You have a handle on your personal financial goals, but what if you’re an entrepreneur? How you manage your business’ finances may look drastically different from your strategy for personal finances.
Whether you run a one-person show or have an extended team, being able to manage both the day-to-day of your finances as well as see the bigger picture is essential for small business success.
Keep an Eye on Short and Long Term
Beyond managing your daily financial needs, keep an eye to the future, both near and far. Since we’re starting a new year, this is a great time to establish goals for this year. How much do you want to increase revenues? What large expenses do you anticipate, especially as it relates to growing your business?
Beyond this year, consider what you want in the next five or 10 years. Are you planning to sell the business or retire? You’ll need to set goals to put your business in a good financial place to make it appealing to buyers or to pad your retirement nest egg.
Don’t Just Set Goals; Set SMART Goals
Don’t just set it and forget it. Each of your business financial goals should be SMART:
- Specific
- Measurable
- Actionable
- Relevant
- Timely
Rather than saying “we want to increase revenue,” you need to specify how much you want to increase it by, and over what time period: “we want to increase revenue 20% in the next 12 months.”
If you’re specific with your goals, you can then measure results if you take a benchmark of where you are now with your revenue numbers.
For every goal you set, make sure you have a list of action items that will help you achieve it. If you want to increase revenue, you may need to hire another salesperson to help you reach the goal. If you want to reduce debt, you may map out how you will increase what you’re paying on loans or credit cards gradually over coming months.
As far as relevance goes, make sure your goals are in the best interest of your company (and you). If you think that moving from your home office to fancy commercial office space would bring more business but you don’t actually have proof of this (and it will eat up a lot of your overhead), maybe wait until you’ve done some research to back up this hypothesis before pulling the trigger.
Remember: Small Actions Lead to Accomplishing Your Goals
A big goal, like hitting the $500,000 mark in revenue, can be daunting, but remember that every goal is made up of lots of small steps. If you’re just launching your business, make sure you have a separate business checking account to keep your finances apart from your personal accounts. Hire an accountant to file your taxes to ensure you don’t miss any deductions that could reduce what you spend. Reinvest money back into your company to help it grow faster.
Over time, you’ll be amazed at how quickly you can reach your business financial goals if you put a little work toward them every day.
About the Author: Susan Guillory is the President of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, and Cision. Follow her on Twitter @eggmarketing.