As a small business owner, you may have gotten your start by wanting to provide a better product or service than what was commercially available at the time. While such a drive can be a significant contributing factor to your professional success and growth, there is something else that you can do that can also help in the same manner: setting achievable financial goals for your business.
Setting these goals benefits you in two tangible ways. First, it hones your ability to handle and organize your company’s financials. This trains you to have the skills and expertise necessary to keep a business afloat, something that many other business owners often neglect in their passion to provide their service or product.
Second, it helps you prepare for the future growth and success of your business. Armed with the skills you’ll develop as you reach your goals, you will be better equipped to handle the additional stress and workload that comes with a growing business. You will also be savvier when it comes to handling the big financial decisions for your company, such as deciding on whether to move your operations to a larger and more expensive location or to bring expensive talent on board rather than simply outsourcing.
With that said, here are some examples of achievable financial goals for your business to help you get started on this particular venture.
Keeping your business expenses and overhead costs down is a great financial goal to start with. Many small businesses end up closing their doors simply because their owners belatedly find out that it wasn’t enough to have a large number of sales every day to stay afloat. Rather, they did not properly manage their cost of operations and therefore couldn’t make the investments necessary to profitably grow their business.
There are many ways to reduce your overhead costs. Some examples include limiting the use of your office supplies, as well as allowing your employees to telecommute where applicable. One particular way that we want to point out, however, is the usage of technology to automate the many tedious and labor-intensive tasks in your business. In the case of accounting and inventory tracking, an enterprise planning solution (ERP) like SAP Business One is a great asset to rely on.
SAP Business One is a legitimate business management software suite from enterprise developer company SAP SE, except it’s designed for small-to-medium businesses rather than larger enterprises. This means that it’s not only built from the ground up to take care of your specific business needs, but it is also within your budget. By integrating such a solution into your business infrastructure, you will be able to save a significant amount of resources by not having to hire the extensive manpower needed to handle the tedious tasks mentioned above.
Increasing your revenue or cash inflow
Another obvious financial goal that you can set for your business is to increase the inflow of cash to your business. This is different from increasing sales, as such a figure only accounts for the number of units sold and not necessarily the money that the combined sales bring in. By focusing on increasing revenue, you force yourself to examine your business for any new opportunities to gain additional revenue.
For example, you may discover that you are pricing your goods and services too low when compared to your competitors. Sensibly adjusting your prices can increase your revenue while still helping you remain an attractive choice in your current industry. Examining your services or staff may also help you come up with a new type of service or product that you can offer without substantially adding to your costs.
Decreasing debt to external parties
Being a small business owner, you may also have had to take out loans to get your business up and running. This is normal and generally expected in the world of business. With that said, you should make it a financial goal to pay off as much of your debt as possible, as quickly as your finances practicably allow. Doing so keeps you grounded and limits your liabilities. What’s more, it also teaches you the habit of not being too comfortable with having an outstanding debt. This can motivate you to work even harder and manage your financials better.
Being more aware of your business’s cash flow
Last but not least, you should also aim to be more aware of just how much money flows in and out of your business every day. While it may seem arduous, it is necessary to understand since it gives you the information you need to plan out your business’s finances in advance. Such information will aid you in making the right financial decisions for your business. For example, by knowing just how much money you need to have to cover next month’s overhead expenses, you can look at your current revenue and see if you are in a good position to invest in a new hire or if you need to buckle down and start cutting costs.
Setting achievable financial goals is a great business practice to live by
As a business owner, you have a responsibility to yourself as well as your employees to learn how to run your own business sustainably and profitably. Otherwise, you risk letting all your hard work go to waste, while also disappointing those who depend on you for their financial stability. Consider setting the above achievable financial goals for your business and start adopting the skills necessary to keep your business not only afloat, but on the right path to growth and success.
Finally, if you are looking for a trusted ERP provider in the Philippines, then you should look no further than ANSI Information Systems. We are the premier authority in ERP, POS, and other business solutions in the country, having helped consumer giants such as Chowking, Greenwich, Red Ribbon, and Nissan to improve their business operations with our unique brand of service. What’s more, we are recognized by SAP SE as a verified Gold Partner, with SAP Business One as one of our most popular offerings. Get in touch with us and see the difference we can make for you.