By: Sharita Humphrey –
2022 is just right around the corner. One year closes and another is full of possibilities. Like a chapter in a book, the new year waits to be written — and so do your financial goals.
With all the uncertainties of this year and the last, it’s a good idea to be prepared for whatever may happen. It’s time to set financial goals to help you manage the ups and downs of running your business.
What Are Financial Goals?
Your financial goals are your plan for how much money you want to make in your business. These goals will guide how you run your business, spend your resources, and save. Your business financial goals are about things like profit and growth. You should also have personal money goals, which will give you a different perspective on how you make and spend money in your business.
Some personal financial goals might be to save for a vacation or special purchase, a home, a car, or retirement. All of these goals will require you to set short- and long-term business goals that allow you to live the life you’ve imagined for yourself.
Why Are Financial Goals Important?
Having a goal changes the way you look at your money. You’ll start to filter your daily financial decisions through the lens of your goals. Will you go for a high-end printer or look for a less expensive option? It depends on what will serve your business best and help you get where you want to go. Having a plan will help you prioritize your spending and investments so your business can serve your dreams. The way you use your money today will impact the money you have in the future.
Two Types of Financial Goals
You can plan for both short- and long-term goals.
• Long-term goals – Generally, long-term goals focus on five to ten years from now, and beyond.
• Short-term goals – Think two to five years. Or even just a few months. This might include things like investing in new technology or equipment to boost your productivity and profits.
With that said, here are a few ways to begin setting financial goals for your business in 2022:
1. Step back and evaluate your financial situation for this year to see where you stand. By doing this, you’ll be able to look at your current financial situation and map out where you want to go next. Draw a line starting from your current situation to where you want to be at the end of 2022. Make that your goal. Then work backward to create small steps toward achieving that goal.
2. Make your goal measurable. Have a concrete goal in mind. Don’t just say you want to make more money next year. Set a number. What will your profits be for the first quarter? Second? Fourth? This way, you’ll be able to track your progress and have a clear picture of your success in meeting your financial goal.
3. Write down your goals. This is so important. People who write down their goals are exponentially more likely to achieve them. Have a log of your financial goals for every milestone. For example, your profits for the first quarter will be X amount. When you get to the end of Q1, you can see if you’ve met or exceeded your goal. Write down your goal for every quarter of the year and make your financial decisions based on how you can make that happen. By documenting it, you’ll keep your goal top of mind. And you’ll be closer to achieving it.
4. Examine and outline your monthly budget. Keep a close eye on your budget to gain insight into where you need to adjust in order to reach your goals. Outlining your monthly budget will help you control your finances as well. Be wary of making adjustments. You’re spending your money to profit from your business, and if you compromise too much on the little things, you can end up compromising your future investments as well. By keeping a close watch on your budget, you’ll be able to determine the adjustments that will help you reach your goals.
5. Determine which are short-term goals and long-term goals. Make short-term goals as well as long-term goals. How will you work and grow profits in the near-term and beyond?
Now that the year is coming to a close, it’s the perfect time to set your goals for the next year. With clear financial goals and a solid dedication, your business is set up to grow and expand.
About the Author: Sharita M. Humphrey is an award-winning finance expert, money mentor and Certified Financial Education Instructor. Once broke and homeless, Sharita completely transformed her life and is now a successful entrepreneur and one of the most in-demand money coaches for individuals and business owners of color. In 2020, Sharita was named National Financial Educator of the Year.