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What to Consider When Setting Financial Goals

As a business owner, you’ve probably at least thought about the financial goals that you have for 2020. You may have even written them down. The question is, are these goals really attainable? Goals are great but you want to make sure that all of the goals you’re setting aren’t so big that you can’t reach them within a reasonable time. When you set realistic goals, you have a higher likelihood of achieving them which will help motivate you to achieve more and in turn, you’ll start making progress towards your lofty goals. If you’ve already set your goals, we encourage you to sit down and review them with these things in mind:

Be sure you understand your key numbers.

How many times a year do you sit down and review your profit and loss report or your balance sheet? Many of our clients don’t until their accountant requests it and even then, they just glance at it and don’t really understand what it means. There are some key numbers in your balance sheet that you should consider looking at on a regular basis as they tell a story. Be sure to look at large numbers that stand out. Some of these may be professional development, meetings and conferences, or bank fees. Let’s look at bank fees and how it can tell a story. Let’s say that for the year your bank fees total over $2,000. If these are nonsufficient funds fees, this says that you have a cashflow problem. This is something that needs to be addressed immediately. However, it could also be a fee that your bank charges for online banking or to see your business and personal accounts under one login. It could also include fees that the bank charges you to process payments from your customers. No matter what it includes, it’s important to know what makes up the numbers so you know how healthy your business is. 

Have an in-depth understanding of what generates revenue.

When you’re looking at your business’ income, it’s important to know what makes up that income and what your profit margins and markups are for your services. For instance, if your business has $75,000 in income from social media services and $50,000 in income from video development services, it may seem that social media generates the most revenue and is the service you want to push more. You have to look beyond revenue thought. For example, social media may bring in $75,000 but it may cost you $50,000 to provide those services whereas with video development, it brings in $50,000 in revenue and it only costs you $10,000. Therefore, your profit margin is $15,000, or 46%, more with video services. Taking your profit margin into consideration, you would want to spend more time on marketing and providing video services unless you increased your pricing for social media services. 

Ask for help with whatever you can.

This can be one of the hardest things to do for many. No matter how hard it is, don’t think that you can achieve all of your goals by yourself. Ask for help. For example, if you want to be a speaker at 10 different events this coming year, ask people if they know of any places that you can speak at. This is one of a million ways you can ask someone for help. You just never know what someone else is involved in or who they know and how they can help you. Don’t forget though, it’s important that you give help as well. Be sure to offer up your knowledge and expertise to those who could use it as well. The givers gain is a very real thing so what you put out will come back, good or bad.  

Keep your goals in front of you.

We often get so busy trying to reach our goals that we don’t even remember what they are halfway through the year. Write your goals down and put them on your desk, on the wall, on a whiteboard, in your car, on the bathroom mirror. Wherever you need to put them so that you see them, do it! This will help keep you inspired to take the small steps necessary to achieve them. 

Be aware of your mindset.

No matter how much you understand your numbers, how much help you get or where you write your goals down, you will find yourself having trouble achieving your goals if you don’t have the right mindset. If someone asks you to sit down for coffee and you think it’s going to be a waste of time, do it anyway. You never know what may come of it so be open-minded. Also, be aware of the stories that you have. If you keep telling yourself that you’re not as smart or don’t have enough experience or whatever else you tell yourself to prevent yourself from moving forward, be aware of that and try to work through why you believe those things about yourself. Believe in yourself! 

Start with the end in mind. 

You wouldn’t get in your car and just start driving in hopes that you’ll eventually make it to California. You’d have a plan. You’d look at the map and determine if you want to get there in the shortest amount of time or if you want to take the scenic route and determine your path based on that information. Do the same thing with your goals. Look at exactly where you want to go and then identify the small steps that it will take to lead up to that. Then, focus on those small steps so you don’t get overwhelmed with the big picture. If you’ve written your goals down and don’t know the steps you’re taking, start identifying them now.