Aside from making sure that you choose the correct goal, one of the most important aspects of goalsetting is the positive effect that can be derived from monitoring your progress towards its achievement. Not only does this process help you to stay on track and ensure that you do eventually achieve your goal, but it serves as a reinforcement of the strategies that have taken you there. The methods we use to monitor your progress towards your goals will vary depending on the type of goal, and on your own preference.
For simple goals, like the accumulation of capital or the maintenance of a positive Profit/Loss statement month on month, simple accountancy tools like Profit/Loss and Cashflow projection – which will also serve to enhance your control over other aspects of your operation – may well suffice. For more complex goals, like the acquisition of a larger market share, or performance against specific Benchmarks or KPIs, for example, we might suggest the construction of a more complex algorithm into which you can input your own data.
For those with a mind for technology, we offer a unique ‘Goalseek Analysis’ tool that runs alongside your existing cloud-based accountancy software. It provides Bespoke Reports and allows you to model the effect of a huge number of variables on your progress towards your goal for any point in the future.
Beyond this, it may be that the best way we can help you is actually to support you through the process of selecting an appropriate goal. This may be especially true if you feel that you or your staff are beginning to lack motivation or to lose sight of your reasons for going into business in the first place. We will take an holistic view of your operation with the benefit of fresh eyes and help you to devise a set of short, medium and long-term goals that are appropriate for you, and will get things moving forward.
We offer a free initial consultation to new customers, which might be the best way for you to get in touch. A discussion around new and existing goals can often be the stimulus for significant change.
Goalsetting is a highly personal activity. It gets to the heart of why you went into business in the first place, and highlights one of the main advantages of being an entrepreneur: the ability to determine for yourself the direction in which your effort takes you.
Financial goals concern the ideal state of your business’s finances at various stages of its life. They might relate to a particular monthly income for you, a particular profit, turnover or the power to purchase a new piece of equipment or make a specific investment. Whatever it is, having and achieving goals makes running a business worthwhile; and, if the goals are properly chosen, they will serve as powerful motivators to help you and your operation perform better.
It’s important to understand the difference between short and long-term goals. None of the giants of the business world have achieved by thinking small, but nor have they tried to make the leap all in one go. Your long-term goal might be enormous, but you need short and medium-term goals to help you get there.
The quality of any type of goal, financial goals included, can vary. A goal such as ‘I want to raise more capital’ is too vague. It doesn’t contain any specific motivators, nor is it easy to assess when it has been achieved. One common method of setting high-quality goals is to use the ‘SMART’ goalsetting strategy. SMART goals are:
• Specific – A goal of this type will not be ‘I want to raise more capital’ but ‘I want to raise £5000 by pitching my new product idea to venture capital’. In setting the goal you might consider:
• Measurable – Measurable goals are easy to assess. There is a clear means of determining if, and when, the goal has been reached. A goal like ‘I want to have a bottom line cash surplus at year end of £45,000’ is more measurable than ‘I want financial security’.
• Achievable – Achievable goals are challenging but realistic, perhaps comprised of small, easy steps. Although challenging, increasing your monthly income by 25% is a more realistic goal than earning £100,000 in the first month, for example. If this is your long-term goal, the monthly goal might be a stepping-stone towards it.
• Relevant – A worthwhile goal must be something you care about, something that matters to you and to your business. In this way, it will provide you with real motivation to achieve it, and to continue the work you do every day.
• Time-Bound – There must be an endpoint, a deadline, a timeframe for your goal to be achieved. ‘I want the business to be more profitable’ is not a good goal. ‘I want to maintain a positive Profit/Loss statement for each month of the coming year’ is.
Another important aspect of goalsetting is that your goals should be optimistic. They should inspire you and your staff in a real, meaningful way. ‘I want to be able to pay the bills this month’ is a necessity, not a goal to get you going. ‘I want to achieve a position of financial security’ is much more positive, although it might be saying the same thing. You can then submit this general goal to the SMART analysis to break it into specific parts.
Communications with HMRC & Companies House
Self Assessment Tax Return
CT600 (Company Tax Return)
Monthly Management Accounts
Accounting Systems Set-up
Business Startup – Company Formation
Benchmarking and KPI’s
Virtual / Part-Time Financial Director / CFO
Non-Executive Director (NXD/ NED)
Disaster Recovery Systems
Monthly / Quarterly / Annual Performance Meetings