Setting Financial Goals for Your Small Business

The thing is, I often chat with small business owners who feel overwhelmed by the numbers in their business and aren’t too clear on how to set financial goals or even track their progress towards them. 

I hope I offer them some comfort when I reassure them that they are not alone! Because while knowing the numbers behind any business is essential, not everyone has a natural affinity for this (although I confess, I love a financial spreadsheet myself!). 

Indeed, many small business owners find themselves in a similar position. However, with a little guidance and some practical tips, it’s pretty easy to learn how to set and achieve financial goals for your business.

Why are financial goals important? How do you set them? How on earth do you track them when finance isn’t your expertise?  

These are the three key questions we’ll look at through this post and by the end, you are bound to have the confidence and tools you need to take control of your business finances and achieve your financial goals. 

So, let’s get going!

Why Set Financial Goals?

There is no doubt setting financial goals is a vital part of managing your small business’s finances. Clear financial goals help you:

  • Stay focused on what’s important: Setting clear goals helps you prioritise your efforts and make informed decisions about where to allocate your resources.
  • Measure progress: Without goals, it’s difficult to know whether you’re making progress or not. Keeping an eye on your goals helps you track your progress and make adjustments along the way.
  • Motivate yourself and your team: Goals give you something to strive for and can help keep you and your team motivated and engaged in your work.

How to Set Financial Goals

Setting financial goals can seem daunting, but it doesn’t have to be. Here are some steps you can take to set achievable financial goals for your small business:

  • Define your business objectives: Before you can set financial goals, you need to know what you are trying to achieve with your business. Are you trying to grow your revenue, increase your profit margins, or reduce your expenses? Take some time to reflect on your business objectives and write them down.
  • Set SMART goals: SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. When setting financial goals, make sure they meet these criteria. For example, instead of setting a vague goal like “increase revenue,” set a specific goal like “increase revenue by 10% in the next quarter.”
  • Break down your goals into smaller milestones: It’s easier to achieve big goals when you break them down into smaller, more manageable milestones. For example, if your goal is to increase revenue by 10% in the next quarter, set monthly revenue targets that add up to 10% growth over the quarter.
  • Communicate your goals with your team: Make sure your team understands your financial goals and how they fit into the bigger picture. When everyone is on the same page, you start working together towards a common goal.

Tips for Tracking Your Progress

Once you’ve set your financial goals, it’s always worthwhile tracking your progress towards achieving them. Here are some tips for tracking your progress:

  • Use a dashboard: A dashboard is a visual representation of your business’s key metrics, such as revenue, expenses, and profit margins. Use a dashboard to track your progress towards your financial goals in real-time.
  • Review your financial statements regularly: Your financial statements, such as your balance sheet, income statement, and cash flow statement, provide a snapshot of your business’s financial health. Review them regularly to ensure you’re on track towards your goals.
  • Identify and address any obstacles: If you’re not making progress towards your financial goals, identify the obstacles holding you back and develop a plan to overcome them.
  • Celebrate your successes: When you achieve a financial goal, take the time to celebrate your success with your team. Celebrating successes can help keep you, and your team, motivated and engaged in your work.

Setting financial goals shouldn’t be the stuff of nightmares. Put some of these tips into practice, and with a little determination and perseverance, you can successfully manage your small business’s finances and achieve the financial goals you’ve set for yourself.

You can also find out more about the numbers in your business at our YouTube Channel – Your Money Matters, or get in touch, book a free coaching call and let’s see if we can make the numbers add up for you and your business. 

Martin Baillie is a Business Coach and Growth Specialist at ActionCOACH Bury St Edmunds, committed to working with business owners to create sustainable, viable, profitable entities within the local community, and creating 1000 new jobs in the East Anglian region through that growth. 

If you are looking to increase the profit in your business while freeing up time, and having a better work / life balance, there is no better time to start than now. Our business growth methodology is tried and tested, and we guarantee your results.

Contact Martin Baillie, ActionCOACH Bury St Edmunds now on Tel: 01284 334099. You can also follow him on LinkedIn , Instagram and Facebook