How to Set the Financial Goals that Grow Your Business
How to Set the Financial Goals that Grow Your Business
How can you make sure your business
is in the 10% that succeeds?
Setting realistic, buildable goals
is one of the most important ways to ensure you don’t fail.
Here, we’re telling you the four
main financial goals you need to set in order to grow your business. We’ll also
talk about how to set them so they’re in line with your resources and overall
mission.
1.
Profitability
Of course, you want to make money.
To do that, you need to bring in more than you’re spending.
To make sure your goals for
profitability are in line with your business phase, look at your revenue
sources and break down how much you expect to earn from each specific source.
Then, take a look at everything that
contributes to your operating costs: things like taxes, payroll,
transportation, and rent. Then, set some realistic goals – and make sure your
time frame makes sense, too.
In this stage, even small errors can
cause serious issues. It’s not the time to make random estimates yourself –
it’s the time to rely on professional services.
2.
Set The Proper Cash Flow Goals
Here, you’ll need to determine what
amount of money you need every month (or even every week) to keep your doors
open.
Figure out how you’ll cover your
most basic expenses, and remember that things can change fast based on the
season. Also take into account issues like slowed payments, which can mean
you’ll need to make adjustments in your schedule to keep your cash flow smooth.
It’s a good idea to set aside some
extra funds now, so these setbacks don’t affect you in the future.
3.
Make Sure Your Goals Build Off Each Other
You should see each goal as a
stepping stone to achieving your next one. Ask yourself how your goals are
related to each other?
Break down larger goals into smaller
steps. Not only is this a more manageable way to do business, it will also
allow you to evaluate the effectiveness of your strategies and make adjustments
as needed.
4.
Goals For Expansion
Of course, expansion is a huge part
of any business growth plan! But if you bite off more than you can chew too
early, your business can, and likely will, fail.
Evaluate if you want to expand
quickly, or more methodically. Then, ask yourself the amount of outside funding
you’ll need in order to do so.
Can you contribute any of your sales
revenue towards your expansion plan, or not?
If you’re going with outside
funding, make sure you’ve really researched your options before deciding on a
specific financial plan.
Your
Small Business Or Startup Is Ready To Grow
Setting attainable, flexible, and
methodical goals as early in your business as possible is the best way to make
sure you succeed in your industry.
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