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6 Best Apps for Internal Employee Communication - The Ultimate 2023 Guide
Undoubtedly, a plethora of tools are available, offering various combinations of the above and more.
With that in mind, let's delve into a review of the leading apps designed to maintain a constant focus on team communication.
In this blog article, we will explore the top six apps for employee communication in The Ultimate Guide for 2023. Let's begin by examining the current state of workplace communication in 2023.
The State Of Workplace Communication In 2023
The landscape of work is rapidly evolving, with remote work now encompassing a significant 58% of the workforce, translating to a staggering 92 million workers.
This profound shift has elevated digital communication apps to a pivotal role in workplace interactions and overall productivity.
A recent analysis conducted by Forbes Advisor has shed light on some compelling statistics. Notably, two states, Colorado and Maryland, emerge as the frontrunners in embracing remote work, boasting the highest number of remote workers.
This trend reflects the increasing adoption of flexible work arrangements across various regions.
It was also found that a significant 28% of respondents in the survey have reported using voice-over-internet-protocol (VoIP) phone systems.
This technology, which enables voice communication over the internet, has gained substantial traction in the modern workplace, underscoring the importance of seamless digital communication.
Delving deeper into the work environment, the survey reveals that 50% of the participants operate in a hybrid work setting, combining in-person and remote work. Meanwhile, 27% of the workforce exclusively work remotely, and 20% remain anchored to on-site work.
These statistics illustrate the diverse nature of work arrangements in today's workforce, highlighting the need for adaptable and efficient communication solutions.
What are employee communication apps?
Fundamentally, employee apps serve as internal communication tools, and the best among them offer a myriad of capabilities.
However, a valuable employee app should, above all, furnish companies with a mobile solution to reach their entire workforce through their personal smartphones or tablets.
In this manner, employee communication apps establish an effective and secure means of connecting geographically dispersed employees, many of whom may lack a corporate email address or regular access to a desktop computer.
Employee communication apps are also known as:
- Internal communication tools
- Enterprise communication platforms
- Employee engagement platform
- Intranet software
- Chat messaging
This category includes non-desk and remote workers, as well as freelancers, non-contract employees, temporary staff, and the like.
Some important stats:
- 63% of employees are currently using apps for work-related tasks.
- 74% dedicate over two hours each week to access company information on their mobile devices.
- A significant 68% of employees keep their phones within sight while at work, as reported by CNBC.
- However, 57% of workers express the belief that their organization has been sluggish in delivering apps tailored for the workforce.
Their design typically centers on practicality and relevance, effectively promoting alignment and fostering engagement.
What to look for in an employee communication app?
To get started, define your app's intended purpose. Then, conduct research to compare each app's offerings with your requirements. Recognize that each app has its strengths and weaknesses, so it's crucial to stay aligned with your goals.
Consider the nature of the messages you'll be conveying. If you're disseminating critical company updates that demand staff attention, assess which app is best suited for this purpose.
Evaluate the features provided by each app. Which apps allow message targeting to various employee groups? Which enable customization to align with your corporate branding? Which include chat functionality or support two-way communication?
Lastly, ascertain your available budget. Cost is a pivotal factor in your decision, and some apps may be more expensive than others. By maintaining focus on your overarching objectives, you'll only invest in the functionality that truly serves your needs.
Her are a few other things to consider:
- Instant Messaging: Engaging in team chat facilitates relationship-building and expedites the resolution of common issues.
- Workflow Management: Real-time interaction with schedules and tasks enhances team productivity by reducing uncertainty.
- Content Sharing: Ensure that the platform allows easy editing and publishing of training materials and business announcements through news feeds and email newsletters.
- Third-Party Integrations: Look for platforms that offer integration with third-party features like payroll or cloud storage, making it more convenient for teams to leverage communication tools.
- Trial or Free Plan: Prior to making a purchase, it's crucial to test the compatibility and usability of a communication app, which some businesses offer through demos or free plans.
- Workflow Management: Real-time interaction with schedules and tasks enhances team productivity by reducing uncertainty.
- Content Sharing: Ensure that the platform allows easy editing and publishing of training materials and business announcements through news feeds and email newsletters.
- Third-Party Integrations: Look for platforms that offer integration with third-party features like payroll or cloud storage, making it more convenient for teams to leverage communication tools.
- Trial or Free Plan: Prior to making a purchase, it's crucial to test the compatibility and usability of a communication app, which some businesses offer through demos or free plans.
Presenting the Top 6 Apps for Employee Communication
In the past, employees primarily relied on email and phone calls for internal communication within organizations. However, today, we have advanced to a highly sophisticated communication system that not only conveys messages but also focuses on optimizing overall team efficiency.
- An intuitive dashboard with customizable widgets
- A news feed for company announcements and updates
- Discussion forums and chat rooms for team interaction
- File sharing and storage capabilities
- Seamless integration with popular business tools like Google Workspace and Microsoft 365
Advantages of AgilityPortal:
- Enhanced Communication: AgilityPortal simplifies communication and collaboration among employees, bridging geographical and departmental gaps.
- Increased Productivity: AgilityPortal empowers employees to be more productive by providing a centralized hub for accessing essential information and tools required for their tasks.
- Streamlined Collaboration: AgilityPortal facilitates seamless team collaboration and file sharing for project success.
- Elevated Employee Engagement: AgilityPortal fosters employee engagement by offering a space for socialization and connection.
Pricing for AgilityPortal:
- AgilityPortal offers a range of pricing plans tailored to meet the needs of businesses of varying sizes. The pricing structure is based on the number of users and the specific features required. You can review the pricing options here.
Ideal Organizations for AgilityPortal:
- AgilityPortal is well-suited for organizations of all sizes aiming to enhance communication, collaboration, and productivity. It is particularly favored by small and medium-sized businesses, startups, and technology companies.
Examples of organizations that can benefit from AgilityPortal:
- Remote Teams that need a virtual proviate space to communicate
- Teams Managing Multiple Projects
- Teams Collaborating with External Partners
- Teams Requiring Efficient File Sharing and Information Distribution
- Teams Aiming to Improve Communication and Collaboration Proficiency
In summary, AgilityPortal stands as a potent and adaptable business intranet platform capable of helping organizations of diverse sizes become more productive and collaborative.
2.Slack
Advantages of Slack:
- Enhanced Communication: Slack simplifies real-time team communication and ensures that all conversations and files are consolidated in a single location, facilitating shared understanding.
- Increased Productivity: Slack boosts team productivity by minimizing the reliance on email and meetings. It provides tools for task automation and workflow optimization.
- Improved Collaboration: Slack streamlines project collaboration, bridging geographical and time zone gaps. It offers tools for sharing files, ideas, and feedback.
- Enhanced Team Morale: Slack contributes to team morale by fostering socialization and collaboration. It incorporates fun features like emojis and GIFs.
Pricing for Slack:
- Slack provides a free plan for teams with up to 10,000 members. This free plan includes unlimited messaging and file sharing, along with access to a limited number of integrations. For teams of all sizes, Slack offers paid plans with added features such as unlimited integrations, workflow automation, and enhanced security measures.
- Free for limited features and stored messages
- Pro: $6.67/month per user
- Business: $12.50/month per user
Organizations Best Suited for Slack:
- Slack is well-suited for organizations of all sizes aiming to enhance communication, collaboration, and productivity. While it is commonly embraced by startups and tech companies, it is also utilized by diverse organizations, including government agencies, nonprofits, and educational institutions.
Examples of organizations that can benefit from Slack:
- Remote Teams
- Teams Handling Multiple Projects
- Teams Collaborating with External Partners
- Teams Requiring Swift and Easy File Sharing
- Teams Aiming to Elevate Communication and Collaboration Skills
In summary, Slack is a versatile and robust tool that empowers teams of all sizes to work more productively and collaboratively.
Microsoft Teams stands as a unified communication and collaboration platform, seamlessly merging workplace chat, video meetings, file sharing (including persistent chat), and application integration into a single central hub. It is an integral part of the Microsoft 365 suite of products.
Advantages of Microsoft Teams:
- Enhanced Communication: Microsoft Teams simplifies real-time team communication and collaboration by centralizing all conversations and files, ensuring everyone is aligned.
- Elevated Productivity: Microsoft Teams enhances team productivity by reducing the reliance on email and meetings. It provides an array of tools or automating tasks and workflows.
- Streamlined Collaboration: Microsoft Teams facilitates easy project collaboration, regardless of geographical location or time zone. It also offers tools for sharing files, ideas, and feedback.
- Improved Team Morale: Microsoft Teams fosters team morale by offering a space for socialization and collaboration. It includes features like emojis and GIFs for added fun.
Pricing for Microsoft Teams:
- Microsoft Teams is included in all Microsoft 365 plans. Additionally, a free plan is available for teams with up to 300 users, providing unlimited messaging and file sharing, as well as access to a limited set of features.
- Free: Meetings of up to 60 minutes and 100 members
- Essential: $4/month per user for meetings up to 24 hours and 300 members
- Business Basic: $6/month per user for unlimited meetings and 1TB storage
Ideal Organizations for Microsoft Teams:
- Microsoft Teams is well-suited for organizations of all sizes seeking to enhance communication, collaboration, and productivity. While it is commonly embraced by startups and tech companies, it is also utilized by a diverse range of organizations, including government agencies, nonprofits, and educational institutions.
Examples of organizations that can benefit from Microsoft Teams:
- Remote Teams
- Teams Managing Multiple Projects
- Teams Collaborating with External Partners
- Teams Needing Efficient File Sharing and Information Distribution
- Teams Aiming to Enhance Communication and Collaboration Proficiency
In summary, Microsoft Teams is a potent and adaptable tool capable of assisting teams of varying sizes in becoming more productive and collaborative.
4.Zoom
Zoom is a cloud-based video conferencing service that facilitates connections among users for meetings, webinars, and various events. It ranks among the world's most popular video conferencing platforms, boasting over 500 million monthly meeting participants.
Advantages of Zoom:
- User-Friendly: Zoom is exceptionally user-friendly, catering to individuals of varying technical aptitudes. Users can effortlessly join meetings with a single click, without the need for software downloads or installations.
- Reliability: Zoom excels in reliability, offering high-quality video and audio, even under low-bandwidth conditions.
- Affordability: Zoom presents a range of pricing plans, including a free option suitable for small businesses and individuals.
- Feature-Rich: Zoom is replete with a wide spectrum of features, encompassing screen sharing, breakout rooms, and polling.
Pricing for Zoom:
- Zoom provides diverse pricing plans, commencing with a free plan that allows hosting meetings with up to 100 participants for a duration of 40 minutes. Paid plans initiate at $12.49 per user per month, furnishing additional benefits such as extended meeting durations, expanded cloud storage, and custom branding.
Organizations Best Suited for Zoom:
- Zoom is a versatile video conferencing platform applicable to organizations of all sizes. It is particularly advantageous for businesses and entities necessitating remote meetings and webinars. Additionally, Zoom is a valuable tool for educational purposes, including online classes and lectures.
Examples of organizations that can gain from employing Zoom:
- Businesses: Zoom is applicable to businesses of all sizes for hosting remote meetings, webinars, and events, as well as for training and development purposes.
- Educational Institutions: Educational institutions can leverage Zoom for delivering online classes and lectures, as well as promoting student collaboration and group projects.
- Non-Profit Organizations: Non-profit organizations can utilize Zoom for hosting fundraising events, volunteer meetings, and other gatherings.
- Government Agencies: Government agencies can employ Zoom to host public meetings, training sessions, and various events.
In conclusion, Zoom serves as a potent and versatile video conferencing platform, suitable for organizations spanning diverse industries and sizes. Its user-friendliness, reliability, and affordability make it a compelling choice for seamless virtual communication.
5.Zoho
Zoho Connect serves as a unified communication and collaboration platform designed to enhance communication, collaboration, and productivity for businesses across the spectrum. Its feature-rich offerings include:
- Communication: Zoho Connect encompasses a suite of communication tools, including forums, chats, video conferencing, and announcements. This enables users to engage in real-time or asynchronous communication as per their requirements.
- Collaboration: Zoho Connect further provides a variety of collaboration tools, such as file sharing, task management, and wikis, fostering seamless project collaboration, regardless of geographical constraints.
- Productivity: Zoho Connect significantly bolsters business productivity by creating a central hub for employees to communicate, collaborate, and access information. This, in turn, curtails wasted time and enhances overall efficiency.
- Zoho Connect operates as a cloud-based platform, making deployment and utilization straightforward. Moreover, it boasts an affordability factor, with plans starting at a mere $1 per user per month.
Organizations Best Suited for Zoho:
- Zoho Connect is well-suited for businesses of all sizes, with a particular focus on small and medium-sized businesses (SMBs). SMBs often contend with limited resources and thus require cost-effective, user-friendly solutions. Zoho Connect aligns perfectly with the needs of SMBs by offering a comprehensive array of features at a competitive price point.
Key Benefits of Zoho Connect:
- Enhanced Communication and Collaboration:Zoho Connect consolidates communication and collaboration, promoting synergy throughout the organization.
- Increased Productivity:Zoho Connect equips employees with tools to work efficiently, from file sharing to task management, streamlining communication across various applications.
- Cost Efficiency:As a cloud-based platform, Zoho Connect eliminates the need for upfront investments in hardware or software, ultimately reducing costs for businesses of all sizes.
- User-Friendly:Zoho Connect is thoughtfully designed for user-friendliness, catering to a broad user base, including those with limited technical expertise.
In summary, Zoho Connect stands as a comprehensive and cost-effective unified communication and collaboration platform, serving as a valuable asset to businesses across the size spectrum, with a focus on fostering improved communication, collaboration, and productivity.
6.Basecamp
- Project Management: Basecamp aids teams in creating and monitoring projects, tasks, deadlines, and file management.
- Communication: Basecamp provides a variety of communication tools, encompassing group chats, private messaging, and message boards.
- Collaboration: Basecamp streamlines teamwork by facilitating collaboration on documents, files, and diverse projects.
Advantages of Basecamp:
Basecamp offers multiple advantages to its users, such as:
- Enhanced Team Communication: Basecamp's communication tools simplify the process of team members staying connected and collaborating on projects.
- Increased Productivity: Basecamp's project management features contribute to team organization and alignment, ultimately boosting productivity.
- Reduced Stress: Basecamp serves to alleviate stress by serving as a centralized hub for project management and communication.
Pricing for Basecamp:
Basecamp offers two pricing plans:
- Basecamp Personal: This free plan includes unlimited projects and users but offers limited features, including 500GB of storage and no priority support.
- Basecamp Business: Priced at $99 per month, this plan encompasses all the features of Basecamp Personal, along with unlimited storage, priority support, and client access.
Ideal Organizations for Basecamp:
Basecamp suits organizations of various sizes, but it particularly resonates with small businesses and remote teams. It is also an excellent choice for organizations seeking a straightforward, user-friendly project management tool.
Examples of organizations that can benefit from Basecamp:
- Small Businesses: Basecamp aids small businesses in efficiently managing their projects and communication.
- Remote Teams: Basecamp's communication and collaboration tools facilitate the seamless connection and effective teamwork of remote teams.
- Creative Teams: Creative teams, such as design agencies and marketing teams, find Basecamp valuable for idea sharing, project collaboration, and workflow management.
- Nonprofit Organizations: Basecamp proves to be a valuable tool for nonprofit organizations, assisting them in managing projects, volunteers, and donations.
In summary, Basecamp emerges as an adaptable project management and communication software, suitable for organizations of varying sizes and types. Its particular strengths lie in benefiting small businesses, remote teams, and creative teams.
Keep Internal Team Communications Centralized With AgilityPortal Super Add for Remote Teams
To maximize the benefits of these tools, it's crucial that they operate in synergy, rather than in isolation. Research indicates that teams with integrated toolsets experience a 25% improvement in project completion times and a 15% increase in cross-team collaboration.
This is precisely why a knowledge base tool like AgilityPortal should be your foremost priority. Studies have shown that organizations implementing a knowledge base tool experience a 40% reduction in time spent searching for information, leading to a 12% boost in overall team efficiency.
With AgilityPortal, your team can commence building a robust repository of organizational knowledge and information, fostering seamless communication. This approach has been proven to increase task alignment by 35% among team members, ensuring a collective focus on both immediate objectives and long-term company aspirations.
Are you ready to take the next step?
Begin your journey with a complimentary 14-day trial of AgilityPortal, and witness the transformative impact on your team's performance and collaboration.
Internal Communication FAQs
What is effective internal communication?
An example of internal communication is the use of email to share important company updates or announcements with employees.
It can also include team meetings, internal newsletters, company intranet, instant messaging platforms, or even face-to-face conversations between colleagues.
Internal communication serves various purposes, from disseminating critical information to facilitating day-to-day interactions among staff members.
What is an example of internal communication?
An example of internal communication within an organization is the use of a weekly team meeting where department heads provide updates on ongoing projects and discuss upcoming milestones. In this meeting, employees can ask questions, share insights, and align their efforts with the company's goals and priorities. This face-to-face interaction fosters collaboration and ensures that everyone is well-informed about the company's progress and objectives.
AgilityPortal is a web-based software platform designed to enhance internal communication and collaboration within organizations. It can be used to facilitate internal communication and help keep remote or deskless staff engaged by using the built-in tools.
How can internal communication be improved?
- Prioritize Communication: Internal communication should be a fundamental component of any business strategy. Leaders must set the example and underscore the significance of communication
- Clarity and Simplicity: When communicating with employees, ensure your message is unambiguous and free from jargon. Utilize plain language that everyone can readily comprehend.
- Consistency: Establish a reliable communication framework so that employees know where to access information and anticipate regular updates from leadership. Adhere to a consistent communication schedule.
- Two-Way Interaction: Communication should not flow in only one direction. Promote a culture of openness by encouraging employees to ask questions, share ideas, and offer feedback. Adopting an internal communication tool like AgilityPortal can help improve Communications in organisation
- Diverse Communication Channels: Recognize that people have distinct communication preferences. Employ a range of channels to reach all employees, such as email, intranet, social media, and video conferencing.
What are the challenges of internal communication?
Internal communication involves the exchange of information and ideas within an organization, serving as a crucial foundation for trust, collaboration, and performance enhancement. Nevertheless, several challenges can impede effective internal communication, including:
- Lack of Transparency: Organizations that withhold critical information like financial performance and strategic plans from employees can foster mistrust and give rise to speculation.
- Ambiguity: Communication should be clear and unambiguous, but achieving this clarity can be challenging. Ambiguous messages may lead to employee confusion and frustration.
- Inconsistent Communication Channels: Employees need a reliable source for information and a predictable schedule for leadership communication. However, some organizations lack consistent channels, making it hard for employees to stay informed and engaged.
- Unclear Feedback Mechanisms: Employees should feel at ease asking questions and addressing concerns with their leaders, yet many organizations lack clear channels for this purpose. This can result in employees feeling unheard and disconnected.
- Lack of Employee Recognition: Acknowledging and appreciating employees' hard work and contributions is vital. Organizations that fail to recognize their employees' accomplishments risk leaving them feeling undervalued and unappreciated.
Moreover, organizations with a large workforce, multiple locations, and remote employees face additional complexities in internal communication. Tailoring your communication strategy to address these specific challenges is essential for effective internal communication within your organization.
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Setting up a new business is no walk in the park, and when it comes to financial support small business owners often struggle to find the help they truly need.
A good question is whether you are confident your small business can survive its first five years—or even the first year. According to the U.S. Bureau of Labor Statistics, 1 in 5 small businesses fail within the first year, often due to poor financial planning and lack of strategic support.
Starting a business in 2025 means navigating a rapidly evolving economy, rising costs, and tighter competition. While passion and innovation are essential, your financial plan will ultimately determine your success.
Even the most exciting ideas can fall apart without a clear strategy for managing cash flow, expenses, and funding.
This article will guide you through building a brilliant financial plan tailored for small business success in 2025.
Whether launching a new venture or refining your current operations, you'll learn how to align your budget with your goals, forecast more accurately, and gain the financial stability needed to grow.
With the right plan, you'll gain investor confidence, make smarter decisions, and future-proof your business for the challenges ahead.
What is a Financial Plan for a Business?
What is a financial plan for a business? It's a strategic tool that helps determine whether a business idea is financially viable and provides a roadmap to maintain long-term financial health.
A financial plan is a crucial part of any business plan, offering clarity and direction as the business evolves. It typically includes three core financial statements: the income statement, the balance sheet, and the cash flow statement.
Each of these sections comes with a brief explanation or analysis to help interpret the numbers.
Together, they provide insight into profitability, liquidity, and overall financial stability—key metrics every business needs to track.
Who Needs a Financial Plan?
Financial planning isn't just for the wealthy—it's a valuable tool for anyone looking to take control of their financial future.
Regardless of your income or life stage, having a structured financial plan helps you set clear objectives, stay focused, and feel confident about your path.
A personalized financial plan offers more than just guidance—it acts as a roadmap to help you navigate major life events and unexpected changes.
Whether saving for a home, preparing for retirement, or adjusting to new financial responsibilities, a solid plan ensures you're making informed decisions.
You'll find financial planning especially beneficial if you're:
- Buying your first home or upgrading your current one
- Experiencing a significant change in income or expenses
- Starting or growing a family
- Thinking ahead to retirement and long-term savings
- Organizing your assets through estate or legacy planning
A proactive approach to your finances helps you reach your goals and builds resilience, allowing you to adapt to life's curveballs with greater ease and security.
Understanding the Role of a Financial Plan in Business Success
If you're starting a new business and wondering what a financial plan is, it's more than just budgeting—it's a strategic roadmap that outlines how your business will manage income, control costs, and reach long-term financial goals.
A financial plan brings clarity and control to your operations by linking daily decisions to your company's vision.
The importance of financial planning for small businesses cannot be overstated. According to the U.S. Bureau of Labor Statistics, around 20% of small businesses fail within the first year, often due to poor financial management.
A solid financial plan can help avoid this fate by providing insight into cash flow, funding needs, and operational priorities.
So, what is a financial plan example?
It could include projected income statements, balance sheets, cash flow forecasts, expense breakdowns, and growth targets. These documents serve internal strategy and inspire confidence among lenders, investors, and stakeholders.
A good financial plan helps businesses:
- Manage cash flow more efficiently to avoid shortfalls
- Set realistic goals and map out scalable growth strategies
- Present a strong, credible financial position to stakeholders
Ultimately, a financial plan enables small businesses to stay agile, make informed decisions, and achieve lasting success—even in uncertain economic environments.
Why Is a Financial Plan Important to Your Small Business?
A solid financial plan not only boosts your confidence in managing your business but also gives you clearer insights into how to allocate resources effectively.
It reflects a commitment to responsible spending and demonstrates your company's ability to meet its financial responsibilities.
With a financial plan, you can assess how specific decisions may impact revenue and identify when it's appropriate to use reserve funds.
Also, a financial plan is a powerful asset when presenting your business to potential investors. It highlights how your organization manages expenses, generates income, and plans for growth.
Most importantly, it provides a clear picture of your current financial position and outlines what's needed—through sales or investment—to achieve key financial goals.
Financial Plan for Beginners?
1. Develop a Sales Forecast
A critical component of any business financial plan is the sales forecast—an estimate of the revenue your business expects to generate over the next three years.
Start by building a spreadsheet that outlines each quarter of your fiscal year. Include key columns for product or service names, unit prices, units expected to be sold, and projected revenue.
If your business is already up and running, review past sales reports to identify seasonal trends or growth patterns you can use to inform future projections.
For startups without existing sales data, begin by calculating your cost of production per item or service. From there, estimate how much you plan to sell based on market research, competitor benchmarks, or industry demand.
Not confident in your manual forecasting skills? There are plenty of tools and software solutions available that can help you automate and refine your sales projections with greater accuracy.
A sales forecast estimates your future revenue and is crucial for building a solid financial plan.
Here's how to create one:
- Set up a spreadsheet to track products, prices, and projected sales.
- Use past sales data to identify trends (if your business is already operating).
- Estimate unit sales and pricing based on market research for new businesses.
- Forecast monthly revenue for the first year, then annually for Years 2 and 3.
- Use tools like QuickBooks or LivePlan to improve accuracy.
- Compare your forecast to industry benchmarks to ensure it's realistic.
This helps demonstrate your business's potential profitability to investors and lenders.
A well-prepared sales forecast isn't just for internal planning—it also builds confidence with potential investors or lenders.
It demonstrates that your business has a clear growth trajectory and can generate consistent revenue, making it more attractive for financial backing.
2. Outline Your Business Expenses
After completing your sales forecast, the next step is to create a detailed breakdown of your business expenses.
This section shows investors that your business can realistically afford to produce its products or services and maintain profitability. Ideally, your total expenses should remain below your projected revenue.
Start by identifying all your business costs and categorizing them into fixed and variable expenses:
- Fixed costs remain consistent throughout the year—examples include rent, insurance, and salaries.
- Variable costs fluctuate depending on operations and sales volume, such as marketing, shipping, or raw materials.
While some costs like production or rent may be straightforward, others—like taxes or maintenance—may require estimation.
Your expense forecast helps assess financial feasibility and ensures you're planning for both predictable and unexpected costs.
3. Build a Cash Flow Statement
A cash flow statement outlines the movement of money into and out of your business over a specific period.
It's a key component of your financial plan, as it shows whether your company generates enough income to cover its operating expenses and obligations.
The goal is to maintain positive cash flow, which means more money is coming into the business than going out. This signals healthy financial management and ensures you can pay bills, invest in growth, and handle unexpected costs.
To create a cash flow statement:
- Use historical profit and loss records to calculate incoming revenue and outgoing expenses.
- If you're a startup, make realistic projections using your estimated sales and known expenses.
- Always account for potential payment delays from clients or vendors. Adding a buffer for late invoices helps you avoid cash shortfalls.
Being conservative and realistic in your estimates helps you prepare for real-world financial conditions.
A clear cash flow projection gives investors confidence in your business's financial stability and helps you stay in control of your financial health.
4. Create an Income Projection Forecast
An income projection, a profit and loss forecast, provides a forward-looking snapshot of your business's expected revenue, costs, and net profit over a specific period. It's a crucial part of your financial plan, especially when presenting to investors or lenders who want to understand your business's long-term viability and profitability.
This document includes your projected sales, the direct costs of producing those goods or services, and your estimated operating expenses. The result is a forecast of your expected net income—essentially showing whether your business will be profitable.
If your business is already up and running, focus your forecast on the upcoming year.
For new ventures, consider projecting income over two to three years to demonstrate sustainability and growth potential.
To build an accurate forecast:
- Use sales forecasts and expense estimates as the foundation.
- Base your projections on industry trends and historical data, if available.
- Factor in seasonal variations, economic conditions, and potential business developments.
- Consider using financial forecasting software or consulting a financial advisor for added accuracy.
A well-prepared income forecast builds credibility and can significantly improve your chances of securing funding or investor interest.
Download the free financial projections template excel for a great starting poin.t
5. Build a Forecasted Balance Sheet
A forecasted balance sheet offers a snapshot of your company's projected financial position by outlining what it owns (assets) and what it owes (liabilities).
This document is essential for investors, lenders, and stakeholders to evaluate your business's financial stability and net worth over time.
Assets represent everything your business owns that has value, such as cash, inventory, accounts receivable, equipment, real estate, and intellectual property. Liabilities include financial obligations like loans, taxes, unpaid wages, or outstanding vendor payments.
To create your forecasted balance sheet:
- Start by listing all expected assets, including cash balances, office equipment, inventory, property, and receivables.
- Next, outline projected liabilities, such as credit lines, loan repayments, outstanding invoices, or payroll obligations.
- Subtract total liabilities from total assets to calculate your projected equity or net worth.
A positive balance sheet—where assets outweigh liabilities—demonstrates financial health and signals to investors that your business is solvent and capable of meeting its obligations.
Conversely, if liabilities exceed assets, it may raise red flags about your ability to manage debt.
Having a clear and realistic balance sheet projection not only builds credibility but also helps you plan for future capital needs and operational investments effectively.
Here is a simple balance sheet template excel, feel free to use this financial projections template excel.
6. Identify Your Break-Even Point
Understanding your break-even point is crucial for evaluating the financial viability of your business. It represents the level of sales needed to cover all your expenses—where your total revenue equals total costs. Only after crossing this threshold will your business begin generating profit.
Determining your break-even point gives you a clear financial target and helps you make informed pricing, budgeting, and investment decisions. It also reassures potential investors that your business can become self-sustaining within a reasonable timeframe.
To calculate your break-even point, subtract your variable costs from the unit selling price, then divide your total fixed costs by that result. The formula looks like this:
Break-Even Point = Fixed Costs / (Unit Price – Variable Cost per Unit)
For example, if your fixed costs are $100,000, and each unit you sell brings in $50 in profit after covering variable costs, you'd need to sell 2,000 units to break even.
Most successful businesses break even within two to three years. If your projections show it may take significantly longer—say five years or more—it could signal the need to reassess your business plan or reduce operating costs.
Also consider including an exit strategy in your financial plan. This helps mitigate risks and outlines a path to minimize losses should your business not perform as expected.
7. Plan for Contingencies + (contingency plan template word)
Every business faces unexpected challenges—from sudden market downturns and supply chain disruptions to equipment failure or economic shifts.
That's why it's essential to build contingency planning into your financial strategy.
A contingency plan includes setting aside a financial buffer (often referred to as an emergency fund) to cover unforeseen expenses without derailing your operations. Many financial experts recommend having three to six months of operating costs set aside as a safeguard.
Beyond savings, consider preparing alternative revenue streams or flexible cost-reduction strategies you can implement quickly if revenue drops. This might include renegotiating vendor contracts, scaling back non-essential spending, or leveraging credit lines responsibly.
A solid contingency plan increases investor confidence and gives your team peace of mind—knowing you're prepared for the unexpected.
It's not just about weathering storms, but staying agile and resilient enough to pivot when necessary, keeping your business on track for long-term success. Download out free contingency plan template word.
5 Steps of Financial Planning
1. Define Your Financial Goals
Start by asking yourself: Where do I want to be in 5, 10, or even 20 years? Whether owning a home, retiring early, travelling the world, or funding your child's education, having a clear vision helps shape your financial plan.
Break down your aspirations using the S.M.A.R.T. method:
- Specific: Clearly state what you want (e.g., "Save for a down payment on a house").
- Measurable: Assign a number or milestone (e.g., "Save $30,000 in 3 years").
- Attainable: Make sure the goal is realistic based on your income and expenses.
- Relevant: Focus on what matters most to you and your long-term lifestyle.
- Time-Based: Set a target date for each goal to stay accountable.
Use a digital notebook or spreadsheet to list and categorize your goals into short-term (1–2 years), mid-term (3–5 years), and long-term (5+ years). This will help you prioritize where to start saving and how much to allocate monthly toward each goal.
A great way to boost your financial literacy is through online MBA finance programs. These programs offer practical, flexible education tailored to real-world business needs. Whether you're planning for growth or just managing your first year of revenue, sharpening your financial skills gives you a competitive edge and a better shot at long-term stability.
2. Assess Your Risk Tolerance
Understanding your risk tolerance is essential when creating a financial plan that suits your lifestyle and goals.
Risk tolerance is your comfort level with investment ups and downs—how much loss you're willing to accept in pursuit of higher returns.
Your tolerance depends on factors such as:
- Your age – Younger individuals can typically handle more risk since they have time to recover from market fluctuations.
- Your financial goals – Short-term goals often require safer investments, while long-term goals may benefit from more growth-focused strategies.
- Your income and savings – The more financial stability you have, the more flexibility you may feel when taking risks.
- Current economic conditions—Inflation, interest rates, and political stability can all affect how much risk you're comfortable with.
Use an online risk tolerance quiz or calculator to get a quantified score. This helps align your investments with your comfort level and expected returns.
Consider this score when choosing between conservative options like bonds, balanced mutual funds, or higher-risk investments like stocks or crypto.
Understanding your risk tolerance ensures your financial strategy is realistic, sustainable, and aligned with your peace of mind—even when markets fluctuate.
3. Analyze Your Cash Flow
A solid financial plan starts with knowing exactly where your money is going.
Cash flow analysis tracks the money coming into your accounts (income) and what's going out (expenses). This step helps you identify spending patterns and areas for improvement.
Start by reviewing your last 3–6 months of bank statements.
Categorize your spending into:
- Essential expenses - Rent or mortgage, utilities, groceries, insurance, transportation.
- Discretionary expenses - Dining out, subscriptions, shopping, entertainment.
Once categorized, subtract your total expenses from your income to see your net cash flow.
Use budgeting apps like YNAB, Mint, or Excel templates to automate your tracking. Set a monthly review reminder to stay accountable.
After this analysis, you may find non-essential costs that can be reduced or eliminated. Even small changes—like cutting unused subscriptions or reducing takeaway meals—can free up cash for savings, investments, or emergency funds.
Understanding your cash flow gives you control over your finances, prevents overspending, and ensures your financial plan is based on accurate, real-world data.
4. Protect Your Assets
Protecting what you own is a critical part of any strong financial plan.
Start by calculating your net worth—the total value of your assets (home, car, savings, investments) minus your liabilities (loans, credit card debt). This gives you a clear picture of what needs protection.
Once you understand your financial standing, evaluate your insurance coverage:
- Homeowners or renters insurance for property and personal belongings.
- Auto insurance with sufficient liability coverage.
- A Personal Liability Umbrella Policy (PLUP) for extra protection in case of major claims or lawsuits.
- Life insurance—either term (for affordable temporary coverage) or permanent (whole, universal, or variable universal life), depending on your long-term needs and family situation.
- Long-term care insurance to protect your retirement savings from healthcare-related expenses later in life.
Review your insurance policies annually or when your life circumstances change (e.g., marriage, new home, children).
Speak with an independent insurance advisor to ensure you're neither underinsured nor overpaying.
With the proper protection in place, you're shielding your financial future from unexpected events—and giving yourself peace of mind.
5. Evaluate Your Investment Strategy
Your investment strategy should align with your financial goals, timeline, and risk tolerance.
Begin by identifying your approach:
- Active Investing involves hands-on management, frequent trading, and efforts to outperform the market. This strategy demands time, expertise, and often higher fees.
- Passive Investing focuses on long-term growth by tracking market indexes (like the S&P 500), often through ETFs or index funds. It typically involves lower costs and less frequent trading.
- Define your investment goals - Are you saving for retirement, a home, or college tuition?
- Consider your time horizon - The longer your timeline, the more risk you may be able to take.
- Evaluate your current portfolio - Is it diversified? Are your investments aligned with your goals?
- Rebalance your portfolio regularly to maintain your desired asset allocation.
If you're unsure which path suits you best, consult with a financial advisor or consider a hybrid approach, where part of your portfolio is passively managed and another part actively managed.
Choosing the right strategy is not just about returns—it's about aligning your investments with your life goals and peace of mind.
Key Challenges Small Businesses Face When it Comes to Financial Planning
- Unpredictable Cash Flow - Many small businesses experience irregular income streams, especially in the early stages. This makes it difficult to forecast revenue and plan for future expenses. Late payments from clients or seasonal fluctuations can leave businesses scrambling to cover costs.
- Limited Resources and Budget - Small businesses often lack dedicated financial experts or advanced tools. With limited time, staff, and money, financial planning is either put on hold or handled by someone without formal training in accounting or finance.
- Lack of Financial Literacy - Many small business owners are passionate about their product or service but may not fully understand financial statements, forecasting, or budgeting. This can lead to poor decision-making and prevent the business from growing sustainably.
- Difficulty Accessing Capital - Securing loans or investment requires detailed financial plans and projections. Small businesses that struggle to create professional financial documents may find it hard to gain the trust of investors or lenders.
- Overestimating Revenue, Underestimating Expenses - A common trap is being overly optimistic. Overestimating how much revenue will come in and underestimating how much things cost can result in shortfalls and missed targets.
- Economic and Market Volatility - Changes in interest rates, inflation, or supply chain disruptions can derail financial forecasts. Small businesses are more vulnerable to external shocks, making contingency planning even more important.
- Scaling Without a Plan - Rapid growth without financial controls can be just as dangerous as stagnation. Businesses that grow quickly may overextend themselves, take on too much debt, or fail to manage increased operational costs.
Best Tools and Resources for Small Business Financial Planning
Here's a list of some of the best tools and resources for small business financial planning, including top-rated financial planning apps that help manage budgets, cash flow, forecasting, and more:
#1. QuickBooks
Best for: Accounting & financial reporting
A go-to tool for small businesses, QuickBooks helps with expense tracking, payroll, invoicing, and generating financial statements. It also offers forecasting tools and integrates with many other apps.
Why it's great: Easy to use, scalable, and trusted by millions of businesses.
#2. Xero
Best for: Online accounting & collaboration
Xero is a cloud-based accounting software ideal for small businesses that want real-time collaboration with bookkeepers and accountants.
Why it's great: User-friendly interface, strong financial reporting features, and great for managing cash flow.
#3. Wave
Best for: Free accounting and invoicing
Wave offers free invoicing, accounting, and receipt scanning tools. It's perfect for solopreneurs and freelancers just starting out with financial planning.
Why it's great: No monthly fee, intuitive layout, and ideal for basic financial needs.
#4. LivePlan
Best for: Creating business plans & financial forecasting
LivePlan helps businesses build professional business plans and financial projections. It's a great tool if you're pitching to investors or lenders.
Why it's great: Pre-built templates, industry benchmarks, and easy forecasting features.
#5. PlanGuru
Best for: Advanced forecasting & budgeting
PlanGuru is designed for in-depth financial analytics and 3–10 year forecasts. It's more advanced than most small business tools and ideal for growing companies.
Why it's great: Budgeting, forecasting, and reporting all in one platform with powerful analytics.
Wrapping up
Financial planning isn't just for big corporations—it's the secret weapon that helps small businesses thrive.
When you take the time to understand your costs, stay informed, monitor your cash, and invest in solid systems, you set your business up for long-term success. The earlier you start building that financial foundation, the stronger your business becomes.
You don't need to be a financial wizard to make smart choices.
You just need the right mindset, some good habits, and a commitment to staying proactive. With these ten steps in place, you'll be ready to lead your business with clarity, confidence, and control.
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Jill Romford
I am a digital nomad, lover of exploring new places and making friends.
I love to travel and I love the internet. I take pictures of my travels and share them on the internet using Instagram.
Traveler, entrepreneur, and community builder. I share my insights on digital marketing and social media while inspiring you to live your fullest life.
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