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10 serious mistakes in financial planning

Whether a company can generate profits can be seen in the financial plan. This is the heart of the business plan and shows the founders the right direction by recording the most important points such as capital requirements or profit levels. Therefore, a financial plan is not only an important document for start-ups, but also for banks and investors – especially when it comes to applying for loans. This is also required to apply for an entry fee (ALG 2) and start-up grant (ALG 1).

However, the importance of financial planning is often underestimated Consequence: In many financial plans serious mistakes creep in, which in the worst case can mean the end of the business start-up. We show what mistakes are made and how they can be avoided.

1. Lack of financial plan

Arguably the worst mistake is not having a financial plan. Many entrepreneurs create a business plan, but often forget about financial planning or only approach it half-heartedly. To ensure that this contains all the essential points and that nothing is forgotten, a professional, e.g. B. a business start-up consultant. Business start-up advice does not have to be expensive either, as there are subsidies that can reimburse up to 70% of the costs. (Service Tip: Find a consultant)

2. Too optimistic sales planning

In particular, founders who are starting their own business for the first time are far too euphoric when it comes to financial planning. Accordingly, they run the risk of underestimating their capital requirements. In practice, this results in a liquidity bottleneck. Founders should therefore Plan for buffers. Experience has shown that it takes up to nine months for the originally forecast sales figures to be reached.

3. Underestimation of marketing costs

Another mistake of many founders is that they assume that the customers will literally “run into the booth”. Although founders should be convinced of the success of their business idea, the creation of a marketing strategy and the planning of marketing costs must not be forgotten. Because in practice it is usually the case that after the start of the company foundation fewer customers can be won than originally planned. If the costs for customer acquisition were underestimated, the consequence is: Expensive marketing investments, in order to still win the missing clientele. Business founders should therefore acquire a certain know-how in the field of marketing and sales.

4. Exceeding the financial budget due to unplanned investments

True to the motto “The unexpected often happens”, we are not only confronted with unforeseeable events in private life, for which we often have to dig deep into our pockets, e.g. B. the repair or even the purchase of a new washing machine. Even the business is not immune to unexpected events and the company quickly finds itself in difficulties. Investments often have to be made that were not foreseeable in advance. It is therefore important as an entrepreneur to unite nest egg to put aside for just such events in order not to be hit by nasty surprises.

5. Waiver of public financial assistance

Many small and medium-sized enterprises (SMEs) are critical of raising external capital because this can change the shareholder structure. Although this is understandable, it should not mean that a business start-up cannot be implemented due to a lack of capital. After all, start-ups can seldom be raised using only one’s own funds. Fortunately, the state offers one Large selection of funding and financing options. These range from raising equity to bank loans to various support programs. (Service tip: funding check)

6. Future scenarios are not played out

Entrepreneurs who are too sure of themselves often forget to consider the other side of the coin and the “worst case”. worst case to play through the start-up: what would happen if e.g. B. the customers are missing or the venture capital providers are absent? Risks can be recognized and then prevented by these approaches.

7. Missing adjustments to planning in the event of changes

Another point concerns the flexibility. Founders are dependent on various factors that can only be partially influenced or not at all. The current situation in particular shows us that we cannot control everything. It is therefore important for founders to throw their original plans overboard and be able to adapt their business to the circumstances as quickly as possible.

8. Incorrect calculation of employee costs

If the company is to employ employees, the costs for the employment are also included in the financial planning (gross wages and bonuses). However, it is often forgotten that employers also bear part of the social security contributions. These ancillary wage costs (external link) are then missing from the crucial financial plan. At the end of the month, the surprise for founders is correspondingly large. If you consider that between 23% and 33% have to be paid in addition to the gross salary, this can happen very quickly if there are several employees high amounts getting together.

9. Not enough equity saved

Starting a business requires capital to grow. Especially at the beginning, start-ups have high costs, e.g. B. to carry office equipment or machines. Although there is the possibility of becoming self-employed with little equity, this usually only affects a few areas such as e.g. B. online trading. Basically, equity is required for a business start-up. Because without this, founders are quickly left dry. Loans from banks often burden the budget. alternatives can therefore be the raising of equity-like mezzanine capital or the application for state subsidies.

10. Neglect of tax

This is one of the unwelcome topics of business founders. Most founders are aware that they will have to pay taxes at some point, but due to the complexity of the calculations, they are often missing from the financial plan. The consequence can be expensive additional tax payments, which in the worst case From the start-up can mean. To be on the safe side, this topic should be put in the hands of a tax advisor. This can enlighten founders and protect them from serious missteps.

Are you a prospective entrepreneur or entrepreneur and would like to get a professional financial plan seek advice? Feel free to contact us.