Setting Financial Goals for a Business

In order to determine the financial goals for a business, the first thing that has to be established are the long-term goals of the owner or founder for the years to come. It is best to look at the envisioned end of the business and decide exactly how much you want it to be worth or what you want it to be making on a yearly basis.

As an example, let’s say you want to make a million dollars a year. In order to do that, you have to work backwards from that million dollars of profits to determine exactly how you are going to get there. This means that you need to review your marketing and public relations programs, as well as your sales programs, to see if these areas are established enough to produce what it would take to make that million dollars of profit per year.

Most of the time, I see businesses not coordinating their financial goals with their marketing and PR as it is these programs that will drive in the business needed to make the money that they want to make.

So, once again, if you want a million dollars in profits (or whatever figure you have worked out) you would have to determine what you need to gross to net those profits. Enter this gross amount on a spreadsheet and work backwards from it to establish what actions will drive that amount of business or sales and then break it down into monthly quotas. After that, further break it down to weekly quotas.

If you find that your business model does not equate to the established quotas, then your model itself may not support that amount. But, I can tell you that the biggest omitted factor in driving in the finances is the proper application of PR, marketing and sales. They are either not being done, being done inconsistently, ineffectively, or not with the full coordination necessary to drive in the revenue. PR and marketing are more than just creating nice effects.

In summary, establish the profit margin and its gross, determine what areas will drive in the business and work out, in exact detail, the quotas needed to achieve your overall financial goals.