We’ve rung in another new year, and I hope for nothing but the best for you, yours, and your business in 2024! On that note, how is your business’s financial strategy for the year looking? If you’re humming and hawing on that one, now is the perfect time to make sure 2024 is a great year for your business! 

I’m excited to take you through the big picture and the nitty-gritty details today. 

Types of Business Financial Goals 

A financial goal can be anything related to money management skills and practices. Going through the year without these long-term and short-term goals could mean a lot of missed opportunities. 

Let’s get specific with some of the common types of financial goals. I bet at least a couple will have you taking notes. 

  • Increase revenue. When was the last time you raised your rates? If it’s been more than a year, it’s time! I get it, raising your rates can be scary. You might be thinking: ‘If I raise my rates I’ll lose some customers.’ In this scenario, you need to ask yourself how do you want your business to be perceived in the world. Do you want to be known for low volume higher quality prices, or the high volume lower prices? Remember this is your business you get to make the rules. I’d suggest starting with a 10% increase, but your goal could vary a little. Getting specific means you can work backwards to outline the actions needed to reach your objective.

  • Reduce operating expenses. The starting point here could be ~5%. Take a good look at your expenses from last year. Where can you make some cuts? Where are you wasting your money and time? There’s always something. Don’t know where to start? The first place to look is your fixed costs—the things your business cannot survive without like rent and utilities. Then move into subscriptions followed by variable expenses (yes this includes payroll). Ask yourself: Are your staff being utilized to their fullest capacity? I challenge you to do an expense analysis like this at the beginning of each quarter to stay on top of your operating expenses.

  • Upgrade your cash flow management! If it were me, I’d definitely start here! Mismanagement of cash flow is a very common issue for businesses. My go-to for this challenge is the Profit First mindset. Using the Profit First cash management system teaches our business to survive on what’s leftover. This mindset says if you can run your business on $1000 you can run it on $990. Set up a Profit account and transfer 1% of each sale into it. If your business can survive without harming the professionalism and integrity of the services offered, congratulations you just took your profit first! More on this in a previous blog.

  • Reduce debt. Most business owners have at least a little debt. That’s very normal! However, the goal should still be to eliminate your debt for good so you can use that money for long-term planning to build your business’s wealth. Keep it top of mind, and if your revenue increases, so can your debt repayments! You can even try implementing the debt snowball method: Start by paying off your smallest debt balances first while continually making the minimum payment on larger debts. Then, as you knock those smaller debts out of the lineup, you can focus more energy on repaying the larger ones until you’re debt-free!

  • Grow your profit margin. Every business has a complex system of expenses vs. revenue. Take a hard look at your business to see where your profit is getting eaten into. Maybe you need to get rid of a product that just isn’t selling. Or, maybe it’s time to adjust your prices for inflation. The greater the margin, the more you’ll have to invest back into the growth of your business. 

Your list may end up looking a little different, but let these items be your starting point. 

How to Achieve Your Financial Goals

Your financial goals deserve to be tackled with energy and focus. Let’s get started: 

  • Identify your objectives. Ask yourself these questions:
      1. What do I want my business to do for me? Am I looking for financial freedom? To be my own boss? To run my own schedule? To leave a legacy? 
      2. What is the big-picture trajectory of my business? Growth? Expansion into a new market? Impact? 
  • Get specific with your goals. Based on your objectives from step one, work backwards to outline the steps you will need to take to reach them. For example, if you’re looking to leave a legacy and make an impact, then it’s probably time to take a look at building a community and growing your reach. This could happen through events, marketing, and partnerships. 
  1. Now that you’ve done all that hard work, make sure you stay accountable and track your progress. You didn’t set these goals just to watch them flop in a few months. Get an accountability buddy, set reminders, and make it happen!  
    • If you want to get ultra-specific, outline benchmarks you’d like to see your business reaching at certain points. This could be split into months, quarters, or years, depending on the goal! 

Pay Yourself 

With all this planning you’ve done you don’t want your compensation as an owner to get left out. If your goal is to run a financially thriving business, then you should thrive financially too. 

Let’s do one last exercise. 

  1. Take a look at your records. How much money did you take from your business last year to support your personal life? 
  2. Did that amount cut it? Were you able to meet all of your personal financial goals? 
  3. What financial goals were you NOT able to reach? It could be anything from college funds for your kids to an incredible vacation in the Bahamas. 
  4. Add the amounts from Step 1 and Step 3 together. That’s what you should be making from your business. 

The job of money in your business is to pay YOU. I’m just sayin’…..

I hope I’ve given you some clarity, steps, and big, exciting goals! If you’ve hit a wall anywhere along the way, I’m here to help. As a financial coach, my expertise (and passion) lies in helping businesses realize their financial goals! Book a meeting with me and let’s make it happen for you!