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The three plans every company needs

27. októbra 2026

The three plans every company needs

Eight years ago a friend called me. It was the 28th of the month and he needed to know whether he could make payroll.

He had a company that was growing. He had clients, orders, invoices already issued. And still he sat over his account, counting whether there would be enough left for wages.

I gave him one sentence back then, and luckily it did not kill him: „You do not have a money problem. You do not have a plan.“

It took me years to understand that sentence on myself. I had a company that was growing, and at one point I realised I did not know what a single customer cost me, or how many months I would last if something broke. I had plenty of work and no plan. That is not a failure of strategy. That is a failure of order.

And then I worked out that one plan is not enough. You need three. Each with a different owner, a different horizon and a different cadence. When they get mixed together, the company stops moving – and nobody knows why.

Why three and not one

Three plans answer three questions that cannot be compared. And they get mixed up exactly when a company writes them as one document.

The business plan a company writes for its bank answers the question „will we convince the lender?“ The strategic plan answers „where are we going and what will we not do?“ The financial plan answers „what are we living on?“ The operational plan answers „how does it happen every week?“

This needs saying honestly: the professional literature usually divides plans into business, strategic and operational, and in it the financial plan is mostly part of the business plan, not a separate category. So I am not following the received taxonomy. I claim something different, and more practical: the financial plan has to live its own life, because it is updated at a different frequency than the strategic one. When it is a chapter in a document you open once a year, it gets updated once a year. And at today’s speed of change that is far too little.

And one more thing that needs saying out loud: there is also a second way of dividing plans, by time. Strategic for three to five years, tactical for one to three, operational for a week. That is a different axis and it does not contradict mine. I divide by subject, not by horizon. A company needs both axes, but mixing them into one table is the most common reason why nobody uses the plan.

The strategic plan: why the most important thing to say is what we will not do

A strategic plan answers three things: where the company is going, what makes it different, and – the most underrated of the three – what it will not do.

That last one is in practice the hardest and the most valuable. I had a client who was doing five things at once and not one of them well. When we wrote down on paper what he would not do, within two months his margin went up. Not because he added something. Because he stopped wasting.

Horizon: the literature says three to five years, for a smaller company practically one to three. It is updated once a year, or when the market changes.

Who makes it: the owner or the management. Nobody else can make it, because these are decisions about what the company does not do.

The typical mistake: the plan is never formulated, because the company „has it in its head“. And in the head means one person has it. When that person gets ill, the company has no direction.

The financial plan: why profit is not the same thing as cash

Here we come back to that friend and to the 28th day of the month.

A company can be profitable on paper and have nothing for payroll at the same time. And it is one of the most common ways a small company ends. This is not theory, it is mechanics: the customer pays in sixty days, you pay VAT and contributions on a different date, wages at the end of the month. The profit is on paper, the money is not in the account.

That is why a financial plan has to have cash flow by month, not by year. A yearly total will not tell you that in March you will have nothing for wages.

What it should contain: a revenue plan, a cost plan, a profit and loss statement, a balance sheet, cash flow by month, the break-even point, margins, scenarios and a reserve.

Who makes it: the owner together with the accountant or the finance person.

It is updated continuously, ideally monthly. A so-called rolling forecast, meaning you shift a twelve to eighteen month outlook forward by one month every month.

The typical mistake: confusing profit with cash flow. And the second one: the plan is never compared with reality, so nobody knows where it went off.

The operational plan: why even the best strategy loses without it

The operational or marketing plan answers how the whole thing happens every week: specific activities, campaigns, channels, owners, deadlines, milestones and metrics.

A strategy without a weekly plan is just a wish with a nice headline. Horizon: a week to a quarter, typically within the annual plan.

It is updated weekly or monthly, and that is its whole point. It is the only one of the three documents that moves as often as reality does.

The typical mistake: a list of tasks with no link to the strategic plan. Then a lot of things get done that are urgent and have nothing to do with where the company is going.

The break-even point: the one number that connects strategy to weekly work

The break-even point is the one number that translates „how much we want to make“ into „how much we have to sell“. And that is why it is the thing most often missing from a marketing plan.

The formula in revenue:

Break-even point = fixed costs ÷ contribution margin

where contribution margin = (price per unit – variable cost per unit) ÷ price per unit.

The U.S. Small Business Administration directly recommends adding roughly 10% on top for unforeseen expenses.

An example: fixed costs of 20,000 euros a year, contribution margin 40%. Break-even = 20,000 ÷ 0.40 = 50,000 euros in revenue. The company has to sell at least that much in a year just to avoid a loss.

And the same formula in units: fixed costs of 4,500 euros a month, a service price of 300 euros, variable costs of 120 euros. Then 4,500 ÷ (300 – 120) = 25 orders a month.

For marketing that means one specific question nobody asks: how many leads does my channel have to bring in for 25 of them to become orders? At 20% conversion that is 125 leads. At 5% it is 500. That is the number that belongs in the operational plan. Not „we will increase the budget by 20%“.

Gross margin and runway: two numbers that keep a company alive

Without the first you do not know whether you can cover your overhead. Without the second you do not know how long you last when something breaks.

Gross margin:

Gross margin (%) = (revenue - direct costs of selling or delivering the service) ÷ revenue × 100

Direct costs are material, subcontracting and the direct human input on an order. Not overhead, not management salaries. In a service company this also includes the time of the person who actually delivers the order – which is why the name is broader than „cost of goods sold“.

One thing that gets confused in practice all the time: gross margin and contribution margin are not the same. Gross margin is calculated from revenue and tells you what is left after direct costs. Contribution margin is calculated per unit and tells you how much each additional order brings towards covering fixed costs. At the break-even point you work with the second one.

An example: an order for 2,000 euros, material and subcontracting 1,200 euros. Gross margin = (2,000 – 1,200) ÷ 2,000 = 40%. Out of every euro of revenue, 40 cents stay to cover overhead and profit.

Runway:

Runway (months) = available cash ÷ net monthly cash burn

An example: 18,000 euros in the account, monthly costs 9,000, monthly income 6,000. Net burn is 3,000 euros a month, runway = 6 months.

And here is the point of that number: if income drops by 2,000 euros, runway shortens to 3.6 months. Not because something broke. Only because the company was on the edge and nobody knew.

For Slovak companies the recommendation is to hold a reserve of at least three months of operating costs, more if you are seasonal or dependent on a few large clients.

Why the tax licence (daňová licencia) is the best Slovak argument for a financial plan

This is the thing Slovak sources on finance do not mention and sources on tax do not connect to cash flow. A company at a loss, which earned nothing, still has an obligation to pay tax. And without a reserve, that is an unplanned expense.

The minimum tax for a limited liability company (s.r.o.) applies even at a loss:

Taxable revenue of an s.r.o. Minimum tax 2026
up to 50,000 € 340 €
50,000 – 250,000 € 960 €
250,000 – 500,000 € 1,920 €
500,000 – 5,000,000 € 3,840 €
over 5,000,000 € 11,520 €

But watch out for one exception that a lot of people miss: a newly formed company does not pay the minimum tax for its first tax period in which the obligation to file a tax return arises for it for the first time. The exception does not apply to the legal successor of a company dissolved without liquidation. So not every s.r.o. at a loss pays automatically – but every one of them has to count on it in its plan.

I see a trick in this that a lot of owners do not realise: when things are going well, tax is an item you pay out of what came in. When things are not going well, it is an item you pay out of the reserve. And if you have no reserve, it is the expense that kills the plan.

Three more Slovak numbers that belong in the financial plan:

Contributions for a self-employed person (SZČO) from 1 January 2026: the standard minimum social insurance for a compulsorily insured self-employed person is 303.11 euros a month and the minimum health insurance advance is generally 121.92 euros – together 425.03 euros. Social contributions begin on the first day of the sixth calendar month after the trade (živnosť) is established. So the fixed cost exists before the first customer arrives.

But that sum is not universal. From 1 July 2026 a so-called micro-contribution applies. A self-employed person whose income for the previous year exceeded 2,876.90 euros but was not higher than 9,144 euros, and also a starting entrepreneur after the end of the contribution holiday, pays social insurance from a special assessment base of 396.24 euros – which means 131.34 euros a month. On the health insurance side there can be further exceptions. That is another reason why an entrepreneur has to build financial planning on his or her actual obligations, not on a universal table found on the internet.

Flat-rate expenses for a self-employed person (paušálne výdavky) are 60% of income, capped at 20,000 euros a year, if you are not a VAT payer for the whole year. You hit the ceiling at income of around 33,333 euros. And importantly: the flat rate is a tax matter, not a substitute for a financial plan.

VAT (DPH): when turnover exceeds 50,000 euros in a calendar year, an obligation arises to file a registration application, but the entrepreneur generally becomes a payer only from 1 January of the following year. On reaching 62,500 euros during the year, the person becomes a payer on the day of supply on which the threshold was crossed – the application has to be filed within the statutory deadline. Turnover is something the entrepreneur tracks himself. For a growing company that means drawing the VAT threshold into the plan as a milestone, not as a surprise.

How many companies actually have a plan

Fewer than you would expect. But an exact number on written plans in Slovakia does not exist, and that is a finding in itself.

Gallup, in fieldwork from 20 September to 28 October 2024 (a sample of 11,891 working adults, of which 3,589 were business owners), found that 12% of owners have no plan at all for the next five years. The rest want to grow (44%), keep their size (30%), sell or hand over (14%), or close (8%).

Careful when reading those numbers: respondents could select more than one option, so the percentages do not add up to 100%. And Gallup is not measuring written plans – it measures the owner’s idea of what will happen to the company. The original research is available at news.gallup.com.

And the figures about „33% of companies with a formal plan“ that circulate on the internet cannot be traced to a primary source. They exist only through aggregators with unclear methodology, which is why I do not use them.

The share of small companies with a written business plan in Slovakia: not traceable in a credible primary source. I would rather write it like this than quote a number that cannot be verified.

Two statistics you should not use

Both circulate in the Slovak and Czech environment. Neither of them holds up.

„82% of companies fail because of bad cash flow.“ That number appears in dozens of texts, usually with a reference to „U.S. Bank“ and „a study by Jessie Hagen“. There is no primary source – no year, no methodology, no access to the original study. It is a classic zombie statistic: a number that gets quoted because everybody else quotes it.

The old CB Insights numbers: „38% of companies ran out of money“, „35% had no need on the market“, „42% no market need“. Those have been replaced. The current edition (a cohort of 431 VC-backed companies closed since 2023, 385 with an identifiable reason) reports: ran out of capital 70%, weak product-market fit 43%, bad timing 29%, unsustainable unit economics 19%.

And the key finding that CB Insights itself emphasises: „ran out of capital“ is almost always the last cause of death, not the root of the problem. That is precisely the argument for a financial plan. Cash is a symptom, not a diagnosis.

One limitation that needs saying out loud: this is a sample of venture-capital-backed companies, not a representative sample of small Slovak firms. But the mechanism it describes applies everywhere – the last drop is rarely the cause.

Why companies really fail

They survive for less time than you think. A good financial plan helps you spot problems before they show up in the bank account.

The American BLS measures the survival of establishments by age. Of the cohort formed in 1994, 79.6% survived one year and 49.6% survived five years.

Two caveats I have to state, otherwise I would be lying: the BLS measures establishments, meaning operating locations, not companies, and it cannot distinguish bankruptcy from a closing or a merger. So it is not „90% of companies go bankrupt“. It is „half of all establishments disappear within five years“.

Slovakia had a historic turning point in 2025. According to FinStat’s updated online statistics, 43,244 trades were established and 64,338 ceased. A net balance of minus 21,094, the first year since 2016 in which more trades ceased than were established. For comparison: in 2020 it was plus 11,413, in 2024 only roughly plus 2,300. FinStat’s original analysis from January 2026 worked with preliminary figures (over 42,000 established, more than 66,000 ceased), so it is the same reality at a different point in time.

Careful here too: FinStat links the rise in closures mainly to legislative and consolidation measures and to audits of so-called fictitious trades. A trade ceasing is not the same thing as a bankruptcy.

So what do you do with this on Monday morning

Three documents, three cadences, three owners. That is the whole thing.

The strategic plan is one A4 with an annual update. Write down where you are going, what makes you different and what you will not do. If that third thing is missing, it is not a strategy, it is a wish.

The financial plan is cash flow by month with a monthly update. Three numbers you have to know by the end of this week: gross margin, break-even point and runway.

The operational plan is updated weekly. Work out from the break-even point how many leads and orders the channel has to bring. That is the only link between strategy and Monday’s work.

And one thing I wish I had known sooner: when you have nobody to consult the plan with, and most owners of companies with up to twenty people do not, that is fine. A plan is not about discussion. It is about sitting down once a month and comparing what you thought with what happened. One person can do that over one coffee.

That friend from the phone call did it. A year later he told me the biggest change was not in the numbers, but in the fact that he stopped doing things that brought him nothing. At the time I did not yet know that I would have to do the same thing myself.

I went three years without a plan myself. It was not missing because I did not know how to work. It was missing because I thought I had no time for it. It turned out that without it I was wasting that time twice over.

Frequently asked questions

Is a business plan for the bank not enough?
No. A plan for the bank has one job, to convince the lender. The strategic plan has a job that is almost the opposite: to tell you what not to do. They are two documents with two different readers.

How often should I update the plan?
Strategic once a year, financial monthly, operational weekly. If you update all of them equally often, one of those numbers is definitely wrong.

Do I need a financial plan when I have an accountant?
Yes. An accountant tells you what happened. A plan tells you what will happen. That is not the same thing, and neither of them will do it for you.

How do I start when I have no time?
Start with one number, the break-even point. Add up your fixed costs and your contribution margin. It takes an hour, and it is the only number that immediately changes how you make marketing decisions.

Does this apply to a one-person company too?
It applies more. A one-person company has no reserve of people and no reserve of time. There, runway is literally the entrepreneur’s living space.

Which of those three plans do you have? Write to me. The answer I get most often is: not the financial one.

Sources

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