Every business that wants to be successful (and why be in business if that isn't your main aim?) needs to have long-term vision – this is essential to growing a successful business whatever your industry. Even fast-paced, high-tech companies need to know where they will be in 5 years, 10 years time - although their immediate priority may be to get the next, new high-tech product to market within 6 months. Any company that only focuses on immediate priorities is doomed to a short life.
When you have long-term visions then you also need long-term financial plans and objectives - these goals can be easy to make but they are often harder to meet, so how can you make and meet the long-term financial goals your business needs to succeed?
Here's some advice on how to do just that:
1. The People Matter
No one can succeed in business without the right people around them so meeting financial goals means just that – employ the right people and ensure they have every possible opportunity and encouragement to succeed. Get regular updates from them on progress – whether that’s from the sales team, customer-facing staff, accounts department. When employees know that you will be regularly monitoring progress, that is a huge incentive to deliver more. But this is not about applying pressure to succeed (although that can help) but more about the regular interaction that will motivate staff and improve the overall quality of their performance. Good staff producing good work is essential to meet the financial goals that will result in business success.
2. Visual Aids Are Useful
Do you remember those old-fashioned fundraising thermometer boards we used to see outside schools and churches to show how well we were doing fundraising towards the goal of a new roof, or whatever? Of course, they are highly simplistic for a business but they had a strong visual impact so it's worth using the idea of visual impact to help you meet your goals.
You may, for example, have set a business goal to double your sales of product x over the next year. All of your employees should be able to see how well the company is doing towards achieving that goal – not just the sales guys or the finance folk – seeing good progress can motivate everyone and everyone in a company, even in just a small measure, contributes to its success.
So stick up a chart – even an old-fashioned 'fundraising thermometer' style chart – whatever you choose, make it visually impactful, put it where everyone can see it and update it. Simplistic, sure, but it can be a surprisingly motivational tool.
3. Know Your Alternative Funding Options
Companies are often held back from growing and reaching their financial goals by a lack of funding, so make sure you have exhausted every avenue to gain additional funding and investment. Even with a proven business model raising business finance is rarely any easier than getting a business off the ground in the first place, especially if you want to retain full control, which is not usually possible with Venture Capital or Angel Investors.
But there are ways to raise business funding and finance while still retaining control. Peer-to-peer lending, for instance, is an alternative financing option that is rapidly entering the mainstream for small businesses. Organisations such as Funding Circle and Zopa raise capital from wealthy individuals and institutional investors for lending specifically to small businesses. They match investors with companies who want to borrow, often offering lower interest rates than banks.
Crowd-funding is another alternative that raises finance from ordinary people using an internet marketplace such as KickStarter or RocketHub. However, crowd-funding usually requires some serious marketing effort via social media, email campaigns and the mainstream media to be truly successful. Exciting, cutting-edge businesses are likely to do much better raising cash through crowd-funding than more mundane businesses.
4. Track Your Finances With Software
It's all very well setting a goal but if you don't monitor it regularly it is easy to quickly veer off track. This is where good software can come in useful and there really is no excuse for not using an up-to-date software package. They are relatively inexpensive (even sometimes free) and easy-to-use so ditch the spreadsheets – you could opt for one of the well-known packages such as Sage or QuickBooks but some of the newer kids on the block have simpler interfaces and functionality for small businesses and are cloud-based so easier to manage for small businesses. Try out something like Kashoo, One Up or Freshbooks or one of the many other alternatives. For micro businesses, there is even a free version of Wave Accounting so there is no excuse for failing to track your finances accurately.
5. Set S.M.A.R.T. Goals
Many companies establish several interim goals or milestones to move the company a few steps forward towards their ultimate financial goal. Breaking down your final objective into smaller, more achievable steps always helps whether the goals are financial or otherwise. But remember that goals are not just random ideas plucked from thin air – in order to have a chance of success they should always be S.M.A.R.T. goals. This is a term that means goals must be Specific, Measurable, Achievable, Relevant and Time-bound.
Goals like 'We want to be as successful as Apple as soon as we can' clearly aren't SMART! But in the simplest sense 'We want to double our turnover by the end of 2018' is SMART. So making the goals might seem relatively easy but it is important to make the right sort of financial goals – ones that you can actually achieve.
All businesses will have their financial ups and downs whether they are young startups or well-established organizations but building a company based on long-term visions and achievable financial goals will result in a financially healthier business. And good financial health is (almost) all a business needs to succeed.