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Remote Team Management Software: Best App for Team Management For 2025
Remote teams have become the norm rather than the exception in today's ever-evolving workplace landscape. By 2025, effectively managing remote teams will be crucial for organizational success.
This article delves into the challenges of managing remote teams, Remote Team Management Software, highlights essential tools and best practices, showcases leading software providers, and offers key leadership strategies.
It also features top tools, including those offered by AgilityPortal, designed to streamline remote team management and monitoring, this is our list of Best App for Team Management For 2025 keep reading to learn more.
What is Remote Team Management Software?
Let's start by defining Remote Team Management Software.
This software encompasses a comprehensive suite of tools designed to enhance remote teams' communication, collaboration, and productivity.
These tools replicate the ease and efficiency of working in a physical office by offering features like video conferencing, instant messaging, file sharing, and task tracking. Many also include advanced functionalities such as time tracking, scheduling, and project management to support seamless workflows.
As far as why businesses are using remote team management software, well, this is because those tools have skyrocketed as companies adapt to the growing prevalence of globally distributed teams or work-for-home policies. A recent study revealed that 74% of companies plan to maintain or increase remote work options, making these tools indispensable for managing employees across distances and time zones.
Also, businesses using remote work software report a 20–25% boost in productivity, highlighting its impact on teamwork and efficiency. With mobile-friendly accessibility, these tools empower employees to stay connected and productive from anywhere, driving organizational success in today's increasingly remote world. Learn more on What Great Remote Managers Do Differently?
Here's a quick overview of each remote working software, highlighting their ideal use cases and standout features.
Also, screenshots are included to provide a glimpse of their user interfaces. We'll delve deeper into their functionalities later in the article, take a look at some of the best team management software.
| Feature | AgilityPortal | Hubstaff | Wrike |
| Core Focus | Communication, teamwork, and performance monitoring | Remote employee monitoring | Project management and collaboration |
| Project Management | Create, assign, and track projects with deadlines and objectives | Plan, schedule, and monitor project development | Task management using Gantt charts with deadlines and schedules |
| Employee Engagement | Built-in surveys and feedback systems to evaluate staff engagement and satisfaction | Not included | Not included |
| Performance Analytics | Comprehensive data to identify trends and areas needing improvement, it can also be used as a remote team monitoring tool. | Productivity trends through time tracking | Automatic tracking of hours worked and activity levels |
| Time Tracking | Tracking of hours worked and activity levels | Automatic tracking of hours worked and activity levels | Not included |
| GPS Tracking | Not included | GPS tracking for field staff responsibility | Not included |
| Real-Time Collaboration | Real-time document sharing and collaboration to reduce communication obstacles | Real-time document sharing and collaboration to reduce communication obstacles | |
| Ideal Use Case | Enhancing team productivity and simplifying remote management processes | Gaining insights into time allocation across projects and tasks | Effectively managing tasks and teamwork with robust scheduling and collaboration tools |
| Unique Features | Surveys, feedback systems, and performance analytics, options for staff to checking to locations using google maps, real time chat. Perfect for managing remote teams effectively. | GPS tracking and detailed time tracking | Gantt charts for scheduling and comprehensive task management |
Here Are Some Remote Team Management Tips
To effectively manage remote teams and drive productivity, it's essential for the manager to play a pivotal role in implementing a few key strategies.
Start by setting clear expectations for every team member, outlining roles, responsibilities, and project goals to ensure alignment and reduce ambiguity.
This guidance will make the team feel supported and clear about their tasks. Creating accountability is equally essential—establishing measurable benchmarks and deadlines while fostering a culture of ownership to encourage individual and team commitment. Providing the right tools is critical for success; invest in robust team management platforms that enable seamless communication, collaboration, and task management.
Also, overcommunicate to bridge the gaps inherent in remote work, using frequent check-ins, updates, and feedback to maintain transparency and connection. Finally, adopt tools that enhance these efforts, ensuring they are user-friendly and tailored to your team's needs, enabling them to stay engaged, efficient, and aligned with organizational objectives, we hope you found those remote team management tips useful.
Key Drivers for Remote Work Shift
The shift toward remote work continues to gain momentum, driven by technological advancements, changing workforce expectations, and globalization.
By 2025, it is projected that 70% of the workforce will work remotely at least five days a month, underscoring the growing importance of flexible work arrangements.
Companies are embracing remote work to access a wider talent pool, reduce overhead costs, and promote work-life balance, which has become a top priority for employees. It also worh mentioning, advancements in cloud computing, high-speed internet, and collaboration tools have made remote work more seamless and efficient, encouraging organizations to adopt hybrid or fully remote work models. As businesses navigate this shift, they increasingly rely on technology to bridge communication gaps, ensure accountability, and maintain productivity.
The adoption of team management tools is expected to accelerate as businesses adapt to the challenges of managing geographically dispersed teams. By 2025, the market for collaboration software is estimated to reach $23 billion, driven by the demand for tools that enhance connectivity, streamline project management, and foster employee engagement.
Features like AI-powered task prioritization, real-time analytics, and immersive virtual meeting environments will redefine how teams collaborate and innovate. Furthermore, companies will focus on integrating tools that promote asynchronous communication, ensuring that global teams can work effectively across different time zones.
As organizations prioritize remote work, team management software will become a cornerstone of business operations, enabling companies to thrive in the evolving workplace landscape and managing remote teams effectively.
Why it's hard to Manage a Remote Team
Finally, remote employees are at a higher risk of burnout. Without clear boundaries between work and personal time, they may feel compelled to stay "on" all day, logging in early and responding to emails late into the evening. It's crucial for managers to establish remote work guidelines and promote work-life balance, showing care and consideration for their team's well-being and long-term productivity.
Reddit: As a remote employee, what tools/software do you use the most?
What Challenges Do Team Management Tools solve for business
Team management tools address various challenges businesses face in managing teams, particularly in remote and hybrid work environments.
Here are the key issues that Remote Team Management Software and tools for managing distributed teams, remote team help solve:
1. Communication Gaps
Since the pandemic, disconnected teams have often faced miscommunication and a lack of real-time updates, which can lead to confusion and workflow inefficiencies.
Businesses are looking for Team management tools to address this issue, and those tools do this by offering centralized communication platforms that streamline teams' interaction.
With features like instant messaging, video conferencing, and discussion threads, these tools ensure that team members remain connected and informed, fostering clear and consistent communication across the organization.
2. Collaboration Barriers
Now, let's get into collaboration. Collaborating effectively on projects can be challenging when team members are spread across different locations and time zones.
This often leads to delays, misunderstandings, and fragmented workflows. Team management tools address this problem by providing shared workspaces, file-sharing features, and real-time document collaboration.
These capabilities enable team members to contribute seamlessly, regardless of their geographic location, fostering a more cohesive and efficient approach to teamwork.
3. Task and Workflow Management
Another issue with managing remote teams challenges to look out for, such as tracking task progress, setting priorities, and meeting deadlines can be significant business challenges, especially in fast-paced or remote work environments.
Team management tools address these issues by offering features such as task assignment, progress tracking, and deadline management. These tools give managers and employees clear visibility into responsibilities and timelines, ensuring that projects stay on track and goals are met efficiently.
This streamlined approach helps teams maintain productivity and accountability across all levels of an organization.
4. Accountability and Productivity Monitoring
Measuring performance and ensuring accountability can be challenging in remote work settings, where direct oversight is limited.
Team management tools address this problem by offering features like time tracking, performance analytics, and activity logs. These capabilities provide managers with valuable insights into employee productivity and task progress, enabling them to identify areas for improvement and ensure that goals are consistently being met.
These tools help maintain high-performance levels even in remote work environments by fostering transparency and accountability.
5. Employee Engagement
Remote and distributed teams frequently need more engagement and cohesion, decreasing morale and productivity.
Team management tools address this issue by incorporating features designed to foster community and connection.
Tools like team chat channels, polls, and recognition systems encourage interaction, collaboration, and acknowledgement of individual and group achievements. Creating a more engaging and inclusive environment, these tools help improve team morale and strengthen the bonds within remote and distributed teams.
6. Access to Information and Resources
When information is scattered across multiple platforms, employees often face challenges locating essential files, documents, or project details.
This can lead to wasted time, frustration, and decreased productivity. Team management tools solve this problem by providing centralized repositories where all essential resources are stored and organized.
With integrated search functions, users can quickly find the information they need within a single platform, streamlining workflows and ensuring that teams remain efficient and focused.
7. Scalability Challenges
Managing larger teams and more complex projects becomes increasingly challenging as businesses expand.
The growing scale can lead to inefficiencies, miscommunication, and oversight difficulties. Team management tools are designed to address these complexities, offering scalable solutions that grow with the organization.
With features such as customizable workflows, seamless integrations with other software, and robust data management capabilities, these tools enable businesses to adapt to their evolving needs while maintaining efficiency and organization.
Strategies for Effective Remote Team Management
Here we list managing remote teams best practices and how leaders who want to overcome these difficulties have to implement efficient management plans that support involvement, communication, and output among distant workers.
1. Establish Clear Expectations
Establishing clear expectations is among the most important components of running remote teams. This covers the early definition of roles, duties, and performance criteria. Use project management tools to create deadlines, task outlines, and key performance indicators (KPIs) allowing team members to monitor their own development.
Managers may establish well-defined project plans and guarantee that everyone knows their tasks by using tools like AgilityPortal. This openness makes staff members responsible and involved in their job.
2. Foster Open Communication
The success of remote teams depends critically on open communication. Urge staff members to routinely discuss their ideas and difficulties. Create a culture where comments are appreciated and sought for. Set up daily or weekly check-ins to go over development and any challenges staff members could run across.
These exchanges may be facilitated by tools such as Slack, Microsoft Teams, and communication tools included in AgilityPortal. Frequent contact ensures that everyone feels connected and supported, therefore helping to close the distance between distant workers.
3. Utilize Remote Employee Tracking Software
Monitoring output and performance calls for investing in remote employee tracking systems. Good monitoring tools let managers learn about team member time allocation without resorting to micromanagement.
Remote employee tracking software features available from AgilityPortal include performance metrics, project management, and time tracking. Using such instruments helps managers keep an eye on output, spot problems, and provide quick assistance as required. This data-driven strategy may support better general performance and aid in keeping responsibility.
4. Prioritize Employee Engagement
Productive and content in their employment are more probable traits of engaged workers. Establish a culture of involvement by means of regular virtual team-building exercises, acknowledging team and individual achievements, and encouraging social contacts among team members.
Get comments on employee engagement and satisfaction using tools within AgilityPortal. Knowing employee mood will enable managers to modify their plans to better fit the demands of their teams
5. Encourage Work-Life Balance
Encouragement of a good work-life balance is crucial in avoiding burnout among distant workers. Urge team members to schedule frequent breaks and to create limits on their working hours.
Establish rules discouraging after-hours correspondence and pushing vacation days' usage. Managers who exhibit a good work-life balance will show the value of self-care and wellness.
Top 3 Tools to Watch for Managing Distributed Teams in 2025
Here's a concise overview of each remote working software, highlighting their ideal use cases, key features, and advantages and disadvantages. Screenshots are also included to provide a visual glimpse of their user interfaces.
#1. AgilityPortal - Best for organizational management and building connection
- AgilityPortal is a comprehensive app that has been around since 2019 fairly new Communication App on the list, its a cloud-based platform that enhances team communication, collaboration, and productivity across remote and hybrid work environments. Its robust feature set includes messaging, video conferencing, and secure file sharing, making it an all-in-one solution for managing teams effectively.
- Ideal for organizations seeking a flexible yet integrated collaboration tool, AgilityPortal allows users to store files in a centralized document library, manage workflows, create team groups, and receive real-time notifications. The platform is fully customizable to suit the needs of different teams and provides seamless communication options through instant messaging, video calls, and web conferencing.
- AgilityPortal seamlessly integrates with popular applications such as Microsoft Office 365, Gmail, and Slack, enabling users to work on shared files within apps like Word, PowerPoint, Excel, and SharePoint.
- This real-time collaboration feature allows teams to work on content across various devices, ensuring efficient communication, document sharing, and project management for distributed teams.
Features
- AgilityPortal includes a comprehensive suite of tools such as automated employee scheduling, HR management, real-time labor cost tracking, compliance management, and leave management. The platform also supports automated tax calculations, customizable reporting, and multi-language functionality, making it a scalable solution for businesses of all sizes. And project management tools, performance analytics, and employee engagement surveys add value by providing actionable insights and fostering team alignment.
Integrations
- AgilityPortal seamlessly integrates with major office and HR applications, as well as scheduling and video conferencing tools, including Microsoft Office, Outlook, Teams, Entra, Gmail, Google Calendar, Slack, Zoom, and Bamboo. These integrations ensure a unified experience, enabling teams to collaborate, communicate, and manage tasks efficiently across widely-used platforms.
Pros:
- Comprehensive Feature Set - AgilityPortal offers a wide range of tools, including shift management, leave requests, project management, employee engagement surveys, performance analytics, and collaboration spaces, providing a holistic solution for team management.
- User-Friendly Interface - Users have praised its intuitive design, which facilitates easy navigation and quick adoption across teams.
- Robust Customer Support - The support team is noted for being responsive and proactive, assisting users effectively and communicating product enhancements promptly.
- Customization Options - The platform allows for significant customization, enabling organizations to tailor it to their specific needs and workflows.
Cons:
- Learning Curve for Advanced Features - Some users have reported that certain advanced functionalities may require time to master, especially for those unfamiliar with similar intranet solutions.
- Documentation Needs Improvement - While the platform is feature-rich, the accompanying documentation has been noted as an area needing enhancement to better support users.
LEARN MORE ABOUT HUBSTAFF:
#2. Hubstaff - Best remote working software for time and attendance tracking
Features
- Hubstaff is a versatile workforce management platform offering features like time tracking, employee monitoring, project management, payroll automation, and detailed analytics to enhance productivity and accountability. With integrations for over 30 tools and accessibility across mobile and desktop devices, it empowers teams to work efficiently and stay connected.
Integrations
Hubstaff offers various integrations to enhance functionality and streamline workflows across various business operations. Key integration categories include:
- Project Management - Hubstaff integrates with tools like Asana, Trello, Jira, and ClickUp, allowing seamless time-tracking of tasks and projects.
- Communication - Integration with Slack enables real-time notifications and updates, keeping teams informed about time-tracking activities and task completions.
- Payments, Accounting, and Invoicing - Hubstaff connects with platforms like QuickBooks, FreshBooks, and PayPal, facilitating streamlined payroll processing and invoicing.
- CRM - Integration with Salesforce allows tracking of time spent on customer-related tasks, enhancing client relationship management.
- Help Desk - Hubstaff integrates with Freshdesk and Zendesk, enabling time tracking on support tickets to improve customer service efficiency.
Additionally, Hubstaff supports connections with hundreds of other applications through Zapier, offering extensive customization to meet diverse business needs.
These integrations enable businesses to centralize operations, improve productivity, and maintain accurate records across various platforms.
Pros:
- Comprehensive Feature Set - Hubstaff offers a wide range of tools, including time tracking, employee monitoring, project management, payroll automation, and detailed analytics, providing a holistic solution for team management.
- User-Friendly Interface - Users have praised its intuitive design, which facilitates easy navigation and quick adoption across teams.
- Robust Customer Support - The support team is noted for being responsive and proactive, assisting users effectively and communicating product enhancements promptly.
- Customization Options - The platform allows for significant customization, enabling organizations to tailor it to their specific needs and workflows.
Cons:
- Learning Curve for Advanced Features - Some users have reported that certain advanced functionalities may require time to master, especially for those unfamiliar with similar intranet solutions.
- Documentation Needs Improvement—While the platform is feature-rich, the accompanying documentation has been noted as an area that needs enhancement to better support users.
- Design Limitations - A few users have mentioned that the design could be improved, indicating that the user interface may not meet everyone's aesthetic preferences.
LEARN MORE ABOUT HUBSTAFF:
#3. Wrike - Best remote working software for project management
- Wrike been around since 2006 is a versatile project management application designed to help teams, especially remote ones, streamline project workflows and enhance collaboration. Tailored for organizations managing complex tasks, Wrike offers tools that make planning, tracking, and executing projects effectively easier. Its flexibility and customization capabilities allow businesses to adapt the platform to their unique needs, making it a popular choice across industries.
- One of Wrike's standout features is its task management system, which enables users to create, assign, and prioritize tasks easily. Teams can use visual tools like Gantt charts and Kanban boards to map out timelines, set deadlines, and monitor project progress. This ensures that all team members remain aligned and projects stay on track.
- Another critical feature of Wrike is its focus on real-time collaboration. Team members can share documents, provide feedback, and communicate directly within the platform, eliminating the need for scattered emails or external messaging tools. Wrike also integrates with popular third-party tools like Google Drive, Microsoft Teams, and Slack, enhancing its collaborative capabilities.
- Wrike's customizable workflows and dashboards allow managers to set up processes that match their team's operations. Whether it's marketing campaigns, product launches, or IT projects, Wrike adapts to suit different use cases. Its built-in analytics and reporting tools also provide actionable insights, helping teams track performance, identify bottlenecks, and optimize productivity.
- Security and accessibility are also top priorities for Wrike. It offers cloud-based access, allowing teams to work from anywhere on any device. Features like user permissions and data encryption ensure that sensitive information remains secure.
Features
- Wrike offers a comprehensive suite of features, including task management with Gantt charts and Kanban boards, real-time collaboration tools for seamless teamwork, and customizable workflows to fit various project needs. It also integrates with popular apps like Google Drive, Slack, and Microsoft Teams, while providing built-in analytics and reporting for performance tracking.
Integrations
- Wrike integrates seamlessly with a wide range of tools to enhance productivity and streamline workflows. Popular integrations include Google Drive, Microsoft Teams, Slack, Dropbox, and OneDrive for file sharing and communication. It also connects with Salesforce and HubSpot for CRM, Jira for development tracking, and QuickBooks for financial management.
- And, Wrike supports integrations with Adobe Creative Cloud for creative workflows and Zapier to connect with hundreds of other applications, ensuring flexibility and adaptability for diverse business needs.
Pros:
Cons:
LEARN MORE ABOUT WRIKE:
Selection Criteria for the Best Remote Working Software
You might be curious about how I curated this top remote working software list. To create this comprehensive top 3 roundup, I evaluated and compared a wide range of remote tools with consistently high user ratings. After narrowing down my options, I applied specific selection criteria to analyze how each platform performed relative to the others. I also relied on over three years of experience working remotely to identify the features that add significant value in real-world scenarios.
Selection and Evaluation Criteria
Here's a summary of the critical criteria I used to determine the best remote-working software for this article:
- Usability: Remote teams consist of individuals with diverse technical skills, making user-friendliness a top priority. I selected tools with intuitive interfaces, straightforward navigation, and easy access to essential features to ensure they are accessible to all team members.
- Functionality: Robust functionality is crucial when relying on software to complete work. The tools on this list provide a wide range of features tailored to meet the varying needs of different users, ensuring that critical capability is included.
- Support for Collaboration: Seamless teamwork is vital for remote teams, regardless of location. I focused on tools that promote clear communication and effective collaboration between team members and stakeholders, enabling projects to progress smoothly.
- Integrations: Modern SaaS tools excel by working seamlessly with other applications. I prioritized solutions that integrate with popular business tools, particularly those frequently used by remote teams, to create a frictionless user experience.
- Pricing: Budget-conscious pricing is essential, especially as organizations grow and subscription costs increase. I sought tools that offer excellent value for money, including affordable per-user pricing and scalable options for larger teams. While free plans (freemium models) can be a good starting point for small teams, I also considered paid plans that deliver a solid return on investment (ROI) through enhanced functionality and scalability.
This systematic approach allowed me to identify the most valuable remote working tools, balancing usability, functionality, and affordability while ensuring they meet the diverse needs of remote teams and organizations.
The Role of Virtual Team Leadership
The success of remote teams depends mostly on good leadership. These are important traits that effective virtual team leaders have to possess:
1.Empathy
Now when manging remote teams virtual team leadership is imporant, knowing the difficulties team members have and offering encouragement builds loyalty and trust. Good morale and output follow from an atmosphere in which staff members feel appreciated and understood created by sympathetic leaders.
2.Transparency
Open communication of organizational objectives, challenges, and performance criteria helps distant workers to have a common purpose. Frequent updates and honest conversations about expectations will assist to keeping everyone in line.
3.Adaptability
For distant leaders, the capacity to change with the times is very vital. Adopting openness to fresh ideas and flexibility in work procedures might help to produce creative ideas and better team performance.
4.Proactiveness
Maintaining team cohesiveness and output depends on the proactive handling of problems before they become more severe. Anticipating possible problems and putting plans into place to minimize them will enable leaders to properly negotiate the challenges of remote team management.
Remote Team Management Software: Frequently Asked Questions
1. What is Remote Team Management Software?
Remote Team Management Software includes tools that help organizations manage distributed teams by facilitating collaboration, communication, and task tracking.
Popular solutions like ADP Workforce Now, Slack, and Wrike integrate seamlessly with human resources platforms, scheduling software, and enterprise resource planning (ERP) systems, ensuring streamlined workflows for teams of all sizes.
2. Why is Remote Team Management Software important?
With remote work becoming a norm, these tools ensure productivity and clear communication. They integrate key functions like human resource management, payroll software, and employee scheduling software to support independent workers, remote teams, and HR professionals. These platforms simplify management while fostering team engagement and collaboration.
3. What features should I look for?
Look for features such as employee work scheduling software, ATS (Applicant Tracking Systems), task management tools, real-time collaboration, and integrations with ERP enterprise resource systems. Also, ensure the software supports learning management systems (LMS), compliance tracking, and performance monitoring to meet modern workforce needs.
4. What tools integrate with Remote Team Management Software?
Top platforms integrate with major business tools, including Microsoft Teams, Google Workspace, ADP Workforce Now, Gusto Payroll, and Workday. Enterprise resource planning (ERP) software and learning management systems also sync effortlessly with remote team tools, creating a unified ecosystem for managing tasks, tracking performance, and ensuring compliance.
5. Are these tools user-friendly?
Yes, many tools like AgilityPortal, ADP Workforce, Trello, and ClickUp prioritize usability, featuring intuitive interfaces for HR managers, team leaders, and employees. These systems are designed for users with varying technical skills, making onboarding and navigation seamless.
6. How much does Remote Team Management Software cost?
Pricing varies based on features. Many tools, like Patriot Software, offer basic plans or freemium models, while advanced platforms like Workday or ADP Workforce Now charge per user or usage tier. Staff scheduling programs and employee schedule management software also provide flexible options for small businesses and enterprises.
7. Can these tools improve worker motivation?
Yes, features like performance tracking, team recognition tools, and integration with core values and corporate values platforms help boost team morale. Many software solutions even include motivational quotes for workers, encouraging productivity and alignment with organizational goals.
8. Do these systems comply with labor laws?
Modern tools like ADP Workforce Now Login and Gusto Payroll include compliance management, automated tax calculations, and HR pay salary tools to ensure organizations adhere to legal standards.
9. How do these tools assist in recruitment?
With integrated candidate relationship management and applicant tracking systems, these platforms streamline recruiting, ensuring organizations attract and hire the best talent. Solutions like ATS tracking systems and cloud ATS simplify the entire recruitment process.
10. Are these tools scalable for large teams?
Yes, platforms like ADP Workforce, Workday, and enterprise resource planning (ERP) systems are designed to scale as organizations grow. They adapt to expanding teams and offer learning management solutions, HR scheduling apps, and enhanced organizational management structures to accommodate diverse needs.
These tools simplify management, boost productivity, and empower HR professionals to focus on strategic goals, making them essential for the modern workforce.
11. How can I tell which remote working software is right for my business?
To determine which remote working software is best for your business, start by evaluating your team's unique needs and processes. Identify the tasks, workflows, and challenges that require support, such as project management, collaboration, scheduling, or payroll. Look for software that offers features tailored to these requirements, such as task tracking, real-time collaboration, or integration with tools like ADP Workforce Now. Additionally, consider your budget and scalability needs. Assess whether the software provides good value, with flexible pricing plans that align with your financial resources while supporting your business growth. Testing free trials or demos can also help you gauge usability and ensure the platform meets your team's expectations.
12. Are there different types of remote working software?
Remote working software comes in a variety of types, each designed to support specific functions that are essential for managing distributed teams. Popular categories include video conferencing tools like Zoom and Microsoft Teams, which facilitate virtual meetings, and project management software such as Trello and Wrike, which help organize tasks and track progress. For seamless file sharing and collaboration, platforms like Google Drive and Dropbox are widely used. Additionally, tools for time tracking and productivity monitoring, such as Hubstaff, provide insights into work hours and efficiency. Remote team management tools, Communication and messaging solutions like Slack ensure that team members stay connected and engaged, regardless of their location.
Wrapping up
Managing Remote Employees successfully in 2025 calls for a calculated strategy combining good leadership, suitable tools, and clear communication. Organizations may increase employee happiness and output by using best practices for team management and remote employee monitoring systems.
Leaders trying to simplify their remote management systems will find great value in AgilityPortal. Its all-encompassing toolkit promotes performance monitoring, communication, and involvement, therefore enabling managers to properly assist their staff.
Maintaining knowledge of the newest technologies and tactics can help leaders to change with the demands of their teams as remote work develops. For further insights and resources on managing remote teams, explore our AgilityPortal blog.
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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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