The Importance Of Merchants In Financial Planning

Financial Planning

Financial planning is essential when running a successful business. It allows for improved cash flow, increased profits, and overall effective money management. There are many things that merchants must do when planning for their business’s future, and many factors that can affect the growth and maintenance of the company. Below, we’ll explore the factors that merchants must consider when taking part in financial management. 

A merchant advance could be an option if you’re looking to grow your business, but your finances won’t cover the cost. They allow businesses to borrow money for anything they need, and it is repaid by a percentage deducted from your future sales – it won’t mean incurring debt either. 

Income and outgoings 

The income and outgoings of a merchant are important when it comes to financial planning. They are the two main factors that have an impact on the revenue of the business. Merchants must be taking more in income through the selling of stock or services than they are having to pay out – businesses should take care that they’re not spending more than they’re selling, as this will mean their outgoings are more than their income, and this could be detrimental to the business. 

Merchants must do everything they can to keep up a steady income and reduce the number of outgoings on things like debt and non-essentials. It is important to weigh these factors up during the financial planning process so that businesses can identify changes they can make and if they need to cut back in certain areas. 


When it comes to setting out a plan for businesses to thrive financially, merchants must disclose debts that they have and are currently paying off. This must be disclosed when taking part in the financial planning process so that companies can work out how much they can afford to put aside each month to meet these repayments and as a way of helping them keep track of interest. Identifying any funds left to pay means that businesses can plan for this and ensure they don’t acquire any more debt on top of their current amount. 


When the merchant has disclosed the income and outgoings of their business, as well as any debt repayments that they must make, they can decide if they would benefit from a loan for the future, to help with growth or advancements – and if their finances would allow for this. Planning can help you to identify if you could manage and benefit from a loan, or if it would be best for your company to avoid taking on more outgoings. 


When it comes to financial planning, the industry that the merchant’s business is in is an important factor to consider. When planning for the upcoming year, any seasonal business or busier periods must be accounted for, for example, Christmas will usually cause sales in retail to rise, and January to February might be quieter times. In restaurants and bars, the weekend may be more profitable, especially over holidays. 

These are all things to think about when planning your finances to help you identify when you should be expecting a rise in profits, when you’re likely to be experiencing a dip – and when you should hold off on you’re spending. 

Customer retention 

Merchants must ensure that they provide high-quality service to customers to allow for regular, stable profits. Businesses must do all they can to keep their customers coming back and increase positive word of mouth so that they can count on a steady income all year round. A steady profit means better cash flow, and a higher approval rate for loans if they should ever be necessary.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.