can help you run the numbers, weigh competing priorities, and determine the best course of action for you. Also, if you have multiple goals to work toward, a robo-advisor, or automated investing platform, can help you weigh the importance of each goal, ranking them by needs, wants, and wishes.

Any time is a good time to establish a financial plan.

Ideally, you start investing for financial goals early in life, but any time is a good time to check in on your current financial situation and assess how you're doing. Are you still on track? Do you have other goals you hadn't previously considered? Having a financial plan helps you assess where you are today and where you want to go next.

2. Net worth statement

Knowing your net worth today can serve as a baseline for framing your financial goals and setting a target for your net worth at some point in the future, like in retirement. To determine your net worth, make a list of all your assets (bank and investment accounts, real estate, valuable personal property) and another one of all your debt (credit cards, mortgages, or student loans). Your assets minus your liabilities equals your net worth.

"Don't be discouraged if your liabilities outweigh your assets," Rob said. "That's not uncommon when you're just starting out—especially if you have a mortgage and student loans."

3. Budget and cash flow planning

Your budget is really where the rubber meets the road, planning-wise. It can help you determine where your money is going each month and where you can cut back to meet your goals.

A budget calculator can help ensure you don't overlook irregular but important expenses, such as car repairs, out-of-pocket health care costs, and real estate taxes. As you're compiling your list, separate your expenses into two buckets: must-have items like groceries and rent, and nice-to-haves like eating out and gym memberships.

When considering how your goals fit into your budget, you may want to pressure-test it using "what if" scenarios: What if you want or need to retire earlier? What if you downsized your mortgage? Some robo-advisors offer tools that allow you to adjust certain assumptions to see how they could affect your savings strategy.

4. Debt management plan

Debt is sometimes treated like a four-letter word, but not all debt is bad debt. A mortgage, for example, can help build equity—and boost your credit score in the bargain. High-interest consumer debt like credit cards, on the other hand, can weigh heavily on your credit score. Plus, every dollar you pay in finance charges and interest is one you can't put toward other goals.

If you have high-interest debt, make sure you create a plan that can help you pay it off as quickly as possible. If you're not sure where to start, a financial advisor can help you prioritize, then determine how much of your budget should go toward your debt each month.

5. Retirement plan

An old guideline says you'll need approximately 80% of your present income in retirement. However, this assumes that retiring will free you from any work-related expenses, that you've paid off your mortgage, that any children will be financially independent, and you'll likely fall into a lower tax bracket.

It's also important to keep in mind that Medicare doesn't cover everything, and health care expenses that Medicare doesn't cover—such as long-term care—can add up quickly. You also might spend more on other things in retirement, like travel, dining out, gifts, or financial support to a relative or friend.

Plugging in different scenarios into a retirement savings calculator can help you figure out what you may need in retirement. 

Don't count on the 80% rule 

If you're saving 20% – 30% of your pre-retirement income, then the 80% income-replacement rule is a good place to start. Otherwise, it's safer to aim at covering 100% of your pre-retirement income, minus whatever you're saving for retirement . As with any general rule, there are plenty of exceptions. So be sure to sit down and fine-tune your retirement budget as the time draws near. This should be your top priority because you can borrow for most other goals but not for retirement.

6. Emergency funds

When something unexpected happens—say you lose your job or get hit with an unexpected medical bill—an emergency fund can help you avoid tapping your long-term savings to make ends meet.

It's generally a good idea to save enough to cover at least three months'—but ideally six months'—worth of essential living expenses (for example, groceries, housing, transportation, and utilities). Save this money in a checking or savings account so you can access it in a hurry should the need arise.

7. Insurance coverage

Insurance is an important part of protecting your financial downside—but try to ensure you're not overpaying for coverage you don't need and make sure to cover all your bases:

  • Health insurance : Without it, even routine care can cost a pretty penny, while a serious injury or hospital stay could set you back tens of thousands of dollars. As you get older, you may want to consider long-term care insurance , as well.
  • Disability insurance : This coverage protects you and your family in case you're unable to work. Employer-provided disability insurance typically replaces about 60% of your salary.
  • Auto and homeowners'/renters' insurance : If you own a car or home—or rent and can't afford to replace possessions out of pocket—make sure you're adequately protected.
  • Life insurance : This is generally a good idea for those with dependents. Work with an insurance agent to understand what type of—and how much—coverage makes the most sense for you.

8. Estate plan

At a minimum, most people want a will in place, which states your final wishes with regards to your assets, dependents, and who you want to administer your estate. You should also keep the beneficiaries of your insurance policies and retirement accounts up to date. Also consider establishing powers of attorney for financial and health care decisions, in case you become incapacitated.

For help getting started or tackling more complex estate-planning tasks, consider working with an estate attorney or a qualified financial planner.

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Build a financial plan in 3 easy steps

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Key takeaways

  • Want to feel calm and confident about your financial future? A financial plan may be able to help. The best part is that you can create your own plan without hiring a professional.
  • The first step is to decide what to prioritize based on what matters most to you. Then evaluate the resources you have to put toward your goal and consider how long it may take to reach.
  • Do some math (or use a financial calculator) to see if the amount you have now and the amount you can save over time will allow you to hit that deadline.
  • Are you on track? Then it's on to the next goal. If you aren't quite there, the next steps will be figuring out what it will take, whether it's moving the deadline, saving more—or a little bit of both.

Fidelity Viewpoints

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Financial planning can have a profound impact on your peace of mind and improve your confidence about reaching your goals. 1 But do you need to hire a financial advisor to get all the benefits a financial plan can provide? Not necessarily. If you’re up for the challenge, you can do it yourself—and you may even enjoy it.

What is a financial plan?

A financial plan is a blueprint for managing your money. It's often constructed on some key financial pillars: spending, saving for the future, managing debt, protecting what you already have, and estate planning. But your starting point and the priorities you set are unique to you.

Flexibility is the name of the game when planning because your priorities may change as your life evolves. For instance, you may be focused on paying down debt now and saving money to travel or buy a home. But what if things change unexpectedly? Having a plan in place can help you change course since you'll already know what you need to maintain your current lifestyle, where you stand in regard to your goals, and the safeguards you have in place in the form of insurance and savings.

How to create a financial plan

Technology has enabled some very cool planning tools for the do-it-yourselfer. There are budgeting apps, robo advisors , and slews of financial calculators that can help you reach your goals.

With the right tools and a process for evaluating your situation and identifying what to do next, you can build your own financial plan

To get started, consider the short- and long-term goals you'd like to focus on. For example, you may know you want to retire one day in 20 years or so. But before that you want to build your emergency savings, pay down debt, and send the kids to college. That's a lot to tackle at once, so it can make sense to break it all down into manageable chunks and take it one goal at a time.

Here’s a 3-step process for doing just that.

1. Pick a goal and identify your financial resources

Whether it's a short- or a long-term pursuit, your goal is the destination and your current income, debt Log In Required , and spending Log In Required and savings are the starting points. Identifying how much money you have coming in and going out will show you how much is left over—that’s the money you can save. Taking a close look at your spending can also help identify areas where you could spend less if you want to put more cash toward your goals.

Tip: With Fidelity's planning tools, you can add outside accounts to your planning dashboard so you can see everything in one place and get clear insights into your assets and liabilities.

You should know: Your insurance coverage and estate plan are critical pieces of protection and part of your financial resources. Though you can't spend them, insurance and planning documents like a will can help protect what you have in a worst-case scenario.

Get tactical: Define what you want to work toward. Research has found that having a specific goal in mind can help improve your odds of success versus a vague commitment to save more or spend less. 2 You can even create a goal and name it in Fidelity’s plan summary . You’ll also be able to add as many goals as you like, see where you stand, and track your progress.

But let's just start with one. Saving for retirement is a goal for many of us but who has time to figure it all out?

To start a retirement savings plan, go to the Fidelity website and navigate to the planning summary tab Log In Required (login required). (You can do this on the Fidelity app as well.) Add a retirement goal and answer a few quick questions to get started. The questions will help you progress through the planning steps. At the end, you'll see where you stand with your goal, plus suggestions on next steps to help reach your goal.

planning summary page graphic

2. Evaluate where you stand

Now that you have all of your financial details in one place, evaluate your entire financial picture with your goals.

This should help you see how achievable your goals are and gauge the progress you’re making toward them. Just seeing everything in one place can help you set your priorities and move on to the next phase of planning.

Back to our retirement example, once Fidelity’s planning tool has your goal and your resources in place, it can estimate what you could have, and what you likely need, in retirement. We'll start with your full Social Security retirement age but you can set a target retirement age. Then you'll get an estimate of how much money you may have in retirement and how much you may spend. If the numbers don't look right, you can adjust them.

Finally, you'll get an estimate of your potential monthly income in retirement and any surplus or shortfall you may have.

Retirement outlook graphic

Of course, most people have more than one savings goal. Some of them may be short term—taking a vacation or making some home improvements—while others are long term, like retirement or sending the kids to college. Fidelity’s tool allows you to set multiple goals, and align your resources to them to give you a fuller picture. For now, the retirement goal is the only goal that will show a shortfall or surplus chart.

3. Taking the next steps

A clear snapshot of your full financial picture can help you understand how much money you have versus what you may need. If you're on track toward one or more goals, celebrate and start conquering another one if you're ready. If you feel behind or unclear about what to focus on next, we can help you stay focused on what matters to you.

Not on track? It may be counterintuitive, but finding out that your savings are lacking can be a good thing. It gives you the chance to improve your situation and puts you in the driver's seat. You may have several options to catch up: You could save more money, save for a longer period of time, and evaluate investment options that could help.

See Fidelity’s suggestions for prioritizing debt, savings, and goals, read Viewpoints on How to balance debt, saving, and investing

And remember, if it was easy, no one would need a plan. But life and finances can be complicated. A flexible plan can simplify the way forward, show you what you need to do, and help you shift gears when your priorities change.

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How to Create a Financial Plan Like a Pro

Building a financial plan can help you achieve more of what you want in your life – learn how to do it like a pro.

Create a Financial Plan Like a Pro

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The first thing you need to do is decide where you’re headed. What’s your endgame and what do you hope to be able to achieve with your financial plan?

Are you ready to take the reins of your finances and your life? If so, you're going to need a plan. Here’s a guide to help you create a financial plan like a pro in just eight steps.

1. Define Your Financial Goals

“A financial plan is like building a house. Before putting up any walls or installing countertops, you need to think about what type of house you want,” Steven Gilbert, certified financial planner and founder of financial planning firm Gilbert Wealth, says.

Think in terms of the next year, the next few decades and the rest of your life.

  • Short term : Is there anything you’re hoping to achieve soon, like building an emergency fund, getting out of credit card debt or saving up for a down payment on a car? 
  • Midterm : What are your plans for the next 10 to 20 years? Perhaps you want to save for a down payment on a house or higher education for a child.
  • Long term : Think big picture here. Do you want to save for things like retirement, end of life expenses or a vacation home?

“People who have clear goals are more equipped to work through the steps of a comprehensive plan and put in place the strategies that best fit them and their goals,” Gilbert says.

2. Audit Your Financial Situation 

The next step is to figure out where your finances stand. You’ll need to take stock of your full financial picture, including:

  • Income : List all of your monthly income sources and amounts. 
  • Savings : Determine how much you have in savings, including traditional and high-yield savings accounts , certificates of deposit and money market accounts. 
  • Investments: Write down the types of investments you have, such as standard brokerage, retirement, education, whole life insurance or child investment accounts. Take note of their current balances and estimated growth trajectories.
  • Assets : List your assets and their fair market values. 
  • Expenses : Write down all of your monthly expenses, including rent, car payments, bills, subscriptions, entertainment and miscellaneous spending. 

Next, find the sum for each category; income, savings, investments, assets and expenses. Then, subtract your monthly expenses from your monthly income to find out how much you can save each month.

3. Maximize Your Disposable Income

Analyze your income and expenses to see if there are any opportunities to save. Consider if each expense is necessary and try to find a way to reduce it if it is.

For example, you could shop around to see if you have the best deal on your car and home insurance , cellphone plan and internet service . You may also be able to cut down on expenses like your entertainment and eating out.

Once you optimize your expenses, look at your income: Maybe there's a way you could bump it up. Perhaps you're due for a raise at work or there's a professional development path you could pursue to increase your earnings.

Or, it might be time to explore the job market and see if you’re receiving competitive compensation. Another option is to look into a side gig, like working as a delivery or rideshare driver, online tutor or freelance writer.

4. Develop a Financial Plan That Works for You

With an understanding of how much disposable income you have each month you can begin to reverse engineer your financial goals. For this step, strategize how you can best use your resources.

For example, let’s say you have $1,000 to save each month and your goals include building an emergency fund to cover three months of expenses, saving for a down payment on a house and putting 15% of your income toward retirement.

Amount you're able to save per month : $1,000 Emergency fund goal : $15,000 House down payment : $13,000 Retirement : $8,000 per year

Example Strategy No. 1

If your primary goal is to build your emergency fund as quickly as possible, start by putting $500 per month into your emergency savings and $500 toward retirement.

While your retirement savings would be a little shy of your goal and your house down payment would be on the back burner, you could build your emergency fund in fewer than three years (30 months). Then, you could shift to saving $500 for your house down payment and reach your goal in 26 months.

Example Strategy No. 2

If you want to make sure you hit the $8,000 per year retirement goal, you'd need to save $667 each month, which would leave you with $333 to put toward your other goals. If you decided to split the remainder evenly, you’d hit your emergency fund and house down payment goals in about eight years.

The key here is understanding that you have some leeway – you can decide what’s most important and what can wait.

Not sure what you should prioritize?

“The foundation of most financial plans is the same: Get on a budget, get out of debt, save and invest,” Jay Zigmont, Ph.D., CFP and founder of investment advisory firm Childfree Wealth, says.

When it comes to the saving step, Zigmont says, “Start by saving three to six months of your expenses in an emergency fund held in a high-yield savings account. After you are out of debt and have an emergency fund, work on investing.”

In the end, however, saving will come down to what's most important to you. If you want to prioritize a vacation for next year, bump it up on the list.

It's important to plan for the future but also to live it up a little as you go. Plus, enjoying some of the rewards of saving can help to keep you motivated.

5. Account for Future Scenarios

Next, think about the future and how it will impact your disposable income. For example, are you pursuing a career path that will increase your income over time?

On the other hand, are you planning to stop working in a few years when you have children?

Or, do you typically get a tax refund each year?

Think about how future scenarios like these will factor into your savings ability and goal timelines. Make adjustments to your financial plan as needed.

6. Commit to a Short-Term Savings Goal

Make a plan for the next 90 days. You don’t have to commit to an intimidating year- or decade-long goal – and probably shouldn't. Start with baby steps: Decide how much you’ll save for the upcoming three months and which goals you'll put that money toward.

7. Review Your Progress and Make Adjustments

At the end of the three-month period, review your savings plan. Did you save the amount you planned?

Ask yourself how you’d like to move forward. Do you want to save the same amount for each goal or do you want to make some adjustments?

Once you’ve decided, set your next 90-day goal and follow the plan. Then, rinse and repeat.

8. Adjust as Circumstances Change

At the end of each year, conduct a deeper review of your financial plan. See how much you were able to save throughout the year and check your overall progress. Also, assess your goals to ensure they're still feasible.

For example, if your monthly expenses have increased or decreased you may need to adjust your emergency savings target. Or, if the market’s changed and housing prices have risen or fallen you may need to update your house down payment goal.

Assess your progress and decide what's most important for the coming year. Then, start again with your next 90-day goal.

You Don’t Have to Plan Your Finances Alone

If you feel overwhelmed by the idea of building a financial plan, you don’t have to do it alone.

“Financial planning can be a complicated process depending on how complex your life and finances are, especially if you own a business, so you may want to discuss your plan and goals with a professional,” Andrew Rosen, CFP and president of Diversified LLC, says.

Financial advisors can give you all your options and offer personalized guidance on how to most efficiently reach your goals.

Free Professional Financial Advice

Julie Pinkerton Jan. 25, 2023

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How to Prepare a Financial Plan for Startup Business (w/ example)

Financial Statements Template

Free Financial Statements Template

Ajay Jagtap

  • December 7, 2023

13 Min Read

financial plan for startup business

If someone were to ask you about your business financials, could you give them a detailed answer?

Let’s say they ask—how do you allocate your operating expenses? What is your cash flow situation like? What is your exit strategy? And a series of similar other questions.

Instead of mumbling what to answer or shooting in the dark, as a founder, you must prepare yourself to answer this line of questioning—and creating a financial plan for your startup is the best way to do it.

A business plan’s financial plan section is no easy task—we get that.

But, you know what—this in-depth guide and financial plan example can make forecasting as simple as counting on your fingertips.

Ready to get started? Let’s begin by discussing startup financial planning.

What is Startup Financial Planning?

Startup financial planning, in simple terms, is a process of planning the financial aspects of a new business. It’s an integral part of a business plan and comprises its three major components: balance sheet, income statement, and cash-flow statement.

Apart from these statements, your financial section may also include revenue and sales forecasts, assets & liabilities, break-even analysis, and more. Your first financial plan may not be very detailed, but you can tweak and update it as your company grows.

Key Takeaways

  • Realistic assumptions, thorough research, and a clear understanding of the market are the key to reliable financial projections.
  • Cash flow projection, balance sheet, and income statement are three major components of a financial plan.
  • Preparing a financial plan is easier and faster when you use a financial planning tool.
  • Exploring “what-if” scenarios is an ideal method to understand the potential risks and opportunities involved in the business operations.

Why is Financial Planning Important to Your Startup?

Poor financial planning is one of the biggest reasons why most startups fail. In fact, a recent CNBC study reported that running out of cash was the reason behind 44% of startup failures in 2022.

A well-prepared financial plan provides a clear financial direction for your business, helps you set realistic financial objectives, create accurate forecasts, and shows your business is committed to its financial objectives.

It’s a key element of your business plan for winning potential investors. In fact, YC considered recent financial statements and projections to be critical elements of their Series A due diligence checklist .

Your financial plan demonstrates how your business manages expenses and generates revenue and helps them understand where your business stands today and in 5 years.

Makes sense why financial planning is important to your startup, doesn’t it? Let’s cut to the chase and discuss the key components of a startup’s financial plan.

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Key Components of a Startup Financial Plan

Whether creating a financial plan from scratch for a business venture or just modifying it for an existing one, here are the key components to consider including in your startup’s financial planning process.

Income Statement

An Income statement , also known as a profit-and-loss statement(P&L), shows your company’s income and expenditures. It also demonstrates how your business experienced any profit or loss over a given time.

Consider it as a snapshot of your business that shows the feasibility of your business idea. An income statement can be generated considering three scenarios: worst, expected, and best.

Your income or P&L statement must list the following:

  • Cost of goods or cost of sale
  • Gross margin
  • Operating expenses
  • Revenue streams
  • EBITDA (Earnings before interest, tax, depreciation , & amortization )

Established businesses can prepare annual income statements, whereas new businesses and startups should consider preparing monthly statements.

Cash flow Statement

A cash flow statement is one of the most critical financial statements for startups that summarize your business’s cash in-and-out flows over a given time.

This section provides details on the cash position of your business and its ability to meet monetary commitments on a timely basis.

Your cash flow projection consists of the following three components:

✅ Cash revenue projection: Here, you must enter each month’s estimated or expected sales figures.

✅ Cash disbursements: List expenditures that you expect to pay in cash for each month over one year.

✅ Cash flow reconciliation: Cash flow reconciliation is a process used to ensure the accuracy of cash flow projections. The adjusted amount is the cash flow balance carried over to the next month.

Furthermore, a company’s cash flow projections can be crucial while assessing liquidity, its ability to generate positive cash flows and pay off debts, and invest in growth initiatives.

Balance Sheet

Your balance sheet is a financial statement that reports your company’s assets, liabilities, and shareholder equity at a given time.

Consider it as a snapshot of what your business owns and owes, as well as the amount invested by the shareholders.

This statement consists of three parts: assets , liabilities, and the balance calculated by the difference between the first two. The final numbers on this sheet reflect the business owner’s equity or value.

Balance sheets follow the following accounting equation with assets on one side and liabilities plus Owner’s equity on the other:

Here is what’s the core purpose of having a balance-sheet:

  • Indicates the capital need of the business
  • It helps to identify the allocation of resources
  • It calculates the requirement of seed money you put up, and
  • How much finance is required?

Since it helps investors understand the condition of your business on a given date, it’s a financial statement you can’t miss out on.

Break-even Analysis

Break-even analysis is a startup or small business accounting practice used to determine when a company, product, or service will become profitable.

For instance, a break-even analysis could help you understand how many candles you need to sell to cover your warehousing and manufacturing costs and start making profits.

Remember, anything you sell beyond the break-even point will result in profit.

You must be aware of your fixed and variable costs to accurately determine your startup’s break-even point.

  • Fixed costs: fixed expenses that stay the same no matter what.
  • Variable costs: expenses that fluctuate over time depending on production or sales.

A break-even point helps you smartly price your goods or services, cover fixed costs, catch missing expenses, and set sales targets while helping investors gain confidence in your business. No brainer—why it’s a key component of your startup’s financial plan.

Having covered all the key elements of a financial plan, let’s discuss how you can create a financial plan for your startup.

How to Create a Financial Section of a Startup Business Plan?

1. determine your financial needs.

You can’t start financial planning without understanding your financial requirements, can you? Get your notepad or simply open a notion doc; it’s time for some critical thinking.

Start by assessing your current situation by—calculating your income, expenses , assets, and liabilities, what the startup costs are, how much you have against them, and how much financing you need.

Assessing your current financial situation and health will help determine how much capital you need for your startup and help plan fundraising activities and outreach.

Furthermore, determining financial needs helps prioritize operational activities and expenses, effectively allocate resources, and increase the viability and sustainability of a business in the long run.

Having learned to determine financial needs, let’s head straight to setting financial goals.

2. Define Your Financial Goals

Setting realistic financial goals is fundamental in preparing an effective financial plan. So, it would help to outline your long-term strategies and goals at the beginning of your financial planning process.

Let’s understand it this way—if you are a SaaS startup pursuing VC financing rounds, you may ask investors about what matters to them the most and prepare your financial plan accordingly.

However, a coffee shop owner seeking a business loan may need to create a plan that appeals to banks, not investors. At the same time, an internal financial plan designed to offer financial direction and resource allocation may not be the same as previous examples, seeing its different use case.

Feeling overwhelmed? Just define your financial goals—you’ll be fine.

You can start by identifying your business KPIs (key performance indicators); it would be an ideal starting point.

3. Choose the Right Financial Planning Tool

Let’s face it—preparing a financial plan using Excel is no joke. One would only use this method if they had all the time in the world.

Having the right financial planning software will simplify and speed up the process and guide you through creating accurate financial forecasts.

Many financial planning software and tools claim to be the ideal solution, but it’s you who will identify and choose a tool that is best for your financial planning needs.

how to build financial planning business

Create a Financial Plan with Upmetrics in no time

Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

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Start Forecasting

4. Make Assumptions Before Projecting Financials

Once you have a financial planning tool, you can move forward to the next step— making financial assumptions for your plan based on your company’s current performance and past financial records.

You’re just making predictions about your company’s financial future, so there’s no need to overthink or complicate the process.

You can gather your business’ historical financial data, market trends, and other relevant documents to help create a base for accurate financial projections.

After you have developed rough assumptions and a good understanding of your business finances, you can move forward to the next step—projecting financials.

5. Prepare Realistic Financial Projections

It’s a no-brainer—financial forecasting is the most critical yet challenging aspect of financial planning. However, it’s effortless if you’re using a financial planning software.

Upmetrics’ forecasting feature can help you project financials for up to 7 years. However, new startups usually consider planning for the next five years. Although it can be contradictory considering your financial goals and investor specifications.

Following are the two key aspects of your financial projections:

Revenue Projections

In simple terms, revenue projections help investors determine how much revenue your business plans to generate in years to come.

It generally involves conducting market research, determining pricing strategy , and cash flow analysis—which we’ve already discussed in the previous steps.

The following are the key components of an accurate revenue projection report:

  • Market analysis
  • Sales forecast
  • Pricing strategy
  • Growth assumptions
  • Seasonal variations

This is a critical section for pre-revenue startups, so ensure your projections accurately align with your startup’s financial model and revenue goals.

Expense Projections

Both revenue and expense projections are correlated to each other. As revenue forecasts projected revenue assumptions, expense projections will estimate expenses associated with operating your business.

Accurately estimating your expenses will help in effective cash flow analysis and proper resource allocation.

These are the most common costs to consider while projecting expenses:

  • Fixed costs
  • Variable costs
  • Employee costs or payroll expenses
  • Operational expenses
  • Marketing and advertising expenses
  • Emergency fund

Remember, realistic assumptions, thorough research, and a clear understanding of your market are the key to reliable financial projections.

6. Consider “What if” Scenarios

After you project your financials, it’s time to test your assumptions with what-if analysis, also known as sensitivity analysis.

Using what-if analysis with different scenarios while projecting your financials will increase transparency and help investors better understand your startup’s future with its best, expected, and worst-case scenarios.

Exploring “what-if” scenarios is the best way to better understand the potential risks and opportunities involved in business operations. This proactive exercise will help you make strategic decisions and necessary adjustments to your financial plan.

7. Build a Visual Report

If you’ve closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using “what-if” scenarios.

Now, we’ll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

Don’t worry—it’s no extra effort. You’ve already made a visual report while creating your financial plan and forecasting financials.

Check the dashboard to see the visual presentation of your projections and reports, and use the necessary financial data, diagrams, and graphs in the final draft of your financial plan.

Here’s what Upmetrics’ dashboard looks like:

Upmetrics financial projections visual report

8. Monitor and Adjust Your Financial Plan

Even though it’s not a primary step in creating a good financial plan, it’s quite essential to regularly monitor and adjust your financial plan to ensure the assumptions you made are still relevant, and you are heading in the right direction.

There are multiple ways to monitor your financial plan.

For instance, you can compare your assumptions with actual results to ensure accurate projections based on metrics like new customers acquired and acquisition costs, net profit, and gross margin.

Consider making necessary adjustments if your assumptions are not resonating with actual numbers.

Also, keep an eye on whether the changes you’ve identified are having the desired effect by monitoring their implementation.

And that was the last step in our financial planning guide. However, it’s not the end. Have a look at this financial plan example.

Startup Financial Plan Example

Having learned about financial planning, let’s quickly discuss a coffee shop startup financial plan example prepared using Upmetrics.

Important Assumptions

  • The sales forecast is conservative and assumes a 5% increase in Year 2 and a 10% in Year 3.
  • The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wanes in slower months.
  • The analysis assumes the owner will not withdraw any salary till the 3rd year; at any time it is assumed that the owner’s withdrawal is available at his discretion.
  • Sales are cash basis – nonaccrual accounting
  • Moderate ramp- up in staff over the 5 years forecast
  • Barista salary in the forecast is $36,000 in 2023.
  • In general, most cafes have an 85% gross profit margin
  • In general, most cafes have a 3% net profit margin

Projected Balance Sheet

Projected Balance Sheet

Projected Cash-Flow Statement

Cash-Flow Statement

Projected Profit & Loss Statement

Profit & Loss Statement

Break Even Analysis

Break Even Analysis

Start Preparing Your Financial Plan

We covered everything about financial planning in this guide, didn’t we? Although it doesn’t fulfill our objective to the fullest—we want you to finish your financial plan.

Sounds like a tough job? We have an easy way out for you—Upmetrics’ financial forecasting feature. Simply enter your financial assumptions, and let it do the rest.

So what are you waiting for? Try Upmetrics and create your financial plan in a snap.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.


Frequently Asked Questions

How often should i update my financial projections.

Well, there is no particular rule about it. However, reviewing and updating your financial plan once a year is considered an ideal practice as it ensures that the financial aspirations you started and the projections you made are still relevant.

How do I estimate startup costs accurately?

You can estimate your startup costs by identifying and factoring various one-time, recurring, and hidden expenses. However, using a financial forecasting tool like Upmetrics will ensure accurate costs while speeding up the process.

What financial ratios should startups pay attention to?

Here’s a list of financial ratios every startup owner should keep an eye on:

  • Net profit margin
  • Current ratio
  • Quick ratio
  • Working capital
  • Return on equity
  • Debt-to-equity ratio
  • Return on assets
  • Debt-to-asset ratio

What are the 3 different scenarios in scenario analysis?

As discussed earlier, Scenario analysis is the process of ascertaining and analyzing possible events that can occur in the future. Startups or businesses often consider analyzing these three scenarios:

  • base-case (expected) scenario
  • Worst-case scenario
  • best case scenario.

About the Author

how to build financial planning business

Ajay is a SaaS writer and personal finance blogger who has been active in the space for over three years, writing about startups, business planning, budgeting, credit cards, and other topics related to personal finance. If not writing, he’s probably having a power nap. Read more

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Pension-like income is key to building retirement confidence

About the author.

As President of Nationwide’s Retirement Solutions business, Eric brings more than 15 years of industry experience to his position, currently managing the team responsible for growing Nationwide’s retirement plans operation to more than $175 billion in assets under management.

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This year is a turning point in our country. In 2024, more Americans will reach age 65 than ever before in U.S. history. While this is a significant event from a demographic perspective, it also raises an important question: are workers who are nearing retirement really ready for their financial future?

To answer this question, the Nationwide Retirement Institute® surveyed 1,000 Americans between the age of 60-65, split between those who are still working and those already retired. In reviewing the survey results, we found that many people who have yet to retire may be overestimating how comfortable they’ll be in retirement .

For example, the average age that current workers expect to retire is 67. Yet current retirees retired on average at 60, with nearly 2/3 indicating that was earlier than they planned. Moreover, 77% of older workers in our survey said they expect to be at least moderately comfortable in retirement. However, fewer current retirees in this age group (68%) said they were financially comfortable.

In my view, the disconnect between retirement expectations and the realities of current retirees reflects the many uncertainties and unknowns American workers have about their retirement preparations. For many Americans, the primary vehicle for retirement planning is in the workplace with their retirement plan. Leading an organization that focuses on this exact population, we have a duty and honor to help more workers take steps to feel more confident in their financial futures.

For decades, we have educated Americans to save for retirement. That is still an absolute need, and we have an opportunity to help these workers protect that hard earned savings.

Consistent retirement income breeds confidence

There’s a correlation between consistent income and retirement confidence: those that can count on a pension are more confident about their financial futures.

Current workers who have pensions are more likely to say they’re on track to retire when planned, compared to those who don’t have pensions at work (78% versus 59%). Moreover, those workers with pensions also expect to be more financially comfortable when they eventually enter retirement (82% versus 74% of those without pensions).

Pension-like income is key to building retirement confidence infographic.

View the infographic

When these workers do retire, that pension income results in a greater sense of financial comfort (74% versus 63% of retirees without pensions) and fewer concerns about outliving their money (64% versus 74%). Having a pension also appears to be tied to greater happiness and financial security in retirement, and contributes to higher levels of physical, mental, and emotional health.

Plan participants want pension-like income

We know, however, that workplace pensions aren’t as common as they once were, and for those workers who have a pension, newer employees often have more restrictive tiers of income benefits. That means for many American workers, they can’t count on the benefits of consistent income in retirement that pensions provide. But we’re hoping to change that one defined contribution plan at a time with protected retirement income solutions that can be offered with a plan’s investment lineup.

These protected retirement solutions, often referred to as ‘in-plan guarantees’ are an investment option inside a defined contribution retirement plan. A participant who elects to put some portion of their retirement savings into this solution have the ability to turn their retirement savings into income. This benefits the participant in two ways: it’s guaranteed to last throughout retirement and it’s protected against market downturns. In other words, these solutions provide the benefits of pension-like income.

In a survey we conducted in 2023 , we found that workers highly value the confidence these solutions would bring to their retirement. Among older workers participating in a 401(k) plan at work, 73% wished their plan offered a pension-like income option. Additionally, 87% of participants said they would be interested in rolling over their retirement savings to a protected income option if one was available in their employer-sponsored retirement plan.

Plan participants want retirement income options to help them better prepare for retirement.

Building retirement confidence is good business

It’s not just employees who like these in-plan solutions. Employers also stand to benefit by helping their workers better prepare for and live in retirement.

For example, workers who feel financially prepared for their futures are less likely to delay retirement. When more workers can retire on time, employers may see the impact of lower compensation and benefit costs among highly paid workers. A reduction in delayed retirements may also ease constraints on hiring and promoting talent in a company’s workforce.

Employers may also enjoy an upward bounce in productivity from employees. In last year’s Nationwide Retirement Institute® survey of plan participants, 73% said financial worries had a severe impact on their productivity at work. By offering an in-plan guarantee, plan sponsors can address these concerns, helping workers feel more confident about their financial futures and stay focused on their day job.

Other ways to boost confidence among plan participants

There’s more in our latest survey that retirement plan sponsors may find helpful in growing plan participation and promoting retirement confidence.

In our survey, we asked workers and retirees in their early 60s what advice they’d give to their younger selves about preparing for retirement. The most common pieces of advice were around saving and planning for retirement earlier in life. (Respectively, 63% and 41% of survey respondents gave these answers.)

As financial professionals, we’re well aware of the powerful benefits that compounding investment growth offers for those who take advantage of the time they have before retirement by starting to save early. This lesson from older retirement savers is one that younger workers should learn on their first day on the job.

There are other life lessons from older workers that plan sponsors can share with participants at all stages of retirement planning. For example, maximizing plan contributions and enrolling in auto-escalation features are great ways to accelerate your retirement plan.

It’s also important that employees hear perspectives that challenge their expectations for retirement. For example, younger workers shouldn’t expect to work as long as they want, they may not be able to count on Social Security as much as they think, and their living expenses may be higher than planned.

Learn more about protected retirement income

As an industry, we’ve done a great job providing tools and solutions to help participants accumulate assets. At Nationwide, we believe that offering protected retirement income solutions in-plan are the next generation of retirement planning, giving more focus on a plan for not just saving-for but living-in retirement. This represents a tremendous opportunity for the financial services industry to re-define success as achieving a secure retirement where savers aren’t worried about outliving their income.

This is why we offer solutions built to address the very concerns that are eroding participants’ retirement confidence. Whether you’re a plan sponsor or a financial professional, you have a vital role to play in helping participants understand the benefits that in-plan guarantees can offer.

Learn more about how you can help restore retirement confidence with help from Nationwide.

Financial professionals: Click here .

Plan sponsors: Click here .

Disclosure Statement:

Methodology: Edelman Data and Intelligence (DXI) conducted a nationally representative online survey of 1,000 U.S. residents aged 60-65 on behalf of Nationwide from November 2 – 29, 2023. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.


Guarantees are subject to the claims-paying ability of the issuing insurance company.

Provisions of these options may vary based on plan selection and/or by state regulation. These investment options may not be available in all states.


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I'm a financial planner — I have 4 tips for my business owner clients looking to open a business bank account

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  • Legally protecting yourself in case of an audit is the No. 1 reason to use a business bank account.
  • Different banks will offer different levels of convenience, and they'll come with different fees.
  • Fraud detection and other security features are especially important for protecting your business.

Insider Today

When starting a business, it can be overwhelming thinking about all the things you need to do and consider. However, it is essential that you do not overlook the value of opening a business bank account — usually both a business checking account and a high-yield business savings account .

As a CPA and financial planner, one of the first things I tell all my business owner clients to do is to keep their personal and business transactions separate. While there are a multitude of reasons you should have a separate bank account for your business, legal protection is certainly the most important.

If you experience an audit, it is important to have an easy way to track your business expenses and income. When business finances are commingled with personal finances, it becomes nearly impossible to provide a clear financial trail.

When choosing a business bank account, there are several important factors to consider. Here are four things I tell my business owner clients to consider when choosing a business bank account.

1. Access to banking services and customer service

When it comes to running a business, a variety of banking services can help you effectively manage your business finances. Beyond just opening a business bank account, you want to ensure that the financial institution you choose can provide access to services such as a checking account, savings account, business loans , wire transfers, fraud prevention services, a notary, checkbooks, business credit cards , online and mobile banking, and bill payment services.

If you want more one-on-one attention from a banker, consider opening an account with your local bank or credit union. You may also prefer a physical branch if you plan to make daily deposits or withdrawals of cash or checks.

This may be more challenging to do with an online bank. Many online banks may offer deposits and withdrawals, but their ATM network may not be as large as a well-known brick-and-mortar bank. For this reason, some small business owners open an account at their local bank where they have their personal accounts and know the level of customer service they will receive.

Consider opening your business checking and savings accounts at different financial institutions so that you can have access to both better banking services at a physical branch and higher interest rates at an online bank.

2. Terms and fees (including minimum balance)

The fees associated with business bank accounts can vary widely depending on the financial institution. Some of the most common fees to be aware of include monthly maintenance fees, overdraft fees , wire transfer fees, minimum balance fees, and ATM fees.

You may find that online banks charge fewer fees than brick-and-mortar banks, but you must consider this in conjunction with the other features.

Seek an account with reasonable fees that can accommodate your business.

3. Ease of paying contractors

Some business bank accounts, especially online accounts, offer free invoicing and bookkeeping software/features.

If you use accounting software (such as QuickBooks) to manage your business finances, accessing a business bank account that offers integration features may be desirable. Trust me, this will make your or your accountant's life much easier.

In addition, some accounts allow integrations with payroll and tax preparation software. This will help to make the process of paying contractors with 1099s more seamless.

4. The bank's security offerings

One of the most important things you should consider when choosing a business bank account is security. There are certain features that you want to look for to make sure your account is protected.

First, you want to make sure that the bank you choose is FDIC-insured (or NCUA-insured if a credit union). In addition, you want to make sure that the institution has additional layers of security such as multi-factor authentication and fraud detection services, which include account monitoring and alerts for suspicious activity.

Ensure that whatever bank you choose offers the best security features to protect your business from fraud.

When choosing a bank account, consider all the various banking features offered by different financial institutions to find the one that best suits your business's financial needs. Also, remember that your decision is not permanent. It is easy to switch banks if necessary.

Watch: The 3 most important things you need to know about starting a business

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How to make sure you pay a fair price for the financial advice you need

Morey stettner, an adviser’s fee structure is revealing in itself.

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When shopping for a financial planner, it’s natural to ask, “How much do you charge?” If you expect a simple, one-sentence answer, think again.

There are many ways that advisers get paid and it can get complicated. Their fee structure reflects the type of practice they want to run and the business model that reinforces their brand.

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  10. Grow Your Financial Advisory Firm Fast with These Tips

    The Bottom Line. The fastest way to grow your advisory business is to create a scenario where people know you, like you and trust you. Do this by helping others achieve their goals and by ...

  11. 16 Tips For Creating A Personal Or Business Financial Plan For The

    1. Build A Budget Based On Essentials The first thing I recommend is to calculate your base income per month and immediately deduct 25% to establish a net income. Then, build a budget based on...

  12. 4 Steps to Creating a Financial Plan for Your Small Business

    Key Takeaways A financial plan details a business's current standing and helps business leaders make informed decisions about future endeavors and strategies. A financial plan includes three major financial statements: the income statement, balance sheet and cash flow statement.

  13. Financial Planning: A Step-by-Step Guide

    1. Set financial goals A good financial plan is guided by your financial goals. If you approach your financial planning from the standpoint of what your money can do for you — whether...

  14. Financial Planning Basics: How to Create a Financial Plan

    Create a strong financial plan by setting goals, tracking cash flow, budgeting, investing, and paying down debt. A CFA or CFP can assist you in creating a personalized financial plan. NEW LOOK...

  15. 8 Keys to Good Financial Plans

    1. Setting financial goals. You can't make a financial plan until you know what you want to accomplish with your money—so whether you're creating it yourself or working with a professional, your plan should start with a list of your goals, both big and small, and the time horizons to accomplish them.

  16. Startup Financial Planning: 14 Tips for Founders

    Make you think more strategically about growth. Help you prepare for all the ups and downs of running a startup. Make it easier to fundraise. Give you more confidence about the day-to-day decisions you make. Trust us, the value you'll get from financial planning is well worth the time you put into it.

  17. What Is Financial Planning?

    A financial plan is devised of smaller goals or tasks that will help support you along your financial journey. Create a financial plan with these five steps: 1. Identify Your Financial Goals. By ...

  18. How to build a financial plan

    Here's a 3-step process for doing just that. 1. Pick a goal and identify your financial resources. Whether it's a short- or a long-term pursuit, your goal is the destination and your current income, debt, and spending and savings are the starting points. Identifying how much money you have coming in and going out will show you how much is ...

  19. 6 Expert Steps to Build Your Financial Plan

    Create a financial strategy Bring your financial future into focus with personalized advice.; Manage everyday finances Successfully managing day-to-day finances plays an essential role in your financial strategy.; Save & build for retirement Build a retirement that's as unique as you are—with guidance and tools that put you in control.

  20. How to make a financial plan in 11 steps

    Start Saving Evaluate where you stand Set SMART financial goals Update your budget Save for an emergency Pay down your debt Organize your investments Prepare for retirement Start your estate planning Insure your assets Plan for taxes Review your plans regularly

  21. How to Create a Financial Plan Like a Pro

    Next, find the sum for each category; income, savings, investments, assets and expenses. Then, subtract your monthly expenses from your monthly income to find out how much you can save each month ...

  22. How to Prepare a Financial Plan for Startup Business (w/ example)

    7. Build a Visual Report. If you've closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using "what-if" scenarios. Now, we'll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

  23. 10 Steps to Create a Solid Financial Plan

    Below, you'll find ten steps for how to make a financial plan. These steps will cover all the basics you need to know. 1. Write down your financial goals. Having financial goals is the foundation for your financial success. After all, you have to know what you want to accomplish in order to actually accomplish it.

  24. Pension-like income is key to building retirement confidence

    Building retirement confidence is good business. ... Whether you're a plan sponsor or a financial professional, you have a vital role to play in helping participants understand the benefits that in-plan guarantees can offer. ... Explore insights from experienced Black investors on building financial security and key lessons in smart saving ...

  25. Tips From a Financial Planner for Opening a Business Bank Account

    Our experts choose the best products and services to help make smart decisions with your money ().In some cases, we receive a commission from our partners; however, our opinions are our own.Terms ...

  26. How To Build Wealth

    Stay diversified. Up your earnings. 1. Start by Making a Plan. Building wealth starts with making a financial plan. That means taking the time to identify your goals and game out how you can ...

  27. How to make sure you pay a fair price for the financial advice you need

    An adviser's fee structure is revealing in itself. Those who prefer financial planning to portfolio management tend to charge flat or per-project fees that reflect the relative complexity of the ...