Oftentimes business owners do not separate personal finance and their business finance, as a result, drag-out money from the business for personal issues, and sometimes vice versa— sacrifice with personal for the sake of business. In a perfect world, one should have two plans: a personal finance plan for oneself, and a business plan for the business. Thus, you are to have two monitors for tracking of finance successiveness from different points of view.

Which plan to make in the first instance? I would recommend a personal finance plan as long as it is going to define parameters for a business plan (what profit, how soon and how often is to be driven out of business asset aim of finance plan, what risk on business if allowable, in what assets apart from business it is worth to invest a capital and so on.). How to make a personal finance plan and to define parameters for the business plan with the help of it?

A personal finance plan is kind of a business plan for a family and one person, a tool aligning existing needs (finance goals) of a person and/or his family with those finance opportunities he already has, including with the help of choosing those financial products, which fit him including business.  

There are no standards of making a personal finance plan existing but ideally, a full complex personal finance plan should include the following principle stages:

· Finance goals analysis: Yet to find what one is to achieve for a lifetime, besides the most specifically: time limits, costs, currency, and priority. For example, to build a house, to buy a real estate by the sea, to pay the children education, to provide oneself with a passive income by pension or earlier. The prices can be different but it is highly important to digitalize them according to deadline, costs, currency and priority. A goal can be here — to run a business of one`s own. Then you need to calculate capital contributions amount, terms of the investments year-wise in order to know to which period what amount of money is going to be needed, and to find a source of its financing within a finance plan.

· All sources of income and expenditure analysis. A difference between income and expenditure is defined at this stage, which you are going to be able to direct to finance aims described above. Moreover, the task of this stage is to analyze incomes of all the existing sources (including business), expenditures for everything, including business, in order to define delta, directed onto personal goals. Following the results of this plan, you are going to understand what a delta should be like in order to reach your goals and you take it as a parameter for a business plan (for delta you need to calculate all the expenses on business even if they are carried out on behalf of an individual but not LLC).

• Assets and liabilities analysis: All the property, savings, a person`s investment portfolio are analyzed on this stage, let alone all the credits and other debts.  Thus, assets are valued from the perspective of saleability, income/risk ratio and cost-effectiveness compared to inflation, diversification on currency and along the country. Business is one of the assets. If a credit was taken for purchasing or another financing of this or that asset, expenses for the credit will be taken into account while calculating of this asset cost-effectiveness. All the credits connected with business even if those are customers, taken on individuals, should be taken into consideration at a value of the business cost-effectiveness. If the business profit making is lower than inflation is and other tools of investment with less or similar risk, but requiring less engagement, answer a question whether you need such a business after all. If yes, sort it out in details in order to improve profitability. If a business makes 100% of all assets or close, there is a risk for a personal finance plan to be all-downhill in business if worst comes to the worst. Analyzing liabilities, look at the cost of raised money, on loan disbursements and credits return and from monthly income, on a currency of loan floating-rate note and fixed interest rates. Assess a risk of high debt ratio (credits take 30-40% of monthly income), excessively high borrowing costs, a risk of growing payments for credits (due to rate`s growth, currency and so on). Therefore, analyzing liabilities separately we value all the credits and loans of a family no matter whether they were issued on family members or business, for full credit exposure esteem on a person and his family in relation to gross income  (from business and not only) and all the assets costs.
• Stress tests and market analysis: Financial soundness of the person to different risks is analyzed on this stage (damage or loss of property, loss of labour capacity, loss of income or its dramatic reduction, the risk of a trick, penalty, risk of longevity and others). What is the person going to act like in case of one or all risks to happen? Perhaps s/he might go and sell all or a part of assets in order to close gaps for emergency expenses? Is there a risk to lose a part or all the assets? It is impermissible for any event to lead to emergent and big withdrawal from business: risk coverage has to be executed necessarily. In addition, one should protect the business in case of fraud and fine.
• Conveying a set of tools for finance goals achievement: Cash flow forecast is made until the rest days of a person on this stage taking into account finance goals, the opportunity of their achievement is analyzed, and ultimate finance solution is developed for every goal achievement. In addition, if summarizing the results of a finance plan the goals are beyond grasp, changing the parameters of business might be a way out. Improving the profitability including on the account of searching the ways to decrease expenses (credit optimization, search for more energy-intensive and powerful equipment, reconsideration of suppliers and so on.), initial investment amount or their deferred payment.

Well, the second stage is making a detailed business plan for a business with no other assets. Other target parameters but not your financial goals as achievement are to be in this plan, which is going to follow from a personal finance plan: plans on a certain cash flow per month, on credit exposure, on general profitability and risk, on protection in case of fraud or fine. You are going to need to make a business plan with the same step as your personal finance plan (for example, monthly for the first three years, then by year), so the plans were comparative and easy to monitor.

After a personal finance plan and a business plan are made, a person is set in motion. However, the morning sun never lasts a day, the situation within a family changes, so does a situation in the world, along with that a personal finance plan let alone a business plan require readjustments. Accordingly, each is to be revised on a regular basis, but no less than once a year, it is preferable to do it more often though, quarterly the least. A general rule is as follows: the more often changes happen, the more often a plan is revised, which is why in hard times readjust once a month or two.

About the author: Melisa Marzett is 27 young blogger and a writer with a strong passion for writing. She usually hangs out on Facebook, Twitter, Gravatar and Google+ where her articles are available for viewing for everyone wishing to attend. If you want to become a writer, she will be delighted to help or if you need a paper to be written, she can be helpful there too and is currently working for getessayeditor.com.