As the end of the year begins to approach, it is a perfect time to start evaluating what you’ve accomplished this year and where you want to go next financially in your business. Taking a step back and analyzing where you currently stand is a great way to set financial goals for the future both in the short-term and long-term.
Setting small business financial goals is important because it allows you to filter your daily, monthly, and yearly money decisions through the lens of your goals in order to meet them. It also helps you prioritize your spending in a way that will best serve your business.
How to Begin Setting Financial Goals
1. Write down your goals. Putting them down on paper (or digitally) becomes like an unofficial contract and helps keep those goals in front of you. In the same way, making a to-do list can help people more easily achieve their daily tasks, the same can be said for writing down your goals. Your written goals can take many forms — for instance, maybe you start with high-level goals and break them down from there, or perhaps you start with small milestones and work your way up.
2. Create measurable goals. It’s difficult to evaluate whether or not you are meeting your goals if you don’t have a way to measure and track your progress. This can look like setting timelines, meeting deadlines, hitting a certain amount of revenue/sales/engagement in a specific time frame, etc.
3. Make your goals specific. Instead of something vague such as “we want to increase sales in 2023,” drill down to the details. How much do you want to increase sales? Does that look like a specific number of sales or a percentage? And how will you measure those sales?
4. Keep an eye on your budget. You can’t set financial goals without knowing how much money you’re able to spend and when. By regularly monitoring your budget, you may find areas where you need to adjust in order to make your financial goals possible — or you may find you need to adjust your goals to align with your budget. Whichever it may be, be sure not to make too many adjustments for small things that may impact your ability to spend or invest in the long term.
5. Make both short- and long-term goals. Both types of financial goals are incredibly important for business success. Short-term goals allow you to make more immediate decisions and hit milestones that will impact your business in the next one to five years. Long-term goals allow you to look five to 10 years out or more, and at the end of the day, they should line up with your short-term goals and create a path for you to get there.
Building a Strategy
Once you’ve laid out your small business financial goals, the next step is developing a strategy that includes clear, actionable steps. These steps will be even more drilled down and lay out specific instructions and metrics for meeting your goals. No strategy is one-size-fits-all for any business, but it should help you make your way towards accomplishing each goal as it was set. At Republic Bank, our team specializes in helping small businesses keep their financial strategy strong and make looking to the future easily. To learn more, reach out to us at 800-526-9127 and see our news library for more tips!