How To Set Financial Goals For Your Business
“Generally people overestimate what they can achieve and underestimate what it takes to achieve a goal, whether it’s a financial goal or any goal for that matter,” says Precious Mvulane, chartered accountant and registered auditor. Mvulane is also the founder and managing director of GAD Consulting Services Inc., a training and management company focusing on entrepreneurs and author of ‘The Essential Finance Handbook’, a financial guide for small business owners.
Guidance and focus
Financial goals help entrepreneurs gain clarity on where they want to go, she says. “It’s [about] defining your destiny in financial terms. In business we only measure success in financial terms, so if you don’t have financial goals for your business, how will you measure your success?”
Examples of typical financial goals small business owners can set for their businesses include increasing revenue and margins or cutting cost within the business.
Some of the expected benefits of having set goals in place for business owners is being able to measure your progress and also helping you to focus your efforts on the results you want to achieve.
Follow Mvulane’s 11 steps for setting financial goals for your business:
Goal-setting principles to practice
1. Write down goals in the present tense and express them in positive words. Brian Tracy says that unwritten goals are not goals at all. They are merely wishes or fantasies.
2. Break down your goals in measurable components, for example, sales to be made per product or service in Rand value and volume in a specific period. It can be daily, weekly, monthly, quarterly, semi-annually and annually. This will help you measure and evaluate the results regularly.
3. Be deadline-driven. By when are you expecting to achieve the goal? What are the key performance indicators that will help you manage yourself and your resources?
4. Be action-driven. Perform at least three daily actions that take you closer to your goals.
5. Take what you have achieved before and multiply it by 10 – dream big!
6. For each financial goal, have a picture in your mind of what that goal looks like to you. Refer to your vision board. Visualise your goals daily to keep your mind focused on what you want. Read your financial goals daily.
7. Share your goals with friends and family, but make sure they are the right quality of people. Choose those who share your passion. You can find them in business associations, chambers of commerce, churches and seminars.
8. Find a mentor who has already achieved goals similar to yours. Follow what they did to achieve similar results. Watch their habits, actions and words, including the books they read. Follow them on social media.
9. Hire a coach to keep you accountable for your actions. If you can’t afford a coach, create a community. Napoleon Hill calls this a ‘Mastermind group’. You cannot achieve massive goals by yourself. If you can it means those goals aren’t big enough or stretching you enough.
10. See yourself as a winner. Believe and trust that you can do this. This can be built up over time. Follow through on the action plans you have set for yourself. If you said, ‘I will make five sales calls within the next hour’, and you do that, you are building up self-confidence and a belief that you can do it. Do what you promised to do. Be your own hero. Finish what you start.
11. Celebrate your achievements daily to keep your spirits high. Be results-driven and focus on the positive. Reward yourself by starting a new habit or hobby.