At this time of year, many businesses experience that familiar “crunch time,” where setting clear expectations for the upcoming year becomes critical to building a successful roadmap. Have you started your planning yet? Are you a new business owner struggling to determine how to structure your financial goals for 2019?
Whether personal or business-related, financial goals are essential. From saving to investing, finance revolves around setting clear objectives and working strategically to achieve them. Financial goals support both short-term needs and long-term ambitions, yet many business owners are unsure what those goals should look like. Below are some fundamental financial goals that can help improve your financial stability and business success in 2019.
1. Big Picture Vs. Details
This comes down to macro and micro planning. Both perspectives are essential when creating a solid financial strategy, and goals should be set for each. These goals help clarify direction, reduce confusion, and keep your business aligned.
Micro goals are typically short-term and focus on daily or monthly operations. Macro goals, on the other hand, support long-term objectives such as increasing revenue, improving margins, and reducing overall costs. These goals should align with your mission statement and guide your business toward its long-term vision. For example, if your mission is to “deliver quality paper products to every household,” your financial planning should directly support that outcome.
2. Control Your Costs
One area where business owners have direct financial control is operating costs. When expenses exceed revenue, the business experiences negative cash flow. The goal should always be to minimize unnecessary spending and maintain positive cash flow.
A strong habit for business owners is consistently reviewing expenses and identifying opportunities to reduce them. Depending on your business model, this could include evaluating inefficient production practices, high shipping costs, rental expenses, or staffing costs. Regular cost analysis can significantly improve financial performance.
3. Debt Servicing
If your business has taken out Business Loans, managing debt responsibly is essential. All debt must be serviced on time, whether monthly, quarterly, or annually. Allowing interest to accumulate on unpaid balances can quickly lead to serious financial challenges.
Just like personal credit, failing to service business debt on time can negatively affect your business credit profile. Maintaining good standing is critical, especially if you plan to apply for future Business Loans, as it directly impacts approval chances and interest rates.
4. Manage Cash Flow
One of the most important goals of your business should be to properly manage your cash flow. For newer business owners, this may be confused with “profit”, but they are quite different. Cash flow is entirely about the amount of money coming into your business versus what is leaving your business in terms of payments. If your business is bringing in more money than it is leaving, you are termed “cash flow positive”. When you are buying and managing inventory, paying suppliers, and paying employee salaries, these are examples of money leaving your business. Ensure that the proper procedures and inventory management systems are in place to help control your cash flow.
5. Increasing Your Margin
Once cash flow is under control, the next goal is improving profitability. Increasing margins can be achieved by adjusting pricing—after carefully reviewing market conditions and competitor pricing—or by negotiating better terms with suppliers.
Finding even small efficiencies can have a significant long-term impact on profitability. Consistently reviewing margins allows businesses to grow sustainably without unnecessary financial strain.
Unsecured Finances has over 10 years of experience in the consulting business. We specialize in educating and assisting clients in acquiring Unsecured Business Loans and Start-Up Business Specialty Loans, including Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit ranging from $10,000 to $500,000 without assets.
Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584
