If 2017 has been a successful year for your business, you’re doubtless feeling confident as you enter into 2018. (Well, as confident as anyone can be when they’re at the mercy of the economy and free-willed customers…). So why not make the most of your strong position by setting some goals for the year ahead? They’ll ensure your business grows from strength to strength rather than coasting along while the competition ‘steps up’ to close the gap on you. After all, having success can alert your rivals to the need to step up their game.
Reaching your financial goals requires the similar kind of diligence your practiced when you were going through the early stages of setting up your company, so clear your schedule and spend a day giving your undivided attention to your business’s finances for 2018.
First, decide what it is you want to achieve this year. For example, you may want:
- increased revenue
- decreased expenses
- larger profit margins
- better cash flow management.
If you find that you want to set all of these goals, consider parking one or two of them for another year, as hoping to do all of the above in twelve months may be a bit of stretch. But, the top two goals (increased revenue and decreased expenses) will probably lead to larger profits (the third goal), so you may be able to set more than one goal without overloading your plate.
Next, you’ll need to break those larger goals into smaller, more manageable ones. Let’s start by assuming you want to make £5,000,000 in revenue during 2018 – which alone is probably a big challenge. Give it some substance by mapping out a number of other goals that help to get to that £5,000,000. This might mean setting specific goals for marketing and customer services tasks to help reach that figure. Each step should show clear progress towards your main, overreaching goal.
Next, think about what can you learn from previous years. Have you ever met the goals you set yourself, and if not, why not? If you have met your goals in the past, is there something you can learn from that too? For example, perhaps you’ve set the bar a little low if you always meet your business’s financial objectives. Or maybe you tried a new marketing technique last year that bore fruit and is worth repeating in 2018.
Be ultra organised
Meeting a financial goal requires discipline and organisation, so don’t leave anything to chance. Use forms that are compatible with your accounting software, or hand over control of your finances to a dedicated in-house accountant or consultant accountant who can take care of it for you. A large part of meeting a goal relies on not going off track in small, recurrent ways, which is why such organisation over everything from your payroll to expenses is important.
Get everyone on board
Your business is bigger than you and, if you’re lucky enough to be working with a team of talented people, ensure they’re on board with your vision for financial success. Set financial goals with your team members (particularly if they’re doing a large part of the day-to-day work where impact on the bottom line is really felt), and decide how you’re going to reach your goal between you. It’s also worth incentivising them to reach the goal: for example, will they receive a bonus if your goal is achieved? What if they surpass it?
This is just the starting point for setting and achieving financial goals in a business. Consider reviewing some example financial goals to see how yours measure up, and ensure you’re monitoring progress throughout the year – you don’t want to get off track.