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Temperature Check Survey Questions: You Should Be Asking Your Employees
Temperature Check Survey Questions to ask your employees for a more Inclusive Communication in the Workplace. The importance of diversity and inclusive communication in the workplace has recently come into focus. The most recent studies on the state of company communication put this at the top.
What does it mean to be inclusive, and how might it translate into better results for the company?
The key to obtaining survey responses that are actionable is to pose the right questions in the right manner.
It's not enough to claim that your company is open and welcoming. Most people realize there is a significant gap between words and actions. Fairness and diversity can only be achieved via open lines of communication that welcome all perspectives.
In this article, we'll examine what it means to communicate fairly with each member of your team. Here are five practices that will immediately improve your communication with your team.
What is Inclusive Communication?
Companies that practice inclusive communication with their workforce go out of their way to ensure that all employees feel valued and heard. It's about making everyone feel like they matter and contributing to a community where differences are not only tolerated but celebrated. It requires altering processes that can favor particular groups and ensuring that each person believes they have an equal chance to leave their imprint.
As part of this idea, we must also watch how we treat employees on a daily basis. Our ability to make our coworkers feel welcome or unwelcome depends on the words we choose.
The power of words is great, and they play a critical part in elevating the morale of one's staff.
Despite the emphasis on diversity and inclusion in today's workplaces, Quantified Communications found that few leaders possessed innate skills in inclusive communication.
The good news is that this is a skill that can be learned. The following sections will cover how you can learn it.
What is an employee survey?
A staff survey serves as a structured questionnaire aimed at assessing various aspects such as morale, engagement, accomplishments, and the overall satisfaction of employees within an organization. Consider this survey as a crucial tool for gathering valuable feedback from your workforce, providing insights into the levels of productivity and motivation exhibited by your employees in their professional roles.
By leveraging the information obtained through these surveys, organizations can formulate effective strategies to boost employee motivation and enhance overall job satisfaction.
This feedback mechanism not only serves as a means of understanding the current state of the workforce but also acts as a foundation for implementing targeted initiatives that foster a positive and thriving work environment.
The insights derived from employee surveys enable management to identify areas for improvement, address potential concerns, and implement changes that align with the aspirations and needs of the workforce. It serves as a proactive approach to enhancing the overall well-being of employees, ultimately contributing to a more harmonious and productive workplace.
The significance of employee surveys lies in their ability to provide a comprehensive understanding of the workforce dynamics, allowing organizations to make informed decisions that positively impact employee motivation, job satisfaction, and overall organizational success.
5 Types of employee surveys
You can employ these five prevalent forms of employee surveys to assess your employees' sentiments on various aspects, ranging from business procedures to the overall employee journey:
1. Survey on Employee Satisfaction
The results of these surveys can highlight straightforward improvements for both employers and employees, enabling the swift implementation of solutions that bring about positive changes.
- Assessing Job Satisfaction: Understand how satisfied employees are with their roles, responsibilities, and the overall work environment.
- Identifying Areas for Improvement: Pinpoint specific aspects of the workplace, such as communication, leadership, or work-life balance, that may need improvement.
- Employee Engagement: Measure the level of engagement and commitment employees have toward their work and the organization.
- Retention: Identify factors that contribute to employee retention or turnover, helping organizations address issues and retain valuable talent.
- Productivity: Assess the impact of employee satisfaction on productivity, as satisfied employees are often more motivated and productive.
- Communication Effectiveness: Evaluate the effectiveness of internal communication channels and ensure that employees are well-informed about company policies, changes, and goals.
- Employee Well-being: Gauge the well-being of employees, considering both physical and mental health aspects, and address any concerns that may affect their performance.
- Building a Positive Work Culture: Understand how employees perceive the organizational culture and work environment, aiming to foster a positive and inclusive workplace.
- Leadership Evaluation: Assess employees' opinions on leadership effectiveness and identify areas where leadership can be enhanced to create a more supportive and inspiring environment.
- Strategic Planning: Use employee feedback to inform strategic planning and decision-making, aligning organizational goals with the needs and expectations of the workforce.
Overall, employee satisfaction surveys play a crucial role in enhancing workplace satisfaction, promoting employee well-being, and contributing to the overall success and growth of the organization.
Surveys on job satisfaction empower teams, providing them with a platform to voice their opinions. These surveys offer prompt insights into the prevailing sentiments of employees, fostering trust between the workforce and management by demonstrating a commitment to openness and change.
2. Employee engagement survey
These surveys highlight distinctions between satisfied employees striving for personal and company growth and those merely fulfilling the minimum requirements to retain their jobs, without seeking professional development.
Here are key purposes of conducting employee engagement surveys:
- Measure Engagement Levels: The primary goal is to quantify how engaged employees are in their work. This includes their enthusiasm, commitment, and willingness to go above and beyond in their roles.
- Identify Strengths and Weaknesses: The survey helps identify specific areas where the organization excels in fostering employee engagement and areas that may need improvement. This information guides targeted interventions.
- Enhance Communication: Employee engagement surveys provide a platform for employees to express their opinions and concerns. The results can be used to improve communication channels within the organization.
- Retain Top Talent: Engaged employees are more likely to stay with the organization. By understanding what factors contribute to engagement, employers can implement strategies to retain key talent.
- Boost Morale and Productivity: Positive engagement correlates with higher levels of morale and productivity. Understanding the factors that contribute to engagement allows organizations to create a work environment that fosters motivation and a sense of purpose.
- Inform Leadership Strategies: The feedback from engagement surveys informs leadership about the effectiveness of their management practices. It highlights areas where leaders excel and areas where adjustments may be necessary.
- Guide Employee Development: The survey results can be used to tailor employee development programs. This ensures that training and professional growth opportunities align with the needs and preferences of the workforce.
- Enhance Organizational Culture: Employee engagement surveys contribute to the development and maintenance of a positive organizational culture. This includes factors such as trust, collaboration, and a sense of belonging.
- Support Change Management: When organizations undergo changes, understanding employee sentiment is crucial. Engagement surveys can gauge how well employees are adapting to change and identify areas that may require additional support.
- Benchmarking and Continuous Improvement: Conducting engagement surveys at regular intervals allows organizations to track changes over time. It provides a baseline for benchmarking against industry standards and helps in assessing the effectiveness of initiatives aimed at improving engagement.
Employee engagement surveys serve as a valuable tool for organizations to assess and improve the overall employee experience. They provide actionable insights that can positively impact retention, productivity, and the overall success of the organization.
Employee engagement surveys contribute to cultivating employee happiness and satisfaction. They serve as a tool to measure retention levels and provide valuable insights on strategies to enhance it.
These surveys reveal which employees are deeply committed to their work and how many may be contemplating leaving their positions.
3.Culture survey
An employee culture survey is a systematic tool used by organizations to gather information and insights about the prevailing work environment, values, beliefs, and behaviors within the company.
This survey aims to assess the overall organizational culture and employee experiences. It typically includes questions related to teamwork, communication, leadership, work-life balance, job satisfaction, and alignment with company values.
The importance of conducting employee culture surveys lies in several key factors:
- Employee Engagement: These surveys help measure the level of employee engagement within the organization. Engaged employees are more likely to be productive, committed, and satisfied with their work.
- Identifying Strengths and Weaknesses: Culture surveys provide a snapshot of the current organizational culture, highlighting both positive aspects and areas that may need improvement. This information is valuable for making informed decisions about workplace policies and practices.
- Employee Satisfaction: By gauging employee satisfaction, organizations can identify factors that contribute to a positive work environment and those that may be causing dissatisfaction. This insight is crucial for retaining top talent.
- Organizational Alignment: Culture surveys help assess how well employees align with the company's mission, vision, and values. This alignment is important for fostering a sense of purpose and unity among the workforce.
- Employee Well-Being: Understanding the impact of the work environment on employee well-being is essential. A positive culture contributes to better mental and emotional health among employees.
- Retention and Recruitment: Organizations with a positive and inclusive culture are more likely to retain their existing talent and attract new, skilled employees. This can lead to a more competitive edge in the market.
- Continuous Improvement: Regularly conducting culture surveys allows organizations to track changes in culture over time. This helps in implementing targeted interventions and monitoring the effectiveness of initiatives aimed at improving the work environment.
- Leadership Development: Feedback from culture surveys can be instrumental in identifying areas where leadership development is needed. It helps leaders understand how their actions and decisions impact the overall culture of the organization.
Employee culture surveys provide a quantitative and qualitative understanding of the workplace environment, helping organizations make informed decisions to improve employee satisfaction, engagement, and overall organizational performance.
4. Employee experience survey
Consider an employee experience survey as a comprehensive assessment aiming to gauge how employees perceive their overall work journey thus far. These surveys should encompass the entire spectrum, starting from the onboarding process, covering day-to-day responsibilities, and extending to the outlook for future opportunities.
So a employee experience survey (EES) is a questionnaire used to measure employee satisfaction and engagement with their work and the workplace.
It is a tool that organizations can use to collect feedback from employees on a variety of topics, such as:
- Job satisfaction: How happy are employees with their jobs? What do they like and dislike about their work?
- Engagement: How motivated and committed are employees to their jobs and the organization?
- Work-life balance: How well does the organization support employees in achieving a good work-life balance?
- Compensation and benefits: Are employees satisfied with their compensation and benefits package?
- Workplace culture: What do employees think about the company culture? Do they feel valued and respected?
- Leadership: Do employees trust and respect their leaders? Do they feel supported and empowered in their roles?
EES results can be used to identify areas where the organization can improve the employee experience.
For example, if employees are dissatisfied with their compensation and benefits package, the organization may need to review its salary structure or offer additional benefits.
If employees are feeling disengaged, the organization may need to implement new initiatives to boost morale and motivation.
5. Process feedback survey
A survey for feedback on business processes aims to address logistical issues within the regular operations of the workplace. Questions in this survey may explore the tools available to employees for task completion and the resources provided for client interactions. Solutions drawn from the data collected in this survey are intended to streamline tasks and enhance overall efficiency.
The primary objective of a business process feedback survey is to acquire insights from employees, customers, or other stakeholders regarding their interactions with a specific business process. This gathered information serves as a valuable resource for pinpointing opportunities for enhancement, enabling the implementation of changes that enhance the efficiency, effectiveness, and user-friendliness of the process.
Several advantages accompany the use of business process feedback surveys:
- Identification of Bottlenecks and Inefficiencies: These surveys facilitate the recognition of areas within business processes that may be causing slowdowns or complications for employees or customers.
- Enhancement of Customer Satisfaction: Understanding customer needs and preferences in relation to business processes empowers businesses to make adjustments that elevate the overall satisfaction and experience of their customers.
- Elevation of Employee Morale and Productivity: Valuing and implementing employee feedback fosters a sense of engagement and productivity among employees, as they feel heard and appreciated.
- Cost Reduction: Streamlining business processes and eliminating inefficiencies, as identified through feedback surveys, results in resource savings and improved financial outcomes.
Business process feedback surveys can be executed through various methods, such as online surveys, paper surveys, and face-to-face interviews. The selection of a convenient method for stakeholders ensures effective data collection.
Following the collection of feedback, a thorough analysis is crucial to identifying common themes and areas requiring improvement. Subsequently, a comprehensive plan should be devised to address these areas and execute the necessary changes.
Regularly conducting business process feedback surveys is instrumental in ensuring continuous evolution and improvement of processes. By attentively listening to the input from both employees and customers, businesses can implement changes that benefit all parties involved.
5 Simple Ways to Talk Better at Work
Want to foster a more cooperative atmosphere in the workplace? Here are five guidelines for leaders to follow when communicating with their teams to ensure everyone feels included.
Tip 1: Talk to People as Individuals
Make your chats at work more about the person you're talking to. Think about what they like, what matters to them, and how they see the world. Use words and ideas they know and care about. Remember, what you think isn't always what everyone else thinks.
To really get what your team needs, you need to let them tell you. Maybe start with a survey or ask them directly. But don't just listen—make sure you do something about what they say.
Tip 2: Choose Your Words Carefully
When talking to your team, it's important to think about the words you use. Show understanding and be aware of the biases that we all carry without realizing it.
Instead of talking about 'I' all the time, use words like 'we' and 'together' that make everyone feel they're part of a team. Stay away from words that make assumptions about gender, like 'guys' or 'chairman.' Go for words that don't leave anyone out.
Tip 3: Build Stronger Bonds
You can't lead without a team looking towards you. That's why making strong connections with your team members is crucial. Listen to them, for real. Try to get where they're coming from and show that their views matter to you. Be genuinely interested in how they're doing. When you care, they'll notice.
And when you respect your team, they'll respect each other too. Everyone gets along better that way.
Tip 4: Keep it Real
You might have heard about being real. But what does that actually mean? When you're authentic, people believe you're being yourself, your words and actions line up, and you're not just putting on an act.
For leaders, being authentic means chatting with your team, not just giving orders. This way of talking is more likely to stick in someone's mind and means more to people. You should try to create understanding, not just dish out information.
For better realness in your chats and meetings, avoid reading off a script. Talk like you're having a conversation, and let your feelings show when it fits. In your emails and notes, keep your promises, ask for thoughts on how things are going, and help everyone feel like they belong to the team.
Tip 5: Make Things Clear
If you want to lead inclusively, you've got to be clear about what you expect from your team, especially about their work. This way, you can be fair to everyone, no matter what you might think, without realizing it.
The key is to care more about what gets done, not just how long someone sits at their desk. This is super important now that a lot of us are working in new ways, sometimes from home, sometimes from the office.
What is a Team Temperature Check
A team temperature check serves as a crucial management tool to gauge the collective perception within a team.
This process enables leaders to assess the team's dynamics and sentiment, empowering them to respond in a manner that fosters camaraderie and cohesion. By understanding the team's perspective, leaders can make informed decisions to enhance communication and overall team effectiveness.
Statistics consistently highlight the importance of team dynamics in organizational success.
According to a recent survey conducted across various industries, teams with a strong sense of cohesion and positive camaraderie demonstrate a significant increase in productivity, with a reported 20% higher output compared to teams lacking these qualities.
Additionally, studies indicate that teams with open communication channels, facilitated by regular temperature checks, experience a 25% reduction in conflicts and misunderstandings.
In a global context, where remote work is becoming increasingly prevalent, team temperature checks play a pivotal role in maintaining team morale and connection. Research shows that teams engaging in regular virtual check-ins, akin to traditional face-to-face meetings, exhibit a 15% higher level of job satisfaction among team members.
When to use the Team Temperature Check
The Team Temperature Check is designed for implementation in a functional team setting, where there are no significant challenges or issues with workplace culture. It is not intended for use in situations where there is evident discontent among team members, confrontations, or conflicts.
Unlike a daily check-in, a temperature check is most effective when conducted on a weekly basis, or less frequently if circumstances dictate.
The frequency of check-ins can be determined by the overall needs of the entire team or the individual needs of team members.
Especially during periods of high delivery expectations or elevated stress, the Team Temperature Check serves as a potent tool for team management, fostering motivation in challenging environments. If you sense that an individual within the team is feeling overlooked, this proactive approach can swiftly change their experience, preventing potential challenges in the future.
Team Temperature Check questions to include in a survey
- On a scale of 1-10, how satisfied are you with your current workload?
- What specific aspects of your work are bringing you the most joy or satisfaction this week?
- Are there any particular challenges or obstacles you've encountered recently that may be affecting your work or well-being?
- How would you describe the level of collaboration within the team lately?
- In terms of communication, do you feel well-informed about team goals and projects?
- Are there any tools or resources you feel are lacking in supporting your work?
- On a scale of 1-10, how would you rate your work-life balance at the moment?
- What activities or practices help you recharge and maintain a healthy work-life balance?
- Is there anything you would like to share about your current professional development or career goals?
- Are there any team members you feel you could collaborate with more effectively, and if so, why?
- On a scale of 1-10, how would you rate the team's overall morale?
- What specific actions or initiatives do you think could boost team morale?
- Are there any recent accomplishments or successes that you feel proud of or would like to highlight?
- In terms of team dynamics, are there any suggestions or improvements you would like to propose?
- How would you describe the level of support you receive from your colleagues and superiors?
Feel free to adapt these questions to suit the specific dynamics and goals of your team.
Making Communication Inclusive: A Skill for Everyone
Remember, the way we talk with others is a habit, and no matter what stage we're at in our work life, we can all get better at including everyone. It's always worth the effort to make sure your team members feel acknowledged, listened to, and important.
If you're looking for more guidance, we're here to offer tips and strategies. Our digital workplace tools include a versatile messaging system, which can help you tailor your messages, hear what your team thinks, and foster a sense of togetherness among everyone. To see how it works, why not check out a demo of our software?
Click here to schedule a demo of AgilityPortal.
Wrapping up
Leaders who want to get inclusive communication in the workplace must make an ongoing effort to improve workplace communication.
Leaders may make great progress toward valuing and hearing all voices when they adopt practices like being personable, monitoring language, prioritizing relationships, being real, and setting clear expectations.
These methods not only improve workers' experiences but also fortify the group as a whole. Effective and long-lasting inclusion efforts can be bolstered by continuous learning and the use of appropriate tools, such as complete intranet solutions.
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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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