As an entrepreneur, having realistic financial goals for your business will help you stay on track with spending and push you towards revenue projections.
Setting financial business goals and then achieving them, however, 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.
Follow these three essential financial goals for entrepreneurs and move from goals in your head to creating a useful plan.
Make a Plan
Once you write the financial goal down you’re more likely to achieve it.
That is the simple part – coming up with the goal itself. Start with an annual goal.
Then it’s time to drill down and figure out how to get it done. That 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 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.
Read More: How to Create Annual + Quarterly Plans
Grab this free template to help you get started with business and financial goals for entrepreneurs.
Strategize Your Efforts
If one of your financial goals is to pay off $3,000 in business credit card debt over the next 12 months, make a plan to increase your monthly payments to $250 per month (and don’t add to the balance). Alternatively, you could transfer the balance to a 0% interest credit card to help pay down the debt faster.
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.
Take a look at the rest of your business budget and find extra money. Skipping the daily Starbucks could save as much as $80 per month. Another option could be to find a way to affiliate with a product and earn some extra cash each month.
Turn your attention to developing better money habits for your business: use credit cards to earn cash back or points but pay them off each month, 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.
Make your money work for you.
Start using cash back savings programs like eBates to order your business supplies. Use business credit cards that earn in categories important for you. Put your money into a high-interest savings account.
Find an Accountability Partner
No matter how big the financial goal is or how daunting it may seem to reach it, don’t go it alone. Sharing your financial goals and your timeline with a friend, business bestie, 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 dollars in the next five years with your business that translates to $200K annually. Further broken down, $50k each quarter. What steps do you need to take for your business to make $50k per quarter?
Your accountability partner can provide you a sounding board as you work towards these smaller steps.
Finally, use an app like Mint or Goodbudget. Here’s a good read on 8 Helpful Finance Apps for Small Business Owners.
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 that digital download you started or keep pace with your production of a new product. Ultimately, having financial goals sets your business up for success.