Setting goals is crucial for success in every area of your life, as they help you to measure the smallest of steps against the backdrop of your ultimate target. Without a strong set of goals in place, you’ll find it difficult to judge whether you’re moving forward at an acceptable pace and even if you’re moving forward at all.
Thankfully, there are some steps that can be taken which will allow you to set strong goals, work toward them and increase the chances of success in your business.
Why create financial goals for your business?
As mentioned above, goals give you a tangible target, which makes small improvements much easier to track. It also allows you to judge how fast you’re moving forward and assess whether that is acceptable.
Almost every successful business is built through incremental steps over a long period of time. Yes, even that overnight success you heard about online.
How do you create effective and achievable goals?
Once you understand the benefits of setting suitable goals, the next step is using them to plan the growth of your business.
A popular method of setting goals is called S.M.A.R.T. This is an acronym which asserts that the same set criteria should for each goal. S.M.A.R.T goals must be specific, measurable, attainable, relevant and time-limited.
Each criterion is crucial to allowing you to move your business forward. Failure to address even one of these points can result in the rest of the goal failing. Where mistakes are made, the next step can be key to turning things around.
Regularly review your progress and the goal itself
Once you’ve set your goals, it’s important that you regularly review things. This is where the real magic happens as its here that you can ensure that you’re on track, and adjust things if you’re not.
The best way to manage this is to set time aside on a regular basis and stick to it. If you find that you’re struggling to keep this up, block recurring time out in your diary and make sure you don’t ever move it.
As you make progress towards each goal, its important that you review the next steps. As soon as you hit one target, use these sessions to set new, bigger goals based on your improved position.
How can I use finance to fund growth towards my goals?
For more challenging goals, you may need to access finance to bring them to life. There are a number of financial products that could be right, depending on your business and your aims.
The most obvious option is an unsecured business loan. They work in much the same way as personal loan in that funds are released to you and repaid over a set term through monthly repayments. These loans are usually available for up to 5 years.
Unsecured business loans are relatively simple to arrange, but the short repayment periods can mean that the monthly payments tend to be high. This may impact your cash flow and can make it tougher to be approved for finance.
You can raise finance against your business premises using commercial mortgages, usually up to 75% of the property value. This can be a really great way to raise funds are the security of the property makes lenders far more relaxed in their lending criteria. In many cases, funds can also be taken over a much longer term, often up to 20 years.
The downside to commercial mortgages lies in the time-consuming application process. These applications can often take 8-10 weeks and do require a lot of effort on the part of the applicant.
Finally, when funds are needed quickly, many businesses opt to take a bridging loan. Bridging loans are a type of short-term funding which is secured against a property. These loans can often be arranged in 5-7 days.
Bridging finance is usually offered for a term of up to 18 months. In some cases, the lender will allow you to roll the interest on top of the loan, meaning there are no monthly repayments to make. This can be a big benefit when you’re funding rapid expansion, where cash flow may be tested at times.
What are the key considerations?
Before taking finance to fund the expansion of your business, you should make sure that your goals are realistic and well planned. Although even the best plans can play out differently in reality, being well prepared and ensuring that you’re keeping financial risk to a minimum will generally serve you well.
Before you proceed with an application, its wise to take professional advice and discuss your plans with your accountant before moving forward.