Starting a small business is no walk in the park, especially at a time when the economy is still in the toilet.  In order to secure the funds you need to take off (either in the form of a bank loan or from private investors) you’ll need to formulate a sound business plan.  But if you want to stay in business and watch your company grow, you’re going to have to create some realistic financial goals to work towards.  But how do you go about determining what those goals are?  While you can certainly employ the services of a financial planner or an industry expert to help you gauge the current level of your market, you would really be better served to try to understand the ins and outs of your particular business over time rather than bringing in an outsider to forecast for you.  And here are a few areas you’ll need to track if you want to stay firmly rooted in reality when you create a list of financial goals.

  1. Learn everything.  Become actively involved in following the money market, charting small business trends, and seeing how changes in the global, national, and local economy are affecting your business (directly, indirectly, and over time).  The ability to take seemingly disparate pieces of information and weave them into a tapestry that shows comprehensive causality will be immensely helpful when it comes to planning for your future finances.  So take in as much knowledge as you can by reading magazines, frequenting professional industry websites, and consulting colleagues on forums.
  2. Consider potential goals.  There are many possible financial goals that small business owners may choose to embrace, such as paying off debt, saving for expansion, or even selling for a profit.  Each of these requires due consideration and none should be discarded as an option.  Of course, you are bound to lean towards one or another, but don’t be afraid to embrace a different option should it come your way.
  3. Set time limits.  You’ll probably want to set goals that are both small and large (ranging from paying all your bills this month to breaking even within two years).  Whatever goals you set for your business, it behooves you to set a time limit.  If you know your due date, you are much more likely to put a plan in place that will ensure your goals are met by the deadline.
  4. Budget accordingly.  Every business needs a budget, but it is especially important for small businesses that cannot hold out if their money dries up.  For this reason, you should over-estimate costs and underestimate earnings for the foreseeable future.  If you’re lucky, earnings will exceed your expectations and you’ll end up with a windfall.  But even if you don’t bring home the bacon, this method of forecasting should ensure that you won’t find yourself filing for Chapter 11 just yet.
  5. Evaluate your progress.  Tracking the success of your financial plan is just as crucial for reaching your long-term goals as actually implementing a course of action.  Without analysis to ensure that your tactics are delivering the numbers you need, you might as well be pointing a loaded gun at your foot without first checking to see that the safety is on.

Sarah Danielson writes for Helpdesk where you can find all the best in help desk software solutions on the market today.