Financial goals can make or break your business: Here’s how to set them
When it comes to running or owning a business, there are many different factors to consider and be aware of or make decisions on. One of the most important elements of this is your business’s financial situation, as without it your business could cease to exist. In 2022 a staggering 48.4% of businesses failed, some of which will no doubt have been down to poor financial goal setting. So, to avoid becoming a statistic, and instead ensure that your business grows, and runs smoothly it is extremely important to construct a solid set of financial goals. Here are a few examples of how to set them.
Set your financial goals as specifically as possible
When it comes to setting financial goals, there is little to no point in setting out vague end goals to achieve as this will not give you, or your business any direction to go in or aim for. For example, rather than setting out a goal of “increase profits”, you should instead research what is achievable for your business and set a more specific goal such as “increase yearly profits by 10%”. This way you have a much more specific financial goal to aim for, giving you direction and purpose in a majority of your business decisions.
Include achievable milestones
In any financial goal that you set, and to help your business reach them, you should include achievable milestones along the way. By doing this you not only make the end goal seem less daunting, but these smaller more achievable steps can even lead to exceeding your original goal due to the boost in morale.
Create budgets and track your spending
When setting your financial goal, creating a budget and tracking your outgoings along with any expenses is a crucial part. Without these guidelines or information about where your money is going, you can very quickly find yourself in a problematic financial situation that may lead to debt, having to borrow extra money or even bankruptcy. So, to avoid this, ensure that you calculate how much money you can spend and invest within your business, and what it is actually being spent on.
Stay on top of your finances
Staying on top, and in control of your financial situation is paramount to the future success of your business. Therefore it is something that you will need to implement into your financial goal-setting strategy. If you do not pay attention to your finances, or act accordingly with reasonable speed, then you, like many other businesses, may find yourself in debt. Because of this, you must make sure that you are regularly analysing your current situation, and proactively dealing with any problems that start to arise. These problems can range from the company overspending due to unforeseen circumstances, to customers and clients not paying you their invoices on time. An example of a simple solution to the latter would be hiring out the use of a debt collection agency to help you recover any outstanding money that is owed to you by your customers and clients. Often there is a reason for somebody not paying, so hiring the help of professionals can not only reduce the stress of taking on such a task but also bring around a much more likely success rate of recovering the unpaid invoice costs.
To make sure that your business has the highest chance of success, make sure to take this information into account.