Setting Your Financial Goals When Starting Your Own Business
Starting your own business is an exciting journey and a bit scary. It can be thrilling, full of potential, and, if you don’t plan properly, it might just burn through your wallet.
With the right financial strategy, you can navigate this journey and find a solution that helps your business thrive.
Define Your Vision and Financial Objectives
Every great business starts with a strong vision. Before diving into the numbers, take a moment to dream big – define what success looks like for you. This isn’t just about making money – it’s about understanding your personal.
Questions to ask yourself:
What is the mission of your business?
What products or services will you offer?
What impact do you want to make in your industry?
Once you have a clear vision, translate it into financial goals.
Your short-term goals might include covering your startup costs and breaking even, while your long-term goals could involve hiring employees, expanding your product line, or finally affording that well-deserved vacation to Hawaii.
Now that you know what you’re working toward, let’s talk about how to financially support that vision. And the first step? Creating a budget that keeps you on track.
Establish a Realistic Budget
A well-planned budget is like a well-packed suitcase—you don’t want to find out too late that you forgot the essentials. It’s essential to understand your financial limits and expectations in order to run a sustainable business.
Your budget should include:
Startup Costs – Equipment, licenses, inventory, marketing, and coffee. Lots of coffee.
Fixed and Variable Costs – Rent, utilities, employee wages, and that one (or two) subscription service you swear you’ll cancel.
Emergency Fund – Unexpected expenses will happen. A broken laptop or a surprise tax bill shouldn’t send you into a panic.
Keep a close eye on your expenses so it can prevent financial stress down the road. Budgeting is crucial, but keeping your personal and business finances separate is just common sense.
Separate Personal and Business Finances
Mixing personal and business finances is a risky game
To stay organized:
Open a dedicated business bank account to manage transactions separately.
Use a business credit card for expenses to build credit and keep finances clear.
Pay yourself a set salary to create a financial boundary between personal and business income.
Trust us, your accountant (or future self) will thank you.
Always know where your money is going.
Track Your Income and Expenses
It is crucial to track income and expenses. If you don’t know where your money is going, it will be harder to make smart decisions on how to grow your business; the more you know about where your money is going, the better you can make informed decisions.
To stay on top of your financial health:
Use accounting software like QuickBooks or Wave for easy tracking.
Set aside time weekly or monthly to review transactions and update records.
Consider working with a financial professional for expert guidance.
Plan for Taxes Early
Taxes can be daunting, but ignoring them won’t make them disappear (we checked). Instead of scrambling at the last minute, be proactive and prepare for them in advance.
Understand your tax obligations. Check resources like your Small Business Administration or state-specific websites:
WA: https://www.business.wa.gov/site/alias__business/875/Home.aspx
Small Business Administration: www.sba.gov
Set aside at least 16% (15.3% to be precise) of your income for taxes. As a business owner, you may have tax responsibility. It is helpful to set them aside with each transaction of revenue.
Learn the difference between deductions and credits to maximize tax benefits. Consulting with a financial expert to make sure you’re playing smart with deductions and compliance.
Set Revenue and Profitability Goals
Setting revenue and profitability targets is key. Break your goals into actionable steps, like increasing sales, optimizing pricing, and managing expenses with the discipline of a budgeting ninja.
To create realistic financial goals:
Identify how much revenue you need to cover expenses and turn a profit.
Set monthly and quarterly sales targets based on past performance and market trends.
Adjust your pricing strategy to ensure you’re not undervaluing your work.
Keeping an eye on your profits is great, but having expert guidance can take your business to the next level.
Seek Professional Guidance
Let’s face it—financial planning isn’t always fun, but it’s a whole lot easier with the right support.
Why work with professionals?
They provide personalized insights and strategies tailored to your business.
They help you navigate tax laws, deductions, and financial planning efficiently.
They ensure you’re making data-driven decisions rather than guessing.
Working with professionals, like our team at Hayes Consulting and Coaching, gives you personalized insights and strategies that actually make sense for your business. We’re here to support businesses, nonprofits, and individuals in achieving financial security.
Final Thoughts
Setting financial goals doesn’t have to be painful. With a solid plan, a dash of humor, and the right support, you can set your business up for success.
At Hayes Consulting and Coaching, we believe financial security should be accessible to everyone, and we’re here to help you make it happen!
