Set some SMART financial goals for your business in 2017

It’s a New Year, and a new opportunity to inject new energy and enthusiasm into your business by setting some financial goals. It’s easy to dash off a few ideas on the back of an envelope, but we want you take the idea of goal setting a little more seriously. We suggest you spend some quality time creating achievable goals that tie in with the overall strategy of your business.Business goal setting doesn’t need to be complicated, but commitment and focus are required to set the kind of goals that will fire up your team and make a real difference to your results.Setting financial goals? Make sure they’re SMART.SMART goals are :S – specific,M – measurableA – attainable, achievableR – realisticT – time-based, timely,For example, rather than, a goal to simply increase sales, a SMART goal might be to increase sales by 10{89774503f1dc5a8067a215bf11c503ad6eecdd9fbdfb7beae4875fba6258e357} by 31 April.Before you do anything else, review and update your business planAlready got one? Excellent. But business plans are not meant to be set and forget. To keep your business on track use the SMART goals from your business plan to set a 90-day action plan focusing on specific goals.If you don’t have a business plan, I would encourage you to look at completing a One-Page Business Plan. The One-Page Business Plan focuses on the “who, what, where, how and why”:

• Why are you in business? (Purpose/Goal)
• Where to you want to be? (3-5 years time)
• What do you need to do? (Critical numbers/KPI)
• How do you do it? (Action Plan)
• Who is accountable?

Get a handle on your cash flowThe MYOB blog “The Pulse” warns that 60{89774503f1dc5a8067a215bf11c503ad6eecdd9fbdfb7beae4875fba6258e357} of businesses that go bust are still profitable, but ran out of cash¹. Make control of your cash flow one of your 2017 financial goals. Set up some SMART goals around regular, timely invoicing, setting and enforcing clear payment terms and rewarding an active collections department. Together, these measures will all contribute to strong cash inflow. You can also review expenses and cut back on non-essential costs, be active in asking for discounts from suppliers and for deposits on larger jobs.And finally, review your customers for profitability and cull those who are costing you money.If you feel you don’t have time to watch your cash flow, you should delegate this critical task. At the very least, consider training a dedicated employee to keep an eye on daily cash ins and outs and to make sure there is sufficient cash for upcoming transactions (and warn you if there isn’t).[caption id="attachment_4479" align="aligncenter" width="610"]

Make it your business to understand financial reports. Source: Adobe Stock[/caption]Learn how to read and interpret financial reportsEvery business owner should be willing to learn how to read and understand financial reports and concepts. It’s easy to outsource functions like accounting and payroll, but as your business grows, there’s an expectation that you understand your finances enough to make crucial decisions on how you’re running the business.Create some goals around your financial education, attend a course on interpreting financial statements. Learn to read a profit and loss statement, a balance sheet and a cash flow document. Get a grip on basic financial ratios. To stay in control of your thriving business, you’ll need to improve your financial knowledge in line with business growth, or risk becoming poorly informed and vulnerable to poor financial decisions.Financial goals: it’s time for actionFor business owners in early 2017 it’s time to make some promises to yourself and your business. Here’s what we think you should prioritise:

• Make sure you review your business plan at least annually
• Use SMART goals wherever possible, for accountability and realistic targets.
• Develop a 90-day action plan in relation to your business goals.
• If you can control your business cash flow, you are well on the way to business success.
• Don’t leave finance to the accounting department. Learn some financial skills and you’ll find yourself driving and directing your business with increased knowledge and confidence.

Don’t forget, a business advisor can be a valuable resource when you’re setting goals and making plans for the new year. Call RJS Wealth Management on 1300 256 526.Over to youHave you set your goals for 2017? Are you a systematic goal setter or a back of the envelope style?Sources:1. MYOB: The Pulse Blog 2012 – Eight tips on managing your cash flowThis article is published by R J Sanderson and Associates Pty Ltd ABN 71 060 299 783. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision.