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Set Sane Financial Goals

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Published: 24Jan2007
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Setting unreasonable financial goals for your business can make you crazy! You may think you are motivating yourself to achieve more by setting your expectations high, but the opposite is often true.

Big businesses have systems and algorithms for projecting their financial goals, and so should you. Yours can be much less sophisticated and complicated and can yield the same result.

When your business is new, setting your goals is kind-of a shot in the dark. Unless you have some data on which to base your projections, you will most likely be estimating. Talk to people in your same industry to find out what they earned in their first years, keeping in mind how your business differs from theirs.

Otherwise, here are some exercises you can do to get a reasonable number. Start by writing down your gross sales for every month for the past 2 years. (You have just created a spreadsheet.) Now go do something else – have lunch, go to a meeting, sleep on it. When you come back to it, look at the numbers.

Your numbers will tell a story. Are there any trends? Is there seasonality to your business? How did you do last year vs year ago? How did you do against previous projections?

Next, add your monthly totals into quarterly totals (Jan – Mar, Apr – Jun, etc.). Look at your numbers again. What's the story? By putting your numbers into quarterly totals, you eliminate most anomalies.

Once you understand these numbers, you should be able to set reasonable, achievable financial goals for your business. Take a look at last year's quarterly and annual totals vs the year before. Is your business growing steadily? This answer will help you finalize your annual number for the coming year.

One more way in which you can use your revenue analysis is to help create your marketing plan for the coming year.

Go back to your spreadsheet. Are there any particularly good months? Investigate why those months were so great. What marketing strategies and/or tactics led to those increased revenues? In addition, how are your sales trending over-all? If you are increasing your sales over time consistently, you are doing something right. What, exactly, are you doing?

The answers to the preceding questions will get you started on your marketing plan. Compare your strategies to see which are most effectively bringing in more sales, and do more of that!

Audrey Burton, Small Business Coach, is “The Tigress”. Get her FREE Special Report, “Closing the Sale is Not Complicated!” and her FREE monthly email newsletter at http://www.TigressCoaching.com .

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