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What is Best Tool for Project Management? [2024 and Beyond]
So you on the search for a new tool and you might find yourself asking What is Best Tool for Project Management?
Project management tools remain crucial in 2024 for steering projects toward success.
Whether it's complex ventures requiring extensive planning, task assignment, deadline establishment, adherence, and time monitoring, or simpler tasks demanding only a checklist, the right tool can make a significant difference.
Superior tools are vital for accurate measurement, categorization, assignment, and management of tasks.
With numerous options available, identifying what is best tool for project management can be challenging, especially for newcomers.
Therefore, we have meticulously selected the best project management tools for managers, ensuring a well-informed choice.
What are project management tools?
Project management tools are specifically crafted to aid individuals or teams in effectively overseeing their projects and tasks, look at project management apps like Remote Collaboration Tools that allow members to come together to complete projects.
The term "PM tools" typically encompasses project management software, which can be either purchased or utilized online for free.
In the contemporary, high-speed business landscape, project management plays a pivotal role in ensuring organizational success.
Successful project management entails the meticulous planning, organization, and resource management required to accomplish specific objectives within a defined timeframe. Nevertheless, manual project management can prove challenging, time-intensive, and prone to errors.
To address these challenges, project management software has emerged as a viable solution, offering a diverse array of features and functionalities.
This article delves into the realm of project management tools, examining their nature, the various types available, and the advantages they bring. Furthermore, we will provide insights into selecting the most suitable tool for your business and offer tips on optimizing your project management endeavors.
What makes a good Project Management Software?
From overseeing deliverables to resource management, budget tracking to team collaboration, the considerations in running and managing projects are numerous.
This is equally true when selecting the appropriate project management software tool.
Here's a breakdown of the top five crucial functional aspects to guide your decision-making process:
- Task Lists: The ability to assign and update task statuses ensures that everyone on your team is aligned and informed.
- Schedules: Many tools provide calendars, Gantt charts, or milestone features to help you comprehend a task's place in the overall project and the time available for its completion.
- File Sharing: The capability to share and organize crucial project documents eliminates the time wasted searching for files.
- Communication: Smooth communication is pivotal in project management, facilitating quick and easy problem-solving.
- Reporting: Essential for all team members to stay updated on the project as a whole, reporting is also a significant asset for project managers ensuring timely progress and task completion.
With these aspects in mind, let's explore the top 15 best project management software options.
Benefits of using project management tools
Determine the Right Timing Among various project management tools, Gantt chart software proves most effective in accommodating delays. Zoho Projects' Gantt chart software allows for capturing and managing task dependencies and their impact on task completion time.
Avoid Ambiguous Scopes Work Breakdown Structure (WBS) serves as a vital project planning tool, aiding in ideation and playing a crucial role in the planning phase. It offers an outline for establishing costs, schedules, and work hours, while also assisting in risk identification.
Constrain Your Costs The cost baseline involves comparing your initial estimate with the actual project spending. It closely aligns with schedule and scope baselines, recognizing their interconnected nature, thus preventing project costs from deviating from the planned budget.
Foster Collaboration to Unlock Opportunities Effective team communication is promoted by the best project management tools for teams. These tools encourage team members to ask questions, ensure balanced workloads, discuss potentially unsuccessful ideas, and ultimately achieve success in their work.
Bridge the Communication Gap Streamlining cross-functional communication through proper project planning tools ensures that all stakeholders are informed about accessing relevant information.
Project management tools play a crucial role in preventing delays in important decisions and ensuring the smooth progression of all project activities.
How to choose the best project management tool
Let's acknowledge the reality: the market is flooded with a diverse array of project management tools, each equipped with numerous features tailored to the specific needs of various businesses.
Navigating through this plethora of options to choose the right project management app can be nothing short of confusing. However, fear not, as we're here to guide you through the decision-making process. Here's a set of questions to ponder before you commit to the significant choice:
Let's acknowledge the reality: the market is flooded with a diverse array of project management tools, each equipped with numerous features tailored to the specific needs of various businesses.
Navigating through this plethora of options to choose the right project management app can be nothing short of confusing. However, fear not, as we're here to guide you through the decision-making process.
Here's a set of questions to ponder before you commit to the significant choice:
What are Your Needs? Every business grapples with its own set of challenges, and yours is undoubtedly no exception. Take a moment to compile a list of these pain points, which may include issues such as:
- Overwhelming email volume with low open rates
- Frequent missed deadlines
- Inconsistent and unproductive meetings
- Uneven distribution of workloads
- Time wasted on non-essential tasks
- Existence of silos within teams
Essential Features in Online Project Management Tools
Discover the top six indispensable features in project management tools that are vital for leading and executing successful projects.
- Task Management: Projects comprise numerous tasks, some sequential, others concurrent, all contributing to a singular goal. Assigning these tasks accurately within the project team is critical. Task management may seem mundane, but it's a core component of project management, necessitating tools that streamline and facilitate this process effectively.
- To-do Lists: A to-do list, while elementary, is an essential tool for project execution. Storing this list in a central, easily accessible location ensures that every team member stays informed about completed tasks and pending work. Effective project management tools should incorporate a to-do list feature, enabling team-wide visibility and coordination. Notion templates by Template Road offer customizable to-do lists that can be shared across teams, ensuring tasks are tracked in real time and everyone stays aligned on priorities. These templates streamline task management, making it easier to monitor progress and meet deadlines.
- Time Tracker: Time tracking is a complex yet essential aspect of project management. At a project's conclusion, understanding time allocation per task can be challenging without previous tracking. A robust time tracker aids in precise billing, insightful team management, and meticulous planning. It's especially useful in preparing for similar future projects by providing a reference for time allocation for various tasks and phases. Desktop time trackers, in particular, offer a seamless and integrated way to monitor and manage time directly from your workstation, ensuring accuracy and ease in capturing every detail of your work process.
- Collaboration: Collaboration is essential, whether your team consists of a few individuals or several hundred. A robust project management system must incorporate advanced collaboration features to facilitate seamless interaction and coordination among team members, regardless of their location. Essential collaboration tools include real-time updates, seamless communication, and automated notifications, ensuring efficient teamwork.
- Integration: Considering the complexity of projects, it's crucial to understand how changes in one aspect affect others. Effective project management tools should offer features that assist in analyzing these trade-offs and understanding how resource reallocation impacts the project timeline.
- Detailed Reporting: Strategic overviews of a project's status are best achieved through detailed reports. Project management tools should be capable of compiling comprehensive information on schedule, cost, team performance, and resource utilization. The ability to generate insightful project reports that highlight completion status, budget adherence, inefficiencies, and more is invaluable. Moreover, customization options for these reports can significantly enhance their utility.
What is Best Tool for Project Management? in 2024
Project management tools remain crucial in 2023 for steering projects toward success.
Whether it's complex ventures requiring extensive planning, task assignment, deadline establishment, adherence, and time monitoring, or simpler tasks demanding only a checklist, the right tool can make a significant difference.
Superior tools are vital for accurate measurement, categorization, assignment, and management of tasks.
With numerous options available, identifying what is best tool for project management can be challenging, especially for newcomers.
Therefore, we have meticulously selected the best project management tools for managers, ensuring a well-informed choice.
Top 7 Free Project Management Tools to Explore
When scouting for a project management tool in 2023, consider this curated list of the best tools, featuring both complimentary and subscription-based options, each with its unique set of features.
Your might be aksing what is the best tool for project management free? Well here is the project management tools list, not all are free but check it out.
AgilityPortal stands out as a top-tier project management tool.
Perfect for both seasoned functional project managers and novices, it offers a comprehensive array of features, ensuring robust project management. Its intuitive and visually appealing interface makes it a universally suitable choice for diverse organizational needs.
AgilityPortal is particularly tailored for functional managers who take on project management roles informally rather than for certified project management professionals.
Key features of AgilityPortal project management
- Versatile project perspectives, encompassing Gantt, Kanban, calendar, table, and portfolio views.
- Capability to append comments, sub-actions, dependencies, and attachments to action cards.
- Time-tracking and timesheet features.
- Resource management functionalities.
- Integration with over 1,000 tools
- AgilityPortal Goals application for goal setting and tracking.
- Native chat and email integrations enhancing connectivity.
- Collaborative note-taking tool.
AgilityPortal Pricing Structure
AgilityPortal offers four pricing models:
- Small (P1): A fixed monthly or annual rate.
- Medium (P2): Begins at $3 per user/month, $30 total. Ideal for SMEs with remote teams needing quick access to key documents and tools.
- Large (P3): Starting from $5 per user/month, $50 total. Best for expanding businesses looking to revamp their intranet for enhanced communication and celebration.
- Enterprise (P4): From $10.00 per user/month, $100 total. Suited for large, complex organizations seeking an advanced intranet to connect and unify diverse departments.
Who It's For
- Project teams: AgilityPortal provides a centralized space for project teams to collaborate on tasks, track progress, and communicate with each other. It also offers Kanban boards, Gantt charts, and other project management tools.
- Sales teams: AgilityPortal can be used to manage leads, track sales pipelines, and collaborate with colleagues on sales activities. It also offers features for generating proposals, contracts, and invoices.
- Marketing teams: AgilityPortal can be used to manage marketing campaigns, track marketing metrics, and share marketing content with team members. It also offers features for creating newsletters, social media posts, and landing pages.
- Customer service teams: AgilityPortal can be used to manage customer interactions, track customer satisfaction, and collaborate with colleagues on customer support issues. It also offers features for creating knowledge bases, FAQs, and support tickets.
- HR teams: AgilityPortal can be used to manage employee onboarding, track employee performance, and collaborate with colleagues on HR tasks. It also offers features for creating employee handbooks, training materials, and performance reviews.
2.Trello
Trello stands as a prominent web-based project management solution featuring collaborative tools essential for team projects.
It's known for its user-friendly interface, employing boards, lists, and cards for task organization and team coordination. Users can interact within these cards, exchanging files and comments for seamless collaboration.
However, Trello does lack in-depth reporting and project tracking capabilities compared to alternatives like AgilityPortal. It's best suited for individuals or smaller teams handling a limited number of projects concurrently.
Key features of Trello project management
- Trello utilizes boards, cards, and lists as integral components in project management.
- Checklists within a card facilitate the creation of subtasks.
- Allocation of tasks to multiple members ensures timely notifications of any card updates.
- Tasks can be assigned deadlines for effective time management.
- An activity log provides real-time updates to keep the team informed.
- The inclusion of attachments streamlines the efficient organization of resources.
- Trello's built-in automation tool, Butler, minimizes tedious tasks by leveraging the power of automation.
- Regular backups of Trello boards protect your data from accidental deletions or technical issues.
Trello pricing struture
Trello offers a complimentary basic plan. Its paid tiers include enhanced features like automation, integrations, and priority support.
Who It's For
Trello is commonly utilized by project teams, development teams, marketing teams, remote teams, and collaborative groups looking for an intuitive platform to manage tasks, projects, and workflows. Its adaptability and ease of use make it applicable to a wide range of professional settings.
3. Asana
Asana, a versatile SaaS platform for project management, emphasizes collaborative workflows.
It offers automated systems for routine tasks and features various task views, custom fields, and forms. Unlimited guest users can be invited, with the option to create custom rules and approval processes.
While Asana excels in productivity and collaboration, its core project management functions often rely on external integrations, which might not be preferable for every user. Suited for businesses of all sizes, it's less ideal for freelance professionals.
Despite some users finding its interface too simplistic and its framework somewhat inflexible, Asana shines in task management and team collaboration. For those aligning with Asana's project organization style, it proves to be a highly effective tool.
Key features of Asana project management
- Organize your work into projects: Asana allows you to create projects to manage specific initiatives, tasks, or campaigns. You can break down projects into smaller tasks, assign them to team members, and set deadlines.
- Visualize your work with Kanban boards: Asana offers Kanban boards, which are a visual way to manage tasks. You can drag and drop tasks between columns to represent their progress, such as "To Do," "In Progress," and "Done."
- Track progress with timelines: Asana's Timeline view allows you to see a timeline of your projects, with tasks connected by dependencies. This helps you identify potential roadblocks and plan your work accordingly.
- Communicate and collaborate with team members: Asana provides a central space for team members to collaborate on tasks, share files, and leave comments. You can also use @mentions to notify specific team members.
Asana pricing struture
- Asana's free plan accommodates up to 15 users, offering various task viewing options like lists, calendars, and Kanban boards.
- The Premium plan, at $10.99 per user/month, includes timelines, reporting, custom fields, and automation.
- The Business plan, at $24.99 per user/month when billed annually, adds advanced features like approvals, portfolios, rule builders, workload management, and sophisticated integrations.
Who It's For
- Project teams: Asana provides a centralized space for project teams to collaborate on tasks, track progress, and communicate with each other. It also offers Kanban boards, Gantt charts, and other project management tools.
- Sales teams: Asana can be used to manage leads, track sales pipelines, and collaborate with colleagues on sales activities. It also offers features for generating proposals, contracts, and invoices.
- Marketing teams: Asana can be used to manage marketing campaigns, track marketing metrics, and share marketing content with team members. It also offers features for creating newsletters, social media posts, and landing pages.
- Customer service teams: Asana can be used to manage customer interactions, track customer satisfaction, and collaborate with colleagues on customer support issues. It also offers features for creating knowledge bases, FAQs, and support tickets.
- HR teams: Asana can be used to manage employee onboarding, track employee performance, and collaborate with colleagues on HR tasks. It also offers features for creating employee handbooks, training materials, and performance reviews.
- Creative teams: Asana can be used to manage creative projects, share files, and collaborate on designs. It also offers features for creating mood boards, wireframes, and presentations.
- Technical teams: Asana can be used to manage software development projects, track bug reports, and collaborate on code reviews. It also offers features for creating kanban boards, Gantt charts,
4. Zoho Projects
Zoho Projects emerges as a robust solution from Zoho's suite, aimed at enhancing task tracking, collaboration, bug tracking, and generating insightful reports.
This online project management tool incorporates features such as Gantt charts and the capacity to track billable hours across various projects. It also includes an impressive array of communication tools, like real-time chat and forums.
Some users, however, find the Gantt charts challenging to navigate and report that the reporting feature may not meet the needs of larger teams. Document sharing within the tool is a notable feature.
Key features of Zoho project management
- Task management: Zoho Projects allows you to break down projects into smaller tasks, assign them to team members, and set deadlines. It also provides a variety of task views, including a Kanban board, a Gantt chart, and a list view.
- Issue tracking: Zoho Projects allows you to track and manage issues that arise during the project lifecycle. It provides a variety of issue views, including a priority view, a severity view, and a status view.
- Time tracking: Zoho Projects allows you to track the time you spend on tasks. This can help you identify areas where you can be more efficient and generate accurate timesheets.
- Reporting: Zoho Projects provides a variety of reports that you can use to track progress, identify trends, and measure the success of your projects.
- Communication: Zoho Projects provides a central space for team members to collaborate on tasks, share files, and leave comments.
- Integrations: Zoho Projects integrates with a variety of other tools, including popular productivity apps like Gmail, Slack, and Dropbox.
- Gantt charts: Zoho Projects provides a Gantt chart view that allows you to visualize the dependencies between tasks and track the progress
Asana pricing struture
Asana offers a variety of pricing plans to suit different team sizes and needs. Here is a breakdown of the plans and their pricing:
- Personal Plan (Free)
- Starter Plan ($10.99 per user per month)
- Premium Plan ($24.99 per user per month)
- Business Plan ($30.49 per user per month)
Who It's For
Product development teams: Zoho Projects can be used to manage the entire product development lifecycle, from planning and design to development and testing. It can help teams to track progress, identify and resolve issues, and ensure that projects are completed on time and within budget.
5. Wrike
Wrike, a cloud-based project management platform, streamlines project planning, deadline monitoring, and stakeholder collaboration. It boasts advanced features like task management, Gantt Charts, and a real-time newsfeed. Task prioritization and a variety of integration options enhance its functionality as a comprehensive project management suite.
Despite its array of features, new users may find Wrike's abundance of options overwhelming and its interface somewhat non-intuitive. It suits varied organizational teams such as marketing, software development, and professional services.
Key features of wrike project management
- Kanban Board Wrike's Kanban board allows you to visualize your work in progress and move tasks through the pipeline from left to right, as they are completed.
- Gantt Chart Wrike's Gantt chart allows you to see all of your tasks laid out on a timeline, so you can easily see how they relate to each other.
- Subtasks Wrike allows you to break down large tasks into smaller subtasks, so you can track your progress more easily.
- Custom fields Wrike allows you to add custom fields to your tasks, so you can track additional information that is important to your workflow.
- Templates Wrike offers a variety of pre-built templates that you can use to get started with your projects quickly and easily.
- Third-party integrations Wrike integrates with a variety of other tools, so you can connect it to the rest of your workflow.
- Mobile apps Wrike offers mobile apps for iOS and Android, so you can access your projects and tasks from anywhere.
- Real-time collaboration Wrike is designed for real-time collaboration, so you can work with your team members in real time.
- Reporting Wrike provides a variety of reports that you can use to track your progress and measure the success of your projects.
- Security Wrike is a secure platform that is HIPAA, SOC 2, and ISO 27001 compliant.
Wrike pricing struture
- Wrike offers a free version with basic capabilities for up to five users.
- The paid plans begin at $9.80 per user/month.
- The Business plan, at $24.80 per user/month, includes subtasks, Gantt charts, time-tracking, and workflow features.
Who It's For
- Small businesses
- Mid size businesses
- Large enterprises
6. Monday.com
Monday.com merges an aesthetically pleasing interface with effective project visualization tools, resulting in a straightforward project management application. Its flexibility and transparent organizational style make it a strong choice.
Users can start with project templates and customize their own boards, enjoying various display options like map and calendar views.
However, the absence of recurring tasks is a noted shortfall, and some find the mobile app cumbersome. Despite these drawbacks, Monday.com excels in security, robust functionalities, and customization options.
Key features of Monday.com project management
- Customizable Workflows: Monday.com allows users to create and customize workflows tailored to their specific project management needs.
- Visual Project Tracking: The platform provides a visual interface for tracking project progress, tasks, and timelines, enhancing clarity and collaboration.
- Task Management: Robust task management tools facilitate the organization, assignment, and tracking of tasks throughout the project lifecycle.
- Collaboration Tools: Monday.com fosters team collaboration through features such as real-time communication, file sharing, and collaborative decision-making.
- Automation: Automation features streamline repetitive tasks, reducing manual effort and improving overall workflow efficiency.
- Integrations: The platform offers integrations with a variety of third-party tools, allowing users to connect and sync data with other applications.
Monday pricing struture
- FREE: Wrike's
- Team: $9.80 per user/month
- Business: $24.80 per user/month billed annually
- Enterprise: To receive accurate pricing, contact Wrike directly.
- Pinnacle: To receive accurate pricing, contact Wrike directly
Who It's For
- Project Teams: Teams involved in project management, planning, and execution.
- Marketing Teams: Marketing departments utilize Monday.com for campaign planning, content creation, and task management.
- Sales Teams: Sales teams use the platform for lead tracking, sales pipeline management, and collaboration.
- Development and IT Teams: IT departments and development teams use Monday.com for project tracking, bug resolution, and development workflows.
- HR and Recruitment Teams: Human resources and recruitment teams manage hiring processes, employee onboarding, and HR workflows.
7.Artwork Flow
Artwork Flow is a project management software custom-built for marketing, design, new product development, and regulatory teams to streamline their artwork management workflows. With AI native features such as workflow automation, online proofing, and label compliance, this tool helps brands around the globe hit the shelves faster.
Key features of Artwork Flow
- Workflow automation: Build workflows at scale, tackle complex projects, and fast track approvals.
- Team collaboration: Bring your entire team to the same page with efficient collaboration features such as comments, annotations, markup, and more from a rich proofing toolkit.
- Label compliance: Take proofing to the next level by running automated compliance checks on packaging labels based on rules you customize.
- Integrations: Integrate with monday.com, Figma, Slack, Illustrator, and other tools in your existing tech stack to keep your workflows smooth.
Artwork Flow pricing structure
- Artwork Flow's Free plan accommodates up to 3 users and has limited collaboration features.
- The Professional plan is for creative agencies and growing brands, and is priced at $39 per user per month.
- The Enterprise plan has the most flexible and customizable project management features, and the pricing is shared by the Sales team after initial discovery.
Who is it for?
Artwork Flow is for different departments and team members. Here are some of the main beneficiaries of such a platform:
- Project managers: Managing packaging projects is complex and time-consuming. Artwork Flow's workflow automation feature eases this burden.
- New product development: NPD teams use Artwork Flow to help with packaging innovation and product development.
- Regulatory affairs: Artwork Flow's AI-led label compliance helps regulatory teams streamline compliance with regulatory bodies.
Creative teams: Marketing, copywriters, design teams, and anyone else who works on the more creative aspects of packaging and marketing collateral also benefit from a tool like Artwork Flow.
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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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