A goal is a dream with a deadline, Napoleon Hill once said.
Every small business owner starts with an idea. With your idea, comes with it a purpose or a goal. A goal is a very broad topic. We can have career/professional goals, travel goals, and so on, and for the benefit of this blog, we will focus on the ‘financial goal’ as a Finance Savvy CEO®.
What is a financial goal?
A financial goal is any plan whether you want to achieve something monetarily or manage your cash on hand. Examples of financial goals are: paying off debt and starting up a business.
Setting financial goals is inherent if you are a business owner. You can jot down maybe hundreds of them! Who cares, right? Anyway, it is just a list of financial goals. Acting upon your goal is an important step to reach it but if you set your goal incorrectly, you are doomed even on Step 1. And when I say ‘incorrectly’, you have set the wrong foot in setting your financial goals. And how do you check if you are on the right track of your goals? How do you set goals right, on the correct footing?
How to Set Financial Goals for Your Small Business?
As a smart Finance Savvy CEO®, your financial goal should be SMART too!
Specific
Your goal must be detailed and exact. You can quickly sum them up in a sentence.
What exactly do you want to do? Is it clearly written without any doubt?
Example: I will pay off my debt with creditor A worth $50,000.00 in 10 months.
Measurable
Includes criteria for measuring progress.
How will you track your progress? How will you know when you’ve met your goal?
Example: I will make monthly payments of $5,000.00 for 10 months.
Achievable
Your financial goal needs to be a realistic one. It is not completely out of reach, or too easy for you.
Is this realistic for you? Do you have all the resources needed to achieve the goal?
Example: I can achieve this if I cancel my cable service and delay the purchase of a new vehicle.
Relevant
Your financial goal must be worthwhile. It is something that is actually important to you right now and one of your current focus areas.
Why are you doing this? Is it going to significantly make a difference to your business?
Example: I need to pay off this debt to lessen the payables of my business.
Timely
Your financial goal should be accomplished in a set time frame, such as 2 weeks or maybe in 1 year.
When will you have this completed? Does your goal state a clear and specific completion date?
Example: I will pay off my debt in 10 months.
The above SMART way to set a goal can be used by anybody with a different goal category. But as a small business owner, always remember that you shouldn’t just stop setting your financial goals and leave them waiting to accomplish it alone. You have to do all the work with a financial goal, this will help you assess where you are now, how you are going to do to meet your goal, check if it is realistic enough and must be worth your time and effort, and should make a difference in your life once achieved.
To set your own financial goal, check the accompanying worksheet and use it as a guide in preparing yours. Let this be a step to fulfill your desire as a small business owner and set new goals once achieved.
If you’re ready to start crushing your financial goals, make sure to check out our Finance Savvy CEO community!
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