Setting business goals is common practice around the new year. Year-end taxes and closing the annual books offer a perfect chance to assess your financial situation, but there’s really no bad time to do business planning.
Setting and reviewing goals is a great way to motivate and inspire your teams. It pushes you to think bigger, achieve more, and grow your business for the long haul. So if you’re working on a list of business goals to help keep you on track, here are 6 tips to position you for success.
1. Reassess Your Long-Term Vision
Strategic business planning starts with your long-term vision. When you sit down to plan and set goals for the coming quarter or year, allow yourself to dream! Ask yourself:
- How might your business look in the future?
- In what areas do you want to expand?
- How will you continue to challenge/develop yourself and your team?
- How has your vision evolved over the past year?
If you want to expand production or move into new markets, your business needs to shift over time to make that happen. The good news is once you have clear goals, you can create a roadmap for getting there.
2. Reflect on Wins and Lessons
Take time at regular intervals (for instance yearly, quarterly, monthly) to step back and reflect on what worked and what didn’t work across your business. Not only key numbers like revenue, profitability, and net working capital but also:
- People you hired
- New policies or processes
- Customer service
- Marketing strategy
- Digital presence
- Money management (A/R vs A/P)
From there you can celebrate your wins, take away lessons learned, and anticipate future obstacles.
3. Do Your Homework
Year-end is the ideal time to assess your financial status in detail. The P&L statement will show your revenue (total sales), expenses (total costs), and net income (what’s left over after subtracting costs from sales).
But you need to know your numbers on a regular basis, especially if you have big profit goals, you’re buying a lot of equipment or hiring rapidly, or sales are lagging. To stay informed:
- Look at your P&L and other key reports monthly
- Customize your reports to make them more relevant to your business
- Close your books regularly to avoid cash flow problems or other unwelcome surprises
4. Get Ahead on Taxes
While you’re thinking of business goals, don’t forget Uncle Sam. Create a tax prep checklist and start working on it asap:
- Know important deadlines and due dates
- Keep on top of estimated quarterly taxes
- Compile your business income and expenses
- Prepare 1099’s and W2s on time
- Consider potential tax breaks like the employee retention credit, using a business credit card for expenses (you can deduct the interest), charitable donations, and investments like coaching and marketing.
While you’re at it, resolve to keep good records all year long so you’re not scrambling right before next year’s deadline.
5. Have a Budget that Reflects your Business Goals
A budget is more than just a boring spreadsheet – it’s an accountability tool. Having a budget helps you make decisions faster and keeps everyone on the same page throughout the year. Check-in with your budget on a quarterly basis to see if you need to adjust and why.
If your budget is the master plan for money coming and going, think of the chart of accounts (COA) as the backbone that keeps it all organized. A COA breaks your money into categories for budgeting and tax purposes. Set it up the right way and you can track every nuance of our business. It’s like having a pulse on your financial health at all times.
6. Be Flexible with Your Business Goals
If your plans are too stiff, you’ll drop them faster than your New Year’s resolutions. Things change and sometimes even the whole world has to shift. As with your budget, your business goals can be living breathing entities that evolve with your organization.
The key is to measure your progress and adjust as you go. A financial reporting and bookkeeping expert such as a virtual CFO can help you set KPIs and give you access to historical data. Plus provide strategic analysis to show trends and troubleshoot issues.
Whether it’s your first year or your tenth, planning ahead and taking some time to “work on your business, not in your business” will set you up for success in the future.
We’re here to help you with your short-term and long-term goals, and bring your vision for your business to life… contact us.