Lesson 13. Planning financial goals

Anchor scripture:

• Luke 14:28: Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?

Specific learning objectives. As a result of this session, participants will be able to:

• Apply financial planning for the growth of the business. • Involve key stakeholders who can contribute to your financial goals.

Financial planning - Knowing how much to spend

The financial plan is a way to avoid running out of money, by looking ahead. It is important to consider the various stakeholders who can help you reach your financial goals.

How to make a financial plan

Begin by considering three factors • Goal – this is wat you want to achieve • Task – this is what you need to do to get to the goal • Resources – this is what you will need to achieve the goal

Example: Goal: Open a new market for milk vendor • What tasks must be done? • What are the necessary resources? • Who will be responsible?

By when Tasks Resources Person responsible

Purpose of following a financial plan

• Helps figure out how much money (capital) you need to start, and keep your business running until it makes money. • Helps you see how much cash you will have left each week or month. • Help you figure out how much money you can safely take out of your business without drying out your business. • Help you involve the right people who can help you reach your goals.

Should you plan in months or weeks?

Planning in months is better for businesses like growing bananas or fattening animals that takes longer time. Planning in weeks might be better for businesses like shops or selling vegetables where the time between the start of the business until it’s profitable is shorter. What to do if your financial plan shows you cannot meet this goal? • Reduce expenses • Take out less money for household use • Invest more of your own money • Take up a bigger loan from the bank • Increase sales by marketing the business • Find a new business idea to increase income

GOAL

Advantages of following a financial plan

• It will set out clearly the money that you need to put together to start the business and to run it for a period. • It will prevent you from going into a business that will not be a success. (illustrate with a stop sign on a plan) • It will point out where your business might need extra financial help, and it will help you to obtain a loan from a bank if you need it. • It will show when you are holding too much stock or whether your collection is less than it should be or that you will be short of cash at a particular time. • It will inspire confidence in lenders and banks that you may need to approach for finance.

ROLE PLAY

Ask the participants to pair with one other person or a group of 3. Give them a few minutes to identify one of their goals. What is the goal? When do they want to accomplish it? What tasks will help them accomplish it? What resources will they need? And who will be responsible for each task?