3 essentials financial goals for solopreneurs and small business owners

Want to know what the 3 essentials financial goals for solopreneurs and small business owners are? As a business owner you’ve set your business up for a reason and one of those reasons probably involved making money. Rather than just hoping the finances work out you should be setting, and closely monitoring your progress, against key financial goals. Keep on reading to find out what the 3 essential financial goals for solopreneurs and small business owners are. 

 

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3 ESSENTIAL FINANCIAL GOALS FOR SOLOPRENEURS AND SMALL BUSINESS OWNERS

1. Revenue Goal 

The first, and most commonly set, financial goal that business owners set is a revenue goal. Revenue is often referred to as gross sales and some people will call it the “top line”. Your revenue shows the total amount of income generated by a business.  

 

Revenue is an easy financial goal to monitor, which is why most businesses, regardless of whether they are big or small, will set a financial goal based on revenue. In the world of online business, it is common to hear people talk about being a six-figure or seven-figure business owner. This means that their revenue figures is over 100,000 or 1,000,000 respectively.  

 

Whilst a revenue goal is the most commonly set financial goal for a business it doesn’t mean it is the best financial goal to set. Knowing the total about income generated only tells you part of the story, which is why you shouldn’t only set a revenue goal for your business.  

 

For example, let’s compare two businesses 

 

Business A 

Revenue: £125,000 

Expenditure: £50,000 

Gross Profit: £75,000 

 

 

Business B 

Revenue: £95,000 

Expenditure: £10,000 

Gross Profit: £85,000 

 

If you are looking purely at revenue then Business A would be considered to be doing better, however, when looking at expenditure the story changes and most would consider Business B to be doing better. 

 

To be clear there is nothing wrong with setting a revenue goal, it is just that it shouldn’t be the only goal you set for your business. You should also set a profit goal.  

 

 

2. Profit Goal

As shown above revenue doesn’t show the whole full financial picture, which is why you should also set a profit goal. You might decide toset a gross profit goal (where you calculate income minus expenditure) or net profit goal (where you calculate income minus expenditure and tax). You’ll have to decide based on your business model, and how you track your finances, what makes the most sense for you.  

 

 

Whilst all businesses want to make a profit the amount of profit you want to generate will depends on your other business goals. For example, if you are a limited company director that pays yourself dividends then the level of profit for your company makes will have a direct relationship with the amount of dividends you want to receive. If you have big growth goals for your business that involve being able to invest in equipment, office, team, mentor etc then you might want to have a profit goal that will allow you’ll be able to reinvest into the business.

 

3. Pay yourself goal

Last but definitely not least, you should have a goal around the amount of money you personally receive from your business. When I tell clients they should have a pay yourself goal they are usually shocked. Many solopreneurs and small business owners pay themselves what is left in their business. If you currently have that attitude, then I want you to think about how well that has been working for you. If you haven’t been paying yourself or taking as much money out of the business as you would like, then I encourage you to set a pay yourself goal.  

 

Setting a pay yourself goal is important for two reasons. Firstly, when you have a goal around paying yourself in most cases, you’ll end up paying yourself more than you would without the clear goal. Secondly, when you have a pay yourself goal you can then properly calculate what your profit and revenue goals should be.  

 

So often when a solopreneur or small business owner tells me their revenue goal and what they would like to pay themselves I can instantly tell those numbers don’t work. It is obvious to me that even if they achieve their revenue goal it wouldn’t enable them to pay themselves the amount they want to do. Which is why I recommend you set your pay yourself goal first and then set your profit goal and revenue goal.  

 

That’s it. You now know what the 3 essentials financial goals for solopreneurs and small business owners are.

Setting financial goals for your business is so important. Once you’ve got your top-level financial goals set, you’ll then be able to work out how many services and / or products you need to sell, and the level of marketing you’ll need to generate those sales.  

 

Also, the idea is not to set your goals and then forget them. You should have a proper monitoring or tracking process in place so you can review how you are performing in relation to your goals.  

 

Let me know in the comments what your biggest takeaway was and how many of the 3 financial goals mentioned you currently have set for your business. 

 

WANT TO SUCCESSFULLY RUN A PROFITABLE AND THRIVING ONLINE SERVICE-BASED BUSINESS ?  I’m a Marketing Strategist and Business Mentor that specialises in supporting coaches, consultants and online service providers who are small in size, but big in ambition. I help my clients to build  thriving online businesses,  that provide them with the finances and flexibility to live the life they dream of. To find out more about how we can work together check out my services here.   And to discuss your precise needs book a free, no-obligation, introduction call to discuss your business here.