New Year’s Resolutions: Set Your Business Financial Goals for 2022

If you’re planning to get your business finances in place for the coming year, the first thing you need to do is to forecast your coming year. Knowing what to expect can help you to plan for slow periods, as well as to set smart goals for business growth. The best place to start is by looking at the financial information for your business in the last one, three, and five years.

Take a look at your cash flow for each month, including revenue and business expenses. Look for any patterns over previous years, such as slow seasons, periods where you have to spend more, and months when you have the highest sales.

Decide on reasonable growth goals for each month and quarter based on both those patterns and your rate of growth from previous years.

Once you have your financial forecast in hand, you’ll be ready to launch into your new fiscal year. It is critical to keep close track of your business cash flow. If you don’t know how much money you have coming in and going out, you can never know how your business is doing.

Set aside time at the end of every week to review sales and expenses, at least briefly. At the end of each month, do a more in-depth dive, comparing that month’s cash flow to the same month in the previous year(s) and to the forecast you developed. Set up tracking systems to better monitor your accounts receivables; cutting the cash collection cycle by just a few days can lead to increased cash flow that you can use to pay debt down, take advantage of early pay discounts with your vendors or pay yourself.

While you have to put money into your business to get money out of it, you want to make sure you’re not throwing away money. At the end of the year, take a look back at your overall business budget. Categorize your spending, and look at areas where you’re spending the most money. 

Your top spending areas should align with your business priorities, whether that be R&D, customer care, manufacturing, employee development, and so on. If one of your top spending areas is out of line with these values, look at where all that money is going and if you can reallocate it.

Be sure when you’re doing this that the “unnecessary” expenses you’re cutting don’t include necessary morale boosters for your team.

Now that you’ve trimmed the fat out of your expense budget, it’s time to start getting your overall monthly budget in order. As we mentioned earlier, you want to make sure that your spending lines up with your stated company values. Setting a budget for each division of your company can help you to make sure your business is operating in the way you want.

Meet with your team leaders and determine how much money they need to keep their departments operating each month. Look at areas that may need a little more cash flow, and make sure to account for the months when things are a little slower.

Also pay attention to which spending areas generate the biggest return on investment, and try to focus any extra cash flow there.

As we all learned in 2020, it pays to be prepared for the worst. While no one expects a devastating pandemic to strike, smart entrepreneurs need to be prepared for anything, including months-long shutdowns. Just as you have with your personal finances, you need to set up an emergency fund for your business.

Determine how much money it would take to keep your business alive for one month, three months, six months, and one year. If you have no emergency savings whatsoever, start by aiming to save up a month’s worth of expenses. From there, work on building up that account until you could safely keep your business for a year with no new income. 

The beginning of the year is a good time to take a long, hard look at your product pricing and whether it’s still working for you. Fluctuations in the economy can change both your wholesale price and the market value of your products.

You need to make sure you’re keeping your prices set, such that you can stay competitive while still turning a profit. 

Take a look at what your competitors are charging for similar products, and see if you can afford to raise your prices or if you need to lower them. If you should lower the price on something to stay competitive, take a look at your cost for that item and what sort of profit margin that leaves you with. If you can’t turn a reasonable profit on that item, it may be time to start phasing it out.

As with your personal finances, debt can quickly become an anchor around the neck of your growing business. While some business debt is the leverage that a business needs to grow, you want to make sure that the cash flow needs to make the payments are still reasonable and at the best terms.

When you’re setting up your monthly forecast, be sure to account for principal and interest payments, and keep your forecast such that you’re not adding more to that balance. If you have multiple credit cards and loans to pay down, start with the debt with the least advantageous terms and focus your efforts there.

Once you have that debt paid off, roll the payment for that debt into the payment for your next-highest balance, and so on.

It should come as no surprise that a positive customer experience is at the core of your business success. Happy customers come back and bring their friends with them. If you want to keep your business growing and thriving, you need to make sure you’re giving your customers the best experience possible.

Send out customer feedback surveys and ask what your current customers would like to see more or less of. Listen to customer complaints and try to take any lessons or insights they may provide.

Find ways to show your customers you genuinely care about them; that simple attention will go much farther than any pre-baked platitude ever could.

When you’re looking at where to invest money back in your business, it’s a good idea to turn your attention to tools that can help to improve your productivity. Having the right tools for the job can help to save a lot of company time and can increase your production capacity. In many cases, these tools will wind up more than paying for themselves.

Look for opportunities for automation in your business, and invest in tools that can handle the repetitive, tedious tasks for you, instead of spending employee time on those. Ask your team if there are areas where they’re having to cobble together solutions, and look for software designed to tackle those problems.

Giving your team the tools they need can make them more productive and keep your business on the rise.

It’s also a good idea to focus more of your investments on your marketing efforts. Maintaining your current customer base is fantastic, but you have to bring in new customers if you want to continue to grow. Luckily, marketing these days is more accessible and more affordable than ever before.

Nearly 70 percent of American adults have a Facebook page, and another 37 percent use Instagram, so focus your marketing efforts on social media. Run ads directed at your target demographic, as well as your service area. You may also want to look into more creative marketing campaigns that can reach your customer base where they are. Explore and learn about the Metaverse and how it and other marketing developments could change the way you interact with customers.

If you want to grow your business, you have to work on growing as a business owner. The world of entrepreneurship is always changing, and you need to be up to date on the latest tools and techniques for business owners. It’s a good idea to make professional development a priority for you and your team. 

Look for entrepreneurship seminars, courses, and events you can attend. Check in with your local Small Business Administration or other business organization for these kinds of events. And look for training opportunities that your team can attend to grow their skills and keep you on top of the competitive heap.

As a business owner, it can be easy to feel like you have to make every single decision yourself. In fact, you may have some days where you feel like all you do is answer questions, attend meetings, and run around putting out fires. Unfortunately, this doesn’t leave you with much time to do what you originally started your business to do: run your business.

In the new year, make it a goal to delegate more tasks to your team members, so you can focus your time elsewhere. From your team’s perspective, this gives them a chance to learn more, grow their leadership skills, and become more invested in the business.

And on your side, you’ll have more resources to dedicate to operating and growing your business.

It may surprise you to learn that practicing self-care should be one of your major business financial goals for the upcoming year. After all, you need to be putting more time into your business to get more out of it, right? But this is one of the quickest ways to burn out as an entrepreneur.

Make sure you’re setting aside time to relax and step away from your business on a regular basis. Go for a run, do some yoga, meditate, pray, journal, or just simply sit and enjoy a cup of tea or coffee in the morning.

Take a vacation every now and then, and stay tuned into your mental health so you have more to give when it comes to your business. 

In addition to taking care of yourself, it’s also a good idea to devote some resources to taking care of your community. For one thing, donating money to charity can help to improve your community and keep your business honest and genuine. But it’s also true that 85 percent of consumers believe it’s important for a business to give back to their community.

Find a local charity you like, and pledge to donate a certain portion of your revenue to them each year. You may even run special sales or events benefiting this organization. Let your customers know about this benefit, but be sure not to be too ostentatious with these announcements.

Set Financial Business Goals for 2022

The new year is always a good time to set fresh goals, and setting the right business financial goals can help you to find even more success in the coming year. Make sure you know where your money is going, and set up a solid emergency fund. Also plan to invest money in professional development, marketing, and productivity tools to grow your business.

If you’d like to learn how to set business financial goals in 2022, check out the rest of our site at SSC. We are CPAs and advisors serving clients with forward-thinking solutions, timely services, and unparalleled commitment. Check out our welcome page today, and discover how we can help you grow your business wealth.