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Financial plans: Part I 12 min read

Financial plans: Part I – Why it’s important to align business with personal 

As a business owner, planning for your business' finances often gets personal – highlighting the value of a financial partner that considers both.

Whether we’re talking about your business or your personal life, setting yourself up for success comes down to good planning. What’s more, as a business owner you know your personal and business finances aren’t mutually exclusive.  


While a financial plan is an essential part of your business plan, a personal financial plan is also crucial to setting yourself up for a life of comfort and security. In this first blog article of our two-part series on financial plans, we sit down with CWB experts from business banking and personal banking to pick their brains on what the financial planning process looks like for business owners – and how working with one financial partner can effectively connect all the dots in your portfolio.


In part two, we’ll chat with team members of CWB Wealth Management about how wealth planning for business owners layers into all this – and who else should round out the crew of dedicated experts in your corner.


First off, some “Coles Notes “on terminology


Regardless of business or personal, a financial plan should answer essential questions about where you’re going, how you’re going to get there, and how you’ll track your progress.


A business financial plan applies your current business financials as well as projections for growth. It helps inform your short and long-term financial goals and determine whether you’re on course to achieve them. A business financial plan is also helpful when it comes to investors because it shows you’ve given careful thought and consideration to how you’re running your business, and what you’ll do if you run into trouble.


A personal financial plan factors your current personal financials into goal planning and regularly monitors where you’re at. Of course, in this case, those goals are for things like nearer-term big purchases (e.g. buying a house) and longer-term life events (e.g. retirement).



A strong financial partner considers the full picture

Simply consider that a business owner pays themselves from their business and it’s clear that a business financial plan impacts a personal financial plan (and vice versa) – and the two shouldn’t be developed in isolation. 


“Where CWB really stands out is that we have team members from personal banking, business banking, and wealth management who can each look at a business owner’s full portfolio and apply their respective expertise,” says Ian Collopy, AVP, Business Development, who’s based out of CWB’s Vancouver banking centre. “And we all talk to each other. We’re not giving advice from a silo – we’re plugged into what’s happening on the personal side that could affect the business side, and vice versa. So what you’ve got is a whole team working for you.”


Neeru Malkani, a Personal Banking Account Manager also in Vancouver, agrees. “How can you effectively suggest strategies for a business owner’s personal banking without having line of sight on the business side? Or the wealth side? You can’t. You need to consider the full picture. That’s why each member of your CWB team comes at it from a different angle to give you that complete perspective.”



Approaching your financial plan: 7 insights for business owners

Collopy and Malkani have a combined 30 plus years of experience playing a role in business owners’ success. They offer this food for thought:


  1. Put in the planning time up front. It’ll save you time – and money. “Business owners are really busy. And what we sometimes see is that, while they may have other elements of their business plan in place, they haven’t really taken the time to put pen to paper on a financial plan and what monitoring it will look like,” says Collopy. He recommends working with your financial partner to do this because you can discuss scenarios and considerations unique to both your business and personal needs.


    Adds Malkani: “As humans we tend to put off doing the things that we think are going to be onerous because we’re usually running short on time. The key is to get started, because your financial plan will save you time and money in the long run. Another reason people might put it off is fear of commitment or the assumption that the plan will be set in stone. But coming in and drawing up a plan with your banker isn’t signing your life away – it’s up to you to decide whether to implement it, or to what extent. So there’s no risk, only the opportunity to help you get you closer to achieving your financial goals.”


  2. It doesn’t have to be complicated. “The best plans are often the simplest – because those are the ones you’ll stick to,” says Collopy. “There are some key fundamentals, some key components you need to have in your plan and the execution of it. These will give you what you need to set reachable goals, know whether you’re ahead or behind, and identify contingency strategies. Your financial partner can support you on this.”


  3. You should have a financial plan for your business and a financial plan for your personal finances – and they need to take each other into consideration. “It’s not unusual to see business owners who have a financial plan for their business, but not a personal financial plan – or they’ve kind of combined their personal plan with their business one. You really need to have two separate plans,” says Malkani. “For example, where’s your working capital coming from? When it comes to liquidity, you don’t want to be continually drawing down on your personal finances to support your business’ financial goals. That said, you do need to recognize that the goals you set for your business financial plan can impact the goals you set for your personal financial plan, and that any changes in one plan can affect the other.”


  4. Align your business goals with your personal goals (and vice versa). “Say you want to retire in X number of years with certain lifestyle expectations, but you also have a goal to grow your business over the next five years – including taking on more debt to help fund that growth,” says Collopy. “Do these two goals contradict each other? Do the timelines make sense? How do you account for both when it comes to the things you’ll need to do to achieve them?”


    Collopy explains that when clients sit down to talk with the team about their financial plans the conversation will include business goals for cash flow, growth, and succession. They’ll also discuss savings targets for life events like retirement, what needs to be liquid, and when.


  5. It pays to bring your business and personal plans under one financial partner: Working with one team offers significant advantages from both a relationship and an efficiency side, says Malkani, adding that at CWB you simply need to start with one point of contact. “If you come to us first for your personal banking we can do a warm handoff to a team member in business banking, and vice versa, as well as bring in a team member from wealth management. And you can be confident there are open lines of communication among all team members,” she says. “We’re all pulling together to develop the most effective and fulsome strategies that are specific to you.”


    Collopy adds there can also be efficiencies at tax time. Approaches for business and personal taxes will impact each other, and your accountant only needs to engage with one financial partner to feed into those strategies. 


  6. Work with a team of experts to help you implement your plans. “You’re not expected to know everything – in fact, we know your focus is on delivering your products or services to your customers and managing your employees,” says Malkani. “That’s where you should assemble and lean on a team of experts like an accountant, lawyer, and financial partner to help you develop, monitor, and take action on your plans.”


  7. Regularly monitor your plans and know the factors that can affect them: Things can change – and they will. Commit to a schedule for evaluating key documents like your monthly financial statements that’ll give you an indication of how you’re doing against your financial plans. And keep an eye on the variables that could throw you off course. “You’ll want to have a pulse on things like interest rates, inflation, supply chain, and fluctuations in the labour market and how those could impact your plans,” says Collopy. “Your financial partner can play a valuable role in keeping an eye on these and advising on contingency plans and actions you may need to take to weather any storms.” (Pro tip: Your business financial plan should include personnel).



Tools and resources


Financial Planning
Cash Flow Calculator
Home Budget Calculator
All Calculators



Key components of a financial plan


Business financial plans

Creating your plan:

  1. Identify your goals and timelines. These could include…
    • Profitability
    • Growth/expansion
    • Succession
  2. Make financial projections based on anticipated expenses and sales forecasts.
  3. Identify your financing needs.
  4. Identify your contingencies.
  5. Monitor your progress regularly (Pro tip: Monthly evaluation of your financial statements is table stakes).


Key inputs:

  • Profit and loss statement
  • Cash flow statement
  • Balance sheet
  • Sales forecast
  • Personnel plan
  • Business ratios and break-even analysis 


Personal financial plans

Creating your plan:

  1. Identify your goals and timelines. These could include…
    • A large purchase (like a house)
    • Emergency fund
    • Retirement
    • Estate planning
  2. Create a monthly budget.
  3. Identify your financing needs.
  4. Have an investment strategy.
  5. Have a tax strategy.
  6. Protect your assets with insurance.
  7. Monitor your progress regularly (Pro tip: Revisit your plan at least once a year to factor in any major life events like divorce, marriage, job change, and any unforeseen liabilities).


Key inputs:

  • Personal financial statement (Pro tip: This should give you a snapshot of your current assets and liabilities).
  • Monthly budget tracking (Pro tip: This should give you an ongoing view of your cash flow vs expenses).