Setting goals at the beginning of the year for your business is no new thing. Lots of business owners take time in December to recalibrate, take a breath and plan for the future.
There are many approaches to goal-setting and hundreds of brilliant articles out there on how to set smart, effective business goals – this article brings you our four things to consider when planning for 2024!
1) Reflect
First off, take some time to think about where you are now and how you’ve got there.
Much can be learnt from what’s gone before so instead of ploughing straight into thinking about 2024, take a moment to reflect on the past year.
Some good questions to ask yourself are:
- What went well in 2023?
- What didn’t go so well in 2023?
- How has the business performed financially this year?
- What are your takeaways heading in to 2024?
You can use these insights to inform your goals for the year ahead.
Many of us are guilty of failing to celebrate our wins too. As you reflect on the past year, take a moment to celebrate the successes that you’ve had, however big or small.
2) Think financially
Once you’ve got your goals in mind, it’s important to consider whether they are financially achievable. If not, then what action is needed to make the goals achievable?
Why is this important? Well, a key reason people don’t achieve their goals is because they are not realistic. It sounds obvious but many people get so lost in what they ‘want’ to achieve that they don’t stop to think about the practical steps needed.
Depending on your goals…
- Think about what needs to change to hit a financial goal. For example, if you’re looking to increase turnover, then will you increase prices or volume?
- Will the goals you’ve set strain cash flow?
- Are they achievable organically?
- What impact will they have on gross margin or gross profit, and in turn on your bottom line?
- How many months will it take you to break even in the new calendar year?
How can your accountant help you with your business goals?
Most accountants can provide management accounts, often referred to as management reporting which provide data to help you both set and measure progress against your goals. Allowing you to plan for different scenarios, test ideas and build a strategic goal-centred plan.
Why are management accounts beneficial?
Management accounts are more timely than say your financial accounts, which are prepared annually and are backward looking. Management accounts are strategic and give you a real-time picture of business finances to help inform decision-making over the next month or quarter for example. They are produced regularly, most often monthly or quarterly and help spot trends, opportunities and address issues.
These days management accounts go beyond pure financials too. They often bring in other KPI’s that are key to the business, so can include measures for customer satisfaction, customer acquisition cost or website traffic and conversions.
3) Plan bitesize goals
Once you’re clear on what you’d like to achieve it can be tempting to set BIG, lofty goals for the year, but if these aren’t underpinned by micro goals it’s unlikely they’ll be achieved.
Saying, ‘In 2024 the business will double turnover’ will achieve very little, even if you’ve worked out it’s financially achievable. What you need is a manageable, actionable plan you can follow throughout the year to achieve the goal.
Having timescales anchored into each micro goal keeps you on track to achieve the overarching aim. You can make your goal-setting plans as sophisticated as you like, the important thing is you have a plan!
The output of management accounts will make the task of setting micro goals that much easier as you’ll be able to see in almost real-time how you are performing against your plan allowing you to adjust quickly where needed.
4) Don’t get carried away
In our experience, business owners are by nature optimistic – this can often mean that dreams and desires for the business are far-reaching, which can be a great thing! Spirit does help drive success but a lengthy A4 list of goals to achieve in 2024 will only slow things down.
Ensure the overarching business aims are manageable – we’ve often found that having 2-3 goals with structured plans on how to achieve them, works well.
You don’t want to burn yourself out just thinking about what needs to be achieved in the year ahead!
Prioritise the main goals for 2024.
If you’d like our support with your 2024 financial planning and would be interested in talking to us about our full finance offering, including management reports, get in contact today! Let us help make 2024 a year of growth for your business.
