Running a business is extremely time consuming. With so many tasks demanding your attention, it’s easy to get lost in the day to day and lose site of the big picture. But setting aside the time to set your financial goals is imperative to success. This post will outline some ways to help you create effective financial goals.
Document your goals
The more specific they are, the better your performance will be. A good guideline to follow is setting SMART goals. SMART stands for specific, measurable, achievable, relevant, and time-bound. By following the SMART guide, you can develop a more clarified vision of your goals and focus your time and resources more productively. Having all of your goals documented will ultimately help you stay on track and avoid hitting any slumps.
Writing your goals down will also help you review them and improve upon them as you go.
Once you know what your goals are, put together a game plan. Your goals may be focused on achieving numerical objectives (such as a specific profit margin) or tangible objectives (such as buying new technology), but regardless of how you categorize them your goals should be specific enough that you can tell whether or not they have been achieved.
However, if you dont have a plan as to how to achieve your goals, it doesn’t matter how specific they are. You can prioritize your goals on a number of criteria:
- long term growth
Write down all the steps you will take to make your goals happen. Prioritizing will help you put your actions into context and make decisions with the bigger picture in mind.
Know your market
Determine if your goals are realistic by looking at the trends in your industry. Is your industry growing? Shrinking? Stagnant? This information will help you know if you need to prepare for hard times, or expect to grow.
What are your competitors doing? If you’re having trouble setting clear goals, researching your competition is a great way to get ideas. In addition, having a general understanding of your competitors can provide you with an opportunity to learn how they have succeeded or what they have done to make themselves worse off.
Set long term and short term goals
You need both short and long term goals in order to reach your overall objectives. Setting long term goals can serve as milestones, and short term goals can be daily tasks, monthly goals, or quarterly objectives to guide you toward the long term ones. The two work in tandem, and by accomplishing your short term goals, you are steps closer to achieving your long term goals.
Check out our free ebook A Business Guide to: Analytics, KPI’s & Dashboards to learn more about setting goals and using metrics to increase performance.