7 Keys to Setting Financial Goals for Your Small Business

setting-financial-goals

ABOUT THE AUTHOR: Alec Dobbie is co-founder and CEO at FanFinders – a performance marketing and consumer insight company that connects brands with parents who want what they have to offer. FanFinders is the number one supplier of 1st party opt-in data in the UK baby market.

For us business owners, it’s all about that ongoing creation. It’s the continual ‘What are we doing next? What’s interesting? What’s exciting? How can we change? And what’s going to take us to the next level?’ 

Each time you reach that new level, there’s another one. It’s about progressing and finding those challenges – whether that’s building a better experience for your customers, or fresh ways to support your clients. 

There is no end point, and it’s that push that keeps us going.

Over the past eight years, we’ve built up FanFinders (our performance marketing and consumer intelligence business) without raising a penny of venture capital. 

The journey – from starting out with £1500 to where we are now – has taught us many lessons, not least of which is the importance of having realistic and achievable financial goals when striving for growth.

Would we have been able to move quicker with external funding? I think we probably would have developed faster with the knowledge I have now. But back then, we just as easily may have gone off on tangents and spent money in the wrong places, or on processes that didn’t work correctly. 

In the end we didn’t struggle, because we had a lot of skilled people who were willing to give up their time for equity, instead of a salary. Without them, it wouldn’t have been feasible.

Here are a few things to consider when setting out and tracking against your financial goals:

1. Share across the whole team

It’s important in most businesses to see measurable growth, explaining at an individual level that this is where you’re going and this is what you’re going to do to get there. 

You have to get everyone on the same bus. Do this by laying it out ahead of time and making it clear it’s reliant on one part of the business doing ‘X’, another doing ‘Y’, etc. And if one of those parts doesn’t deliver, you won’t get there. 

It’s about saying ‘If we don’t all pull together, we don’t reach our target.’ 

TOP TIP: Slack is a great tool to get your team communicating. It has multiple channels and lets you upload and share all kinds of content. Definitely worth setting up!

2. Staying still can mean success

Goals are about setting expectations across the team. You use them to make a decision about whether you want to progress. Sometimes, the best decision for a business is actually not to progress, but to remain stable. 

If you’re a smaller company, you might know that to get to the next significant level you need to hire 10 more staff  – and you might not want to go in that direction just yet. 

The pandemic has been a great reminder of how survival can equal success. Some years you might be happy to say you’re going to do 2% more than last year just to keep up with inflation. 

TOP TIP: One clear way to measure growth and set goals is through tracking software. Hubspot is a great CRM for keeping tabs on clients and leads. You can get the initial version for free.  

3. Allow for mistakes

To some extent, you need to factor in mistakes. An innovative mindset comes from creating a culture that incorporates risk-taking. In order to do this, it’s key to develop a ‘failing is learning’ attitude. 

Allowing for risk ultimately means accepting that some stuff isn’t going to work. If you’ve tried something – and you do have to test it within reason, with boundaries such as time or cost – and it doesn’t work, you have to take a learning attitude towards the process. You shouldn’t punish mistakes or panic, but instead see what lessons can be taken from it. This freedom allows for growth over the long-term.

TOP TIP: Henry Ford once said, “Failure is simply the opportunity to begin again, this time more intelligently.” Check out these 7 steps you can take to learn and grow from business failings and mistakes.

4. Know when to evolve

One of the biggest mistakes you can make is to continue with a terrible idea for too long. In order to do this, you need a simple way to determine what ‘good’ or ‘terrible’ means within your market, and how you get there.

Make it numeric. Whether that’s ‘X’ number of users, a certain amount of revenue or leads generated from a specific area. 

If you fall way short of these targets, it might make sense to pivot. I’m not suggesting you quit early, but I am suggesting that you retain the flexibility to move away from something that isn’t right. You’re here in business to make money, and that idea might never turn around.

TOP TIP: Often, businesses fail to innovate because they’re too focussed on sustaining their core product or service. The Lean Startup is packed with tips on how to innovate successfully from Day One.

5. Accept the small costs

As my CTO would put it, ‘Do not be penny wise and pound foolish’ when tracking against goals. 

From second screens, to better laptops and shiny mobiles, these little things can make a big difference to how valued your team feels. 

The difference between a £50 a month iPhone and the £20 a month brick pales in comparison to the cost of recruiting people – both in agency fees, adverts and time. We give our folks the choice of phone and laptop, and in the grand scheme of things, the price difference is small but the impact on morale is huge.

TOP TIP: According to a 2021 Perkbox survey, 46% of remote or hybrid workers said that employer contributions towards a home work set-up was a top-rated benefit. Some office equipment is tax-deductible and could lower your annual bill, as well.

6. Be realistic

Remember: striving to be a bigger business isn’t always the correct answer. You should tie your business financial goals to your realistic capabilities. 

When it comes to financing your business, trying to run before you walk could be catastrophic. 

It’s easy to look at TikTok and say they went from nothing to absolutely huge overnight. But while you definitely need to be aggressive, pushy and strive for growth, you still have to be realistic about what you can achieve – and when you can achieve it.

TOP TIP: No matter the size of your business (or team), establishing Key Performance Indicators is the first step towards setting achievable targets. ClearPoint Strategy have written a fantastic blog on this if you’re looking for guidance.   

7. Learn from the greats 

Billionaire entrepreneur Mark Cuban reads an average of 3 hours a day, and attributes many of his business ideas to this habit. A major step in setting (and achieving) financial goals is knowing where and how to spend your money. Reading up on tips from successful entrepreneurs in your chosen industry is a great way to do this. 

For example: I’m a huge fan of ‘Rework’ by Jason Fried and David Heinemeier Hansson. 

I’ve followed both authors as they practically invented software as a service (SAAS). I was interested in a view of setting up an internet business that was different from that of a technical developer – which was my background. 

The invaluable lesson I took from this book was: design before you code. People understand designs – they don’t understand database diagrams. And above all, keep things simple (KISS). 

It gives you simple, clear advice on how to set up a business and what not to do. It’s a short book for the better and they have clearly followed their advice to become very successful. 

And if you don’t believe me, any book that Mark Cuban describes as “a must read for every entrepreneur”, must be worth a read.

TOP TIP: If you’re looking for guidance on hiring the right fit for your business, Smart and Gets Things Done has excellent advice on sorting resumes, finding great candidates and hosting successful interviews. 

Don't forget to share this post!

Ready to
get started?

Get in touch and let’s see how we
can work together.