Financial goals in your business are no different from other goals that you set in your life, be it in your health, your family or your relationship. Just like these other areas of your life, there are times when you achieve exactly what it is that you set out to achieve and other times when you don’t. So what’s the difference that makes the difference?
As with anything in business, passion is a must have. If you are no longer passionate about what you do and why you do it, it’s going to be almost impossible to achieve your financial goals.
If you are already really passionate about what you do, then great! You’re on the right track. If you’re not, then take some time to truly understand what it is that you are passionate about, assess whether it’s viable from a business point of view and whether it will help you achieve your financial goals. If the answer is yes to these points then do that instead as you will be more committed and determined in the long term.
In order to achieve your financial goals, you need clarity, not only about where you want to get too financially but also about where you are now financially in your business.
Set one overriding financial goal for the future, be it to sell your business, to retire or to hand over the business to your successor. Make sure that you know how achieving this goal will allow you to have the lifestyle that you want in the future.
Make sure that all of these goals are set in a S.M.A.R.T  way. Then set a number of smaller milestone goals along the way. These will keep you focused and allow you to check whether you are on track.
Lastly, take a good look at where your business is now. Where is it financially at this exact moment in time? Not in a few months once you’ve done your end of year accounts, as this information is historical. If you want to drive to Bristol, you need to know whether you are starting from London or Edinburgh. It’s the same with financial goals. You need to know where your starting point is to set the course of your business.
Once you have your financial goals clearly defined and you know exactly where you are now financially, you can build up your financial plan/ budget working backwards from where you want to get to. E.g. if you want to get to a yearly profit of £100k in ten years and you are currently making £10k then one way to get there is to increase profits by £10k per year.
Once you have written this plan out, walk away from it, leave it for at least 24 hours and then come back to it with a fresh set of eyes. Does it look realistic? Achievable? Does it stack up? Take it through the S.M.A.R.T criteria again and adjust it if necessary.
4. Take action and monitor progress
Once you have your plan of action, you need to take action. So how much action do you need to take? You need to take as much action as is required to achieve your outcome.
Once you have taken action and are making progress, review your financial position. Where are you now compared to where you started? Where are you compared to your financial goals? Where are you now compared to your financial plan/ budget? If you are on track then great! Keep Going! If not, you either need to take more action or change what you are doing.
Use the financial position of your company as feedback. If what you are doing is not working for you then modify it.
And lastly, keep going until you reach your goal. Your passion, drive and clarity of vision around all of your goals including your financial goals will keep you motivated to achieve what you set out to achieve.
Wishing you every success.
Nathalie Simpson S.M.A.R.T stands for Specific, Measurable, Achievable, Realistic and Time
About the Author: Nathalie Simpson is the Managing Director of Simply Profitable, a business consultancy established to help make finance simple for SME’s and individuals. Simply Profitable helps SME’s and individuals improve their financial position and understand simple finance through its seminars and one on one financial training and consultancy. Get a free copy of “49 ways to increase profits” at www.simplyprofitable.co.uk