Running a small or mid-sized business isn’t easy. Things change fast, and every decision can make a big difference. You may not have a full-time finance team, but you need smart planning to grow. That’s where financial planning becomes key.
It helps you stay in control, avoid surprises, and plan for what’s next. More small businesses now turn to part-time or fractional CFOs. These experts bring fresh ideas without the cost of a full-time hire.
Gemma Doran is one of those experts. She’s a Fractional Portfolio CFO at The CFO Centre UK, a global network of over 750 experienced CFOs. She works with growing businesses, especially in the leisure and hospitality sectors. Gemma has helped companies of all sizes, from new startups to firms making over £100 million.
She focuses on cash flow, planning for growth, and raising funds. Her “targeted realism” approach helps teams aim high but stay practical. She believes good planning starts with clear models, fast updates, and honest teamwork.
In this article, you’ll learn how to build better forecasts, plan around real business drivers, and steady your cash flow. We’ll also look at the right mindset, tools, and habits that make financial planning for SMEs simpler, faster, and more useful in today’s fast-moving world.
Building Forecasts in Financial Planning for SMEs
Many small and mid-sized businesses can’t hire full-time CFOs. But they still need expert financial help. That’s where part-time or fractional CFOs come in. They guide business growth without the high cost of a full-time hire.
One key benefit is that they offer a fresh, outside view. Since they’re not involved daily, they can spot things others miss. This helps them give clear, practical advice that fits the business.
Power BI Aim High but Stay Grounded
A good financial plan should show ambition. But it must also match what the business can do. This balance matters most when talking to investors or setting goals.
The best approach is called targeted realism. It means planning for growth while staying honest about limits. You need to back your numbers with facts. Show why your goals make sense. Don’t just guess, prove it.
Flexible Models in Financial Planning for SMEs
Good forecasts are easy to update. They let you test different “what if” cases. For example, what if sales drop? What if costs rise? To stay useful, the model must:
- Allow quick updates
- Handle different scenarios
- It is simple to explain
This helps you react fast when things change, like rising costs or new rules.
Use Drivers That Reflect the Business
Driver-based budgeting uses real inputs that affect results. These could be product prices, staff hours, or delivery costs. But finance teams can’t guess these alone. You need help from people inside the business.
Talk to warehouse teams, sales staff, or anyone who works with numbers daily. They know what moves things. This also builds trust and helps teams feel involved. In the end, strong forecasting depends on teamwork, good data, and clear goals.
Skills That Strengthen Financial Planning for SMEs
In small and mid-sized businesses, the finance team often wears many hats. Technical skills are useful when building an FP&A function, but mindset matters more.
You need someone who stays calm in fast-changing settings, works without much hand-holding, and keeps things structured.
SKey Traits for Financial Planning for SMEs
- Understand the business: It’s not enough to build good models. They must know what drives the business forward.
- Communicates clearly: They should ask smart questions, explain their numbers, and talk well with all teams.
- Can challenge and explain: Forecasting isn’t about being right. It’s about using logic and questioning assumptions when needed.
- Stays flexible: Plans change. Depending on the situation, forecasts should adjust weekly, monthly, or quarterly.
Make Reports Easy to Understand
Good reports match the audience. If the person reviewing them isn’t from finance, use simple visuals. Show the key numbers, and avoid clutter. Focus on the few things that matter.
You don’t need expensive tools. Many useful models still run on Excel. What matters is the model’s logic, accuracy, and how well it supports decisions.
Turn Numbers Into Insights
Good FP&A goes beyond reports. It tells a story. If costs rise, explain why. Is it harder to get new customers? Is it more costly to keep them? When reports link data to action, people make better choices.
That’s why it helps to build a clear KPI dashboard. Keep it simple, useful, and focused on what decision-makers need most. Strong FP&A is about thinking, staying curious, and making finance useful to the business.
Cash Flow Control in Financial Planning for SMEs
In small and mid-sized businesses, cash flow isn’t something you check once a month. Often, you need to look at it every day. That’s why having a simple, flexible cash flow model is key.
Focus on the Right Drivers
A good model should cover the basics. It must include:
- Sales and purchase figures
- Customer payment terms
- Supplier payment terms
- Any agreed payment plans with tax or service providers
You should be able to update these inputs quickly. The model must adjust fast if something changes. If it takes hours to update, it becomes useless in urgent moments.
Most teams still use Excel. It works well, but only if the inputs are right. Bad data leads to bad results, no matter how fancy the tool is.
Tools Can’t Fix Poor Input
If your data is weak, AI or software won’t solve your cash issues. The tools can show gaps but won’t fill them. Your focus should always be on getting the inputs right.
Model Building Tips for Financial Planning for SMEs
Many teams feel pressure to build fast, especially when funding is needed. But if you rush, you risk errors. Investors will catch these gaps and question your plan.
Take time to:
- Build the model properly
- Gather inputs from across the business
- Test different situations
The more solid your model is, the more useful it becomes. A strong model helps make better choices, builds trust, and avoids last-minute surprises. In short, cash flow control is daily work. However, it becomes much easier to manage with the right model and data.
Staying Agile in Financial Planning for SMEs
In small and mid-sized businesses, change can happen fast. One day, you’re planning for a slowdown, and the next day, there’s a market bounce. To stay ready, your financial model must be simple, flexible, and quick to update.
Build a Model That Adapts Fast
You don’t need complex tools. You need a model that takes minutes, not hours, to adjust. Keep it light. Focus on the core inputs like sales, costs, and payment terms. Avoid adding things that don’t matter daily. A clean, simple model helps you react without stress.
But don’t rush to change things every time the news shifts. Learn to judge which changes matter. Add new scenarios if needed, but don’t rewrite your plan too quickly. Patience matters too.
Logic and Judgment in Financial Planning for SMEs
There’s a science in setting up the model. You follow rules, use formulas, and structure it well. But there’s also an art in knowing which inputs to track, when to update, and what to ignore. Good FP&A work uses both.
What’s Next for FP&A?
The future lies in telling better business stories. Numbers are part of the story, but they’re not enough. You must explain why the business is heading in a certain direction.
Also, start thinking about wider topics like ESG. These things will likely shape business models more in the future.
Final Tips for FP&A Teams:
- Know the business inside out.
- Talk to other teams often.
- Take ownership, even in part-time roles.
- Start with clean, clear data.
- Don’t rush model building.
And if you’re just starting? Learn to work fast and stay calm. A strong base like the ACA can help, too.
Conclusion
Good financial planning for SMEs starts with simple tools, clear thinking, and strong teamwork. You don’t need the latest software. You need a model that’s easy to use and quick to update. That way, when things change, you can act fast without stress.
Always focus on facts, not guesses. Build your model using real numbers from people in your business. Their input makes your plan stronger and more useful. When the data is solid, the results make more sense.
Also, stay flexible. Business needs can shift overnight. Your plan should be ready to change with them. That said, don’t rush to change everything too soon. Think before you act.
The goal isn’t to be perfect. The goal is to build a plan that helps your team make better choices. Good planning brings trust, saves time, and helps spot problems early.
Ultimately, financial planning for SMEs is about keeping things simple, honest, and useful. That’s how you stay ready for whatever comes next.
FAQs
Why does timing matter in SMEs’ financial planning?
Timing helps you plan cash flow better. You avoid shortfalls if you know when money comes in and goes out.
How often should we review our financial planning for SMEs?
You should check your plan monthly. But in busy times, weekly reviews help you catch issues early.
What’s the biggest mistake in SMEs’ financial planning?
Many guess their numbers without checking real data. This leads to plans that don’t match reality.
Can financial planning for SMEs help with tax planning too?
Yes. A good plan shows what you’ll owe and when. This helps avoid last-minute tax stress.
Do we need a CFO to help with SMEs’ financial planning?
Not always. A part-time or fractional CFO can guide you well without the cost of a full-time hire.
