Setting up financial goals in your business outside of hitting a specific income, revenue, or profit is important for long-term sustainability and growth. You can set up different goals based on how your business is performing or what you need – from reducing expenses and debt to focusing on employee and client retention.
For today, we will focus on the most important financial goals to set for your business this year based on what we’ve seen here at ModVentures:
While we’re focusing on setting goals for the year, you can choose to set goals for the quarter or the upcoming month. Goal setting is a great way to encourage and focus your efforts to achieve a result.
Here are some of the financial goals you and your business can work to achieve:
Cash flow management is a critical aspect of running and maintaining a successful, and financially healthy, business. Cash flow management involves monitoring, analyzing, and optimizing the movement of cash in and out of your business.
Spend some time during goal setting identifying different ways to improve cash flow in your business.
Focusing on reducing your business debt can help you improve your creditworthiness and reduce interest costs. Having less debt also allows you to have greater financial flexibility, which is ideal if you’re planning to make big investments or changes in the next two years.
At ModVentures, we stress the importance of doing market research and industry analysis. By analyzing and keeping up with these two reports, you can find insights into missed needs and potential product or service opportunities.
Industry analysis is just one part of CAS, or Client Advisory Services, a high-touch accounting and business support service.
Yes, your finance department can be running slow and out-of-date. To keep an efficient finance department, it’s important to regularly update and check in on your technology, systems, and accounting programs.
Are you mitigating financial risks in your business? If not, take the year and focus on establishing ways to mitigate against one or all of the different types of financial risks your business can be exposed to.
Financial risks are just one of the many risks that you must prepare for as a business owner to prevent unexpected – and potentially unrecoverable – damages.
Rather than focusing on increasing revenue, work on improving your profit margins. You can look into reducing your production costs, increasing your pricing for certain products or services, and potentially offering high-margin products.
A slow and disorganized finance department is a huge pitfall for successful businesses. Disorganized finances can lead to inaccurate reports and inconsistent cash flow, while an inefficient finance department can cause missing or late invoices, delayed communications, and more.
What financial goal aligns most with your plans for the upcoming year or quarter? Let us know in the comments below.