A financial strategy can solve many issues and it starts by setting measurable financial goals. The right goals can help an owner break down their financial metrics and highlight areas to cut costs and increase revenue.
Setting financial business goals and then achieving them are two very different things, whether it’s setting a marketing budget, investing in a mastermind course, or setting a sales target for your product or service, the best place to start is with a plan.
1. Make a Plan
Your chances of increasing your financial goals are much higher when they are written, this should be the first step when developing a plan and it is much better to start with an annual goal.
The next step should involve developing your plan into actionable steps, you should take time to drill down and figure out what needs to get done and how to get it done. This means calculating how many products you need to sell over a period of time or how many clients you need to take on, to reach that annual goal.
The more specific you are with your goals, the more likely you will be to make them a reality. Set goals that are measurable, achievable, and have an end in sight. You can further break down the annual goal into quarterly financial goals.
The more specific you are with your goals, the more likely you will be to make them a reality. Set goals that are measurable, achievable, and have an end in sight. You can further break down the annual goal into quarterly financial goals
2. Start budgeting:
Another important thing to do to achieve your financial goals is to budget. You might make so much money but might still be financially unstable before the end of a month due to bad money management.
This is probably because you don’t budget and this should change. Plan your finances by creating a budget and sticking to it each month in the new year.
This would help you manage your finances well and control your spending better.
3. Increase Your Knowledge of Finance
If finances aren’t your forte, learning it should be a priority for you, this your knowledge of finances should include learning how to develop simple and actionable goals that would help you become more familiar with how finances work. And that knowledge can go a long way. For example, what are some expenses that your business faces each month? Utilities, merchandise, payroll, rent?
Set a goal to find out what they are and develop a way to decrease their cost over time. It’s an easy goal to set, easier still to measure, and gives very clear results.
These sort of goals highlight challenges and provide a plan to improve upon them. And even if you’re not well-versed in financial theory, you’re using your finances to improve your business.
4. Strategize Your Efforts
The financial goal for your business should be to find a way to increase your revenue, or decrease your expenses, to pay off the outstanding debt. Turn your attention to developing better money habits for your business, invest in your business wisely, build up cash reserves for emergencies and being aware of exactly how you are spending money each month.
Another way to improve your profits, without increasing sales, is to improve your profit margins. You can do this by reducing your cost of production or raising the price of your product or services.
5. Find an Accountability Partner
No matter how big the financial goal is or how daunting it may seem to reach it, don’t do it alone. Sharing your financial goals and your timeline with a friend, business partner, or a financial advisor creates accountability.
Try to check in at least monthly with your partner. This person can help you achieve your goals faster by keeping you motivated and even referring some of your products or services. Think of business goals as steps toward achieving larger (long-term) goals.
Every long-term goal should have smaller goals or steps along the way. As an example, if your long-term goal is to make a million Naira in the next five years with your business that translates to N200K annually. Further broken down, N50k each quarter. What steps do you need to take for your business to make N50k per quarter?
Your accountability partner can provide you great advices, so you work towards these smaller steps.
Smart money habits can go a lot farther than meeting that initial financial goal. They can help you increase your sales by keeping you on a timeline to finish what you have documented or keep pace with your production of a new product. Ultimately, having financial goals sets your business up for success.