Do you feel like your money is the victim of this economy? If you have difficulty keeping up with your expenses you probably have the feeling that there’s nothing you can do to get control of your money and your business. This article provides 5 tips to help the business owner get control of spending before it bleeds the business into failure by doing financial planning.

1: Plan Before You Start: The reason potential entrepreneurs are encouraged to create a business plan is so they will plan their business before starting it. If you resist developing your business plan, you might need to reevaluate your real desires to be in business at all. This is the way to take a look at all aspects of you business and see how you will function from management to financial aspects.

2: Do Your Pro-Formas: Financial statements that provide estimated information on money that has not yet been spent in your business are called pro-forma statements. These statements give your best estimate of how you will budget and spend your money as well as how you plan to earn an income from your money. Creating a pro-forma statement is similar to develop a spending budget for your personal means. Take the process one step at a time in order to see where you plan to go financially.

3: Create the Profit and Loss Statement: A Profit and loss statement or P & L details where you plan to get income in your business and how you plan to spend it. The P & L lets you identify areas that can often be a surprise in your business spending and cause you to have some unnecessary business bleeding. For instance, businesses have several types of taxes that must be paid in the year, particularly if you hire employees. You will also identify expenditures for insurance, licenses and other business areas that are necessary to stay in business. This keeps you from having to pull money from private sources or facing empty bank accounts when payments are due.

4: Do the Cash Flow Statement: A cash flow statement is exactly what it says. It is an estimate of how cash will flow through the business on a monthly basis. Sometimes, it might seem like you have a windfall of money in the bank. But a cash flow statement will let you see when a big payment will be due. Instead of spending that apparent large amount of money, you will know to set it aside in order to have something for later. Spending too much money too soon is a sure way to bleed the business the death.

5: Develop Your Balance Sheet: A balance sheet lets you see the balance between what the business owns as assets and what the business owes in liabilities. The offset to liabilities is the equity that is in the business and owned by you. Assets are items that are of value. It can be cash or other items that can be liquidated or turned into cash very quickly, or assets such as property, vehicles and other large items. Liabilities are the debts you have to pay back. These might be short term or long term debts such as a loan you took out to buy your business. Seeing what you own and owe gives you a balance on how to spend more money or not.

You can get control of your business when you do the financial planning for your business. Avoid surprises that could be fatal to your business by being confronted with unexpected expenses and debts. Financial planning will keep you business healthy and let you maintain control of your money matters.

Consuelo Meux, Ph.D., is the Founder and President of the National Association of Christian Women in Business (NACWIB). Get instant access to a Business Plan Template and information on The Business and Marketing Strategies Home Study Program at http://www.cwibnews.com