2 Company Leaders Look Back: Financial Planning Highs and Lows

Read this classic blog from our Archives, first published on The BAM Review blog in November 2016 and republished for the Summer Series 2022.


When we have a major decision to make, we often ask those around us for input. Sometimes we follow that advice and other times we don’t. Occasionally we might look back and wish we had followed the advice we received from others. Hindsight is a beautiful thing!

Drawing on the wisdom of others can be helpful and the benefit of hindsight is illuminating. With those two things in mind, we asked a couple of well established BAM leaders for their advice about financial planning. We asked them to share what has been fruitful and has enabled them to grow companies that are doing well. We also asked them to share the lessons they’ve learned the hard way and what they would do differently in hindsight.

Hospitality Company 

Company A is a Hospitality company with 125 employees, it has two owners and was established 12 years ago.

What financial planning have you done to grow your company to the place it is today?

The growth of our company over the past five years has been quite substantial. We have seen our revenue increase 475%, and our earnings grow 540%. Though our financial planning was not the driver of that growth, it was certainly the foundation. Without the steps we have learned and taken over the years, we would not have been able to facilitate the amazing growth we have seen. 

There are three main steps that have laid this successful foundation to get us where we are today: 

Step 1. Years ago we created a chart of accounts (list of revenue and expense categories) and have faithfully tracked all of our income and expenditures. Though not rocket science, this step has enabled us to know at any point and time where we are spending our money, what we are receiving, how our receipts and spending compare to previous years, and how we are doing compared to our budget. Without this, the other two steps would not be possible.

Step 2: For years we have consistently created a budget. After we began to track our revenue and expenses we were able to begin making very educated guesses about future revenue and expenses, in other words, a budget. Having a budget has given us something to work towards, goals to achieve or even exceed. It has enabled us to plan for the future and prepare for the worst. 

Step 3: We have controlled our cash. Tracking our revenue and expenses, as well as creating a budget, has enabled us to maintain appropriate amounts of cash within the company. It has also shown us how and when to wisely spend excess cash. The revenue and expense tracking allows us to know accurately the cash we have on hand, and the budget tells us what is coming and whether we can safely spend cash on large projects or assets.

These basic financial planning steps form the bedrock upon which God has enabled our company to grow.  They do take time, effort and resources to implement – we currently have three staff dedicated to our finance system – but it is an investment that has paid off.

Looking back now at when you started, what do you wish you had done differently in terms of financial planning?

As we look back now, our ‘in hindsight wish list’ with regards to finances and planning is easy to identify. 

We wish we had started our company with more capital. I remember the day clearly. We had created a business plan, drafted a start-up budget, checked it two, even three times, and felt confident that it was accurate. When we presented the plan and budget to a dear friend and experienced businessman, he praised the detail but encouraged us to triple our estimated capital need. Thinking him to be a bit crazy, we politely increased our required capital by about 10-15% only. We were never more wrong during our start-up phase than with that decision. Though the Lord worked and we learned much over the next few years, our lack of sufficient capital on the front end of our BAM start-up caused us to limp along for nearly five years. We had to settle for patchwork progress when we should have been aggressively fixing problems and establishing professional systems and procedures. Doubling or tripling our capital on the front end would have enabled us to grow much more quickly and achieve sustainability and profitability in significantly less time.

From day one we should have poured resources into hiring professional financial talent and creating a professional finance system. Instead, we scraped along for the first few years running an adjusted accrual basis accounting system using personal finance software and my severely limited knowledge of accounting. No wonder we were often wondering where our money went, and why our accounts did not balance at the end of the year! We now have three dedicated staff for our finance system, all of whom understand business accounting and help us to keep very accurate and detailed records. Money as well as professional talent and systems would have saved us years of trial and error.

IT Company

Company B is an IT company with 68 employees, it has two owners and was established 16 years ago.

What financial planning have you done to grow your company to the place it is today?

The saying that “cash is king” couldn’t be more true. Over the last 16 years we have had many times when we were not sure we could make payroll.  To avoid running into such a situation, you need to plan as much as possible and pray for the Lord’s wisdom and provision. We got through the early years when cash was tight, but we still needed to look at our finances closely so that we could grow our company.

When our cash flow became stable, we realized that to grow our company we needed to make sure we had a safety net so that if cash was tight for a short period it wouldn’t put our company in a difficult situation and keep it from growing. Based on this, we approached a like-minded investment company and applied for a line of credit. We did get the line of credit, but in the end, we never needed to use it. However, having the line of credit helped provide the peace and assurance needed as we grew the company. Another benefit of the line of credit was that we had to go through a very thorough due diligence process with the investor. This was good for our company because it forced us to work on our business plan and to look at our financial situation in detail. This entire process significantly helped in our financial planning so we could grow our company.

Looking back now at when you started, what do you wish you had done differently in terms of financial planning?

When we started nearly 16 years ago we just jumped into doing what we do. We didn’t take the time to do a detailed business plan. A key component of the business plan is financial planning. Now my attitude is that planning should not be overlooked or done in an incomplete manner. I say to those who don’t think they’re wired for it or aren’t trained to do financial planning, ‘that’s not an excuse not to take it seriously.’ How financial planning is done or not done could make or break your company. If a company is struggling with financial planning, I encourage them to look for a coach who can walk through it with them and help them better understand this crucial aspect of company start-up.

Understanding what I know now and looking back, I should have definitely thought bigger about our company than I did 16 years back. I had no idea of the potential or how big our company could be. By thinking bigger I would have needed to go through the process of writing a proper business plan and seeking investment. The money is out there, you just need to do your homework and show that your business model has potential both as a business and as a vital ministry.

is a regular contributor for The BAM Review, in conversation with two BAM practitioners.


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