Whenever a new year rolls around, entrepreneurs have a tendency to think — and dream — big.
Before you set your sights on lofty accomplishments, such as dramatically expanding your business, remember that the energy and excitement you feel in January may be fleeting. “Motivation tends to slump several weeks after the new year has set in,” notes Miranda Reiter, a financial adviser at She & Money Financial Planning.
To stay on track all year, set reasonable goals for your small business’s growth. Here’s how.
1. Document your goals. “Write down your most pressing financial goals,” Reiter suggests. Perhaps you want to pay down debt, start saving, or increase your marketing efforts. Make your goals as specific as possible. For instance, rather than jotting down “pay off debt,” plan to “pay $6,000 of debt by December 2014.” Then put your list of goals in a visible place. “Keeping them top of mind is half the battle,” she says.
2. Set up a game plan. Prioritize your goals by the most urgent, the easiest to achieve, or the most important for your business’s long-term growth. Next, Reiter says, “write the specific plan you have to achieve your goals.” Let’s say you want to bring in more clients in 2014. Note what steps you’ll take each month or each quarter to make this happen. As the year moves along, you’ll have a guide to follow as you work toward the goal.
3. Be aware of market changes. “Take a look at the trends in your industry to see if your future goals are realistic. You [may] need to make adjustments to your business plan to best meet your financial goals,” says Leslie Tayne, founder of Tayne Law Group, which offers financial and debt-management assistance. For example, perhaps you own a restaurant in an area where consumers are eating out fewer times each month than before. If you still want to see sales increase at your eatery, you might need to focus on developing a marketing plan to bring in diners more often.
4. Anticipate what growth will bring. “Consider that if your revenue will be increasing, your expenses are likely to increase as well,” Tayne says. To accommodate an influx in sales, you may need to hire more staff, buy new equipment, or stock up on supplies. Keeping these new expenses in mind will help you set up reasonable goals and expectations for your company.
5. Consider cutting expenses. To free up funds to fuel growth, figure out where you can reduce costs. Look at each line of your profit & loss statement, Tayne suggests. As you go over each item, try to identify areas where you can reduce, or even eliminate, expenses. For instance, ask yourself (or your team) if you’re paying the right amount for outsourced work, such as public relations, web design, or administrative help.