Writing a Business Plan, Part 3: Finances

So you have your SWOT Analysis and your Values & Goals for your Business Plan, it’s time to get those finances planned out! 

Financial History

First, let’s pull in what you’ve made in past 2 years if you’ve been in business already or have been doing this as a hobby. 

List out the year, the gross dollar amount you brought in (not your cut, but what money that came into the business/hobby itself), and then break it down, if you can, by how many of each service/product you sold. 

Here’s what this looked like for me when I wrote this out for the first time in 2016:

2014-    $3,000
2 weddings (1 at huge discount for cousin) 
            31 portrait sessions (8 free or trade sessions)                                        

2015-    $4,000             
2 Weddings 
            33 portrait sessions  (5 free or trade sessions)

Expenses and spending goals

Start by doing a cost of business analysis. Make a list of:

-License fees
-Insurance
-Business subscriptions
-Rent and utilities
-Transportation
-Necessary equipment expenses

This is your cost of doing business, and you need to know what you have to bring in just to function in order to know what your financial goals need to be. 

Next, write out other expenses you would like to have such as:

Next list out your purchase options, and divide them between top priority and low priority. Do you NEED new equipment or just want new equipment. Have a class you want to take that will be a game changer? List those. 

And finally list out the income you want to bring home that year.

Once you have your expenses lined out, set goals for the future year (or rest of the calendar year) with what you need to bring in at a minimum to stay afloat, your target, and your ideal/pie-in-the-sky goals. List quantities of your services/products needed to reach that goal. Take your income goal and divide by 4 for quarterly goals, and by 12 for monthly goals.

Like this: 

MINIMUM
$15,000, 5 Weddings, 10 Portrait Sessions. Breaks down to 1 shoot a month.
$3,750 per quarter. $1,250 per month. 

TARGET
$25,000, 8 weddings, 20 portrait sessions, 2 shoot a month
$6,250 per quarter. $2083 per month. 

IDEAL/PIE IN THE SKY
$40,000, 12 weddings, 30 portrait sessions, 3 shoots a month
$10,000 per quarter. $3,333 per month. 

Whew! That was a lot, I know! But it’s important and now you have all the pieces you need to put your business plan together! Come back next week to get the final piece!

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