Why clarity on core foundations makes financial planning stronger for SMBs
- Rachel Vigers
- 13 minutes ago
- 7 min read
For SMBs, strong financial planning doesn’t start with spreadsheets. It starts with clarity on your core foundations. This blog explains the relationship between your foundations & your finances, including why it’s essential to get clear on your foundations before diving into forecasts and financial models.
Running an SMB often feels like you’re building the plane while flying it. Sales targets, recruitment, cash flow, marketing, operations – they all compete for attention. And then, on top of that, there’s the heavy lifting of financial planning and modelling.
For many business owners, the numbers feel like the hardest part. Forecasts that don’t stack up. Models that feel detached from reality. Budgets that never quite match what actually happens. But, in reality, it’s not usually the spreadsheets that are broken. It’s the clarity behind them.
Financial planning only works when it’s anchored in four things every SMB leader should have locked down: Direction, Connection, Impact, and Value – what Rock calls the four core Foundations.
Here's what each one means – and how they make your financial planning not only easier, but far more effective.
1. Direction: Know where you’re going
Without direction, financial models are just guesswork. Sure, visibility is different for every business – some owners struggle to see beyond 12 months. But that doesn’t mean you shouldn’t at least try. Direction means having a clear sense of where your business is heading - over the next 1, 3, or 5 years.
Take a snapshot of the future - where is your business? What does it looks like?
Do you want to have pivoted into something different, or serving a different audience?
To have reshaped your sector or market in some way - if so, how?
To expand into a new region?
Launch a new service line?
Double your team or your revenue?
Or stay small & lean, prioritising hi-touch delivery & higher profit margins?
Your direction is your destination. Whatever path you take to get there needs its own financial plan. Different paths? Different plans.
Why it matters for financial planning:
Revenue projections become real. If your goal is to enter a new market, you can model the costs (marketing, sales, distribution) and likely returns with purpose.
Investment decisions are sharper. You know when to spend and when to hold back, because the spend is tied to a destination.
Cash flow planning improves. Direction tells you when you’ll need more working capital and when you’ll be generating surplus.
Without direction, financial forecasts end up being vague “best guesses”.
With direction, they’re living roadmaps that show you how to fund and fuel your strategic goals.
2. Connection: Build a business people care about
Connection is about how your brand and business relate to customers, employees, and partners. Are you truly in tune with what matters to them? Do people get your business, and more importantly, feel that your business gets them?
Why it matters for financial planning:
Marketing spend is targeted. When you know your audience and how to reach them, you waste less money on scattergun campaigns.
Sales forecasting improves. If you understand how customers connect with your product and why they buy, you can predict conversion rates with more accuracy.
Recruitment and retention costs drop. Businesses with strong connection keep staff longer, reducing churn and saving the constant expense of rehiring.
Financial planning isn’t just about costs and revenues – it’s about understanding what levers influence them. Connection is one of the strongest.
Without connection, you end up throwing money at marketing and recruitment with mixed results.
With connection, every pound invested has a clearer line of sight to return.
3. Impact: Show how you make a difference
Impact is about proof. How does your business actually change things for your customers, your community, or your sector? It’s the results you deliver – not just what you sell.
This is often overlooked in financial planning, but it’s vital.
Why it matters for financial planning:
Pricing becomes stronger. When you can show tangible impact, you can charge for value, not just hours or units. That changes revenue models significantly.
Retention improves. Happy customers who see impact come back, and repeat revenue is the best friend of a financial model.
Funding opportunities increase. Whether it’s investors, banks, or grants, proof of impact makes you a lower-risk, higher-potential bet.
Without impact, your business feels interchangeable – competing only on price.
With impact, you can plan financially around stronger pricing power and recurring income.
4. Value: Be crystal clear on your differentiated offer
Value is the foundation of your business model. It’s not just what you sell, but why it matters, how it’s delivered & what makes it a better alternative to whatever else is out there. SMBs often stumble here because they assume customers “just know” what they’re paying for & sometimes forget that customers do have alternative options to choose from.
Why it matters for financial planning:
Revenue lines are clearer. When your value is well defined, you know which products or services to double down on and which to drop.
Margins are protected. A clear, differentiated value proposition justifies pricing, which can protect against discounting pressure or increase margins.
Scalability can be modelled. If you know exactly what drives value, you can replicate it as you grow – and model how that scales in financial terms.
Without value clarity, financial models are full of uncertainty: pricing pressure, unpredictable sales, unclear margins.
With value clarity, you can project revenues and costs with confidence.
Clarity & cohesion bring confidence
The magic happens when all four foundations – Direction, Connection, Impact, and Value – are reflected in your financial planning.
Budgeting: Instead of trimming costs reactively, you budget proactively around the strategy you’ve set.
Forecasting: Revenue projections are linked to realistic customer behaviour, not wishful thinking.
Scenario planning: You can test different growth paths (new market, new service, increased pricing) with a solid sense of how each affects impact and value.
Decision-making: Investments in people, tech, or marketing are no longer gambles. They’re calculated moves tied back to a clear direction.
For example...
Imagine two SMBs of similar size.
Business A has no real clarity in their foundations. They say they want to “disrupt their market” (without having a clear idea how or being able to articulate why disruption is even needed). They forecast revenue growth at “about 20% next year” (without really understanding how they’re going to achieve it or what the related costs of sales will be). They use a template to create a smart looking website & create a logo in Canva (without considering a differentiated positioning or messaging). Then jump into hiring a new salesperson, and boosting ad spend. Six months later, cash flow is tight, they’re losing customers faster than attracting new ones, margins are down and morale is shaky.
Business B has clarity. Their Direction is to become an industry-award-winning firm with national reach, including setting up their systems for scale, expanding their territory & doubling recurring revenue in three years. Their Connection involves changing their focus to ambitious owner-managed SMEs looking for professional standards, clear guidance & practical advisory services. Their Impact is twofold – firstly, showing how they give those clients ownership of their operations management, including making substantial savings on overheads and, secondly, creating apprenticeship opportunities to raise standards across their industry. Their Value is a combination of results & social responsibility that appeals to their target audience.
Business B builds a financial model around these foundations, including structuring & targeting services, as well as their team, processes & operations to fit. The numbers aren’t just random. They’re connected to strategy. So when they decide to hire, or spend on marketing, or increase prices, the model shows exactly how it plays out.
Guess which business the bank wants to lend to?
Or which one an investor wants to a part of?
Which is more likely to attract interest from a potential buyer later down the line?
Clearly, the one that paid attention to its foundations first (as opposed to the one that tried to balance its numbers on quicksand). It all makes sense.
Want some feedback on your own foundations? Book a GRIT Session now, complete the prep-sheet & we'll tell you exactly what we think...
Scrolled straight to the sum-up? Here it is...
In short, when you know where you’re going, who you serve, what difference you make, and what you’re really offering, your financial models stop being intimidating guesswork. They become practical, confident tools to help you achieve strategic goals.
Not by coincidence, that’s also when financial planning stops feeling like a struggle – and starts feeling like a superpower.
Want help with your Foundations?
This is the work Rock.Partners lives for. Whatever your business stage or sector, we've got a range of flexible strategic solutions that we can customise to fit.
Drop us a line at info@rock.partners or book a GRIT Session now.
Want help with your Financials?
We have partners for that too – including Macleod Accounting who started off as one of our clients, went through the process themselves, saw the transformation it made to their own business & now refer us to their clients.
Alex Macleod, Owner & Director of Macleod Accounting, says
“Having worked with Rock.Partners on our own business, we really appreciate the value of their approach. We’ve had no hesitation in recommending several of our clients since &, as a bonus, the clarity they end up with makes it easier for us to help them to Get Money Sorted too.”
So, that's a wrap. Basically, if you want your business to stay stronger for longer, trying being more intentional & joined up instead of chopping & changing or getting pulled in a dozen different directions. In other words, Be More Rock!
About us:
Led by experienced Business & Brand Consultant, Rachel Vigers, Rock.Partners offers SMEs robust, pragmatic strategic solutions so they can better start strong, stay strong, grow strong or exit strong.
That includes:
Foundations Strategy: getting clarity on Direction, Connection, Impact & Value
FAST Foundations strategy sprints & workshops
FIRM Foundations strategy programmes, including research & consultation
Training, Coaching & Mentoring for self-delivered strategic programmes
Alignment Programmes: mentoring, training & programme delivery support across commercial, creative & cultural workflows, partner outsourcing & management
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