One of the keys to success of any business is the importance of knowing your numbers. What does knowing your numbers mean? As a business owner, you need to understand what your financial numbers are telling you about where you have been, where you are now, and where you are going. There are 4 areas of focus that will help you feel more confident about your business. Each week I will share one area.
Set Financial Goals
When you play golf (yes back to golf again!) do you just go out and hit as many balls as you can and hope that you have a good score? What is a good score – 3 strokes, 5 strokes, 10 strokes? Every hole in golf has a par – the expected number of strokes for that hole. Now you have a goal! If the hole is a par 3 your goal is 3 strokes or less.
If the hole did not have a par then how would you know if 5 strokes was good or not? The same goes with your business – if you don’t have specific financial goals how do you know if you are successful or not? Prepare a budget, a plan, a forecast. Whatever you want to call it, you need to have guides along the way that tell you if you are on the right track to get from Point A to Point B.
Eric has over 25 years’ experience in small business, startup, and large companies and has held numerous roles focusing on business and financial strategy in businesses. He is currently the CEO and Owner of EDGe Business Planning. EDGe works with small business owners to help them understand their financial and business information and use it to grow their business profitably. Contact us at hello@edgebusinessplanning.com.