As the back-to-school season is in full swing, you may be feeling like the epic summer you planned didn’t quite happen. Depending on how your summer went, there are probably many things you wished that you accomplished. But don’t get too discouraged as there’s still plenty of time left in the year! Here are some simple steps you can take to create a business trail-map to get back on track with your financial goal planning.
1. Know Your Final Destination
How will you know if you hit your target if you don’t have something to shoot for in the first place? This is why it’s so important to start with the end in mind, and fully understand what your final destination is. Are you planning for future business growth? Or are you in a phase of transition and cutting back? What’s your plan for the next 12 months, 2 years and even 5 years? What steps are you going to take to get there?
Refer back to your business plan and visualize your dream business. How will you turn this into reality so you can go from where you are, to where you want to be in the future? In order to realize your business goals, you’ll have to navigate smaller steps along the way.
2. Create a Realistic Budget Plan
When was the last time you looked over your business budget? If it’s been a while, take time to evaluate your budget and make sure it’s still working for you. You want to create a realistic budget that’s customized to better fit your needs. Start by listing out your current income and expenses, as well as other priorities and financial goals.
List out your net revenue
Deduct all your fixed expenses
Set aside funds for savings and investment goals
Use what’s left at the end of the month for extra savings or debt payments
Review your expenses and see which ones are no longer working to their fullest potential. Are there certain categories you can cut back on? Be realistic about your spending, always keeping the bottom line and financial goal planning in mind.
3. Manage Your Cash Flow
Once you’ve created a better budget plan, the next important step is staying on track with everything. Managing your cash flow is a vital part of keeping your business and personal expenses balanced. However, it’s not always easy to stay motivated to pay off debt or stick to a budget, so here are some tips for staying on track.
Find an accountability partner – When your personal discipline wanes, seek out an accountability partner in the form of a business friend or colleague. They can help remind you of your goals and offer motivational advice when you’re having problems staying disciplined.
Be proactive with your money – Sign up for regular bill alerts and automate your monthly payments as much as possible. Do everything you can to stay on top of your money by reviewing your accounts regularly and making adjustments as necessary.
Look for ways to save – You can never go wrong with finding more ways for saving money and reducing your tax bill. Have a talk with your bookkeeper concerning what investments can be made into the business, or ways you can cut costs.
Staying on track with your money isn’t easy, but with a little discipline and accountability, you can manage your cash flow successfully. And doing so will allow you to reach your personal financial goals much faster.
4. Perform Regular Check-Ins
How are you progressing on your financial goals? Are you on track, or moving too slow? Performing regular check-ins of your cash flow and finances will allow you to stay on target with these goals. Set weekly or monthly budget meetings to review your financial reports and evaluate what can be tweaked.
Large investments and other one-time expenses can easily eat into your profits, as well as throw you off course really easily. There’s always room for improvement and experimenting with more cost-effective systems. This is why you can’t underestimate the importance of regularly reviewing your expenses and finding ways to get back on track.
5. Plan for Emergencies
Even with all the planning in the world, you have to be ready for emergencies and unforeseen events. And while you may not be completely prepared for everything, the idea is to lessen the financial blow as much as possible. Make sure you have the proper insurance coverage for yourself and your business.
Are the policies up-to-date with the proper terms? What’s the worst case scenario for various financial and business events? Do you have all your bases covered, or are there areas that can be improved? If you’re not sure, schedule a meeting with your financial advisor, CPA, lawyer, and insurance agent to update everyone. Then set up a recurring meeting every quarter so everyone can be collectively working towards your goals.
The Bottom Line
If you’re disappointed with how slow the summer months have been, we can help. Here at Trailhead Accounting Solutions, we can aid you in implementing these steps so you can forecast your cash flow. Then, you’ll feel confident about mapping out an action plan for your business so you can support your personal financial goals! Give us a call today.