With the new financial year kicking in, this is the best time to relook at the classic financial goals that have always helped take businesses forward.
So what should you as a business owner be focusing on?
Micro & Macro Financial Goals-Individuals have personal finance goals that are long & short term in nature and the same goes for companies/businesses. So micro goals focus on short term objectives and macro goals look at long-term business objectives that revolve around aspects like increased revenue, increased margins and cost-cutting.
While you take a relook at the micro & macro-financial goals, just revisit your vision & mission statements. Make sure they are financially specific in nature. Figures just give you and your clients more focus & definition. Of course, generally vision & mission are generic in nature but a hint at how your business will be conducted which can include your financial goals.
Better Grip On Costs: Do your expenses exceed your income..? Negative cash flow causing your business to bleed? Get hold of your costs.How?-By avoiding unproductive production practices like the high cost of shipping/logistics, rentals and even employee salaries that can be a product of excessive headcount. Good control over costs will keep your business floating even when revenue is stagnating. Efficient inventory management also helps balance cash flows to a great extent -expediting receivables against invoices, making payments closer to the due dates. It’s all about cutting costs and controlling cash flow.
Timely Debt Clearance: This is actually a no-brainer but many small & medium businesses ignore debt payments and let interest pile up which then impacts the credit rating of the business.
Consistent Increase In Margins: Profitability is the end goal of any business and this can be done in many ways-increasing prices of product or service which can be difficult with sensitive markets, other options could be-lowering costs by negotiating with suppliers or letting economies of scale take its course.
Another option is flexible hiring-this is being considered by many companies. They’ve been hiring freelancers or contractors who work on project-basis. At the higher level, consultancy is becoming hugely popular.
These financial goals are fairly simple & basic, follow them without batting an eyelid and your balance sheets will be happy & healthy!
