Whether you’re a seasoned entrepreneur or you’re just starting out your business journey, creating a solid financial plan is essential, but in the hustle and bustle of the holidays and other daily business operations, it’s easy to get sidetracked and neglect essential financial planning.
So, as the new year unfolds, it’s time to chart a course for business growth and financial freedom.
It’s never too late to begin laying the groundwork —defining your goals and strategy — and achieving new financial success.
Carefree Bookkeeping understands the unique challenges small businesses face in today’s business landscape, so we created a step-by-step guide to help you tackle the task of creating a new year financial plan for success.
You can reach new prosperity in 2024 even if you’re getting a late start on those goals.
Step 1: Reflect on the Past Year
Before diving into the future, it’s important to take a moment and reflect on the past year.
Consider your goals from last year. Document your achievements and those areas where you fell short. Did you meet those milestones you planned on? What might you change or improve so you can meet those important steps in the new year?
When it comes to income and expenses, did you have any unexpected expenses come up? Did you miss out on promising business opportunities due to financial constraints? Was your income level where you expected it to be?
It’s equally important to re-examine business habits through an unbiased lens.
Take a close look at how you currently set and track your business budgets. Are all expenditures meticulously accounted for? Do you track every source of income — active or recurring income as well as passive income?
Ensure your spending aligns with necessities essential to running your business or essential for generating income. Set aside funds in a business savings account so you can capitalize on opportunities as they arise and learn to say “no” when necessary, and redirect resources wisely. By creating strategic business partners, you can refer businesses, which can be another way to build a mutually beneficial business and even passive referral income.
Understanding your wins and shortfalls, as well as your current business habits, gives you the insight you need to make changes and set new achievable goals to reach for.
Step 2: Set Meaningful New Financial Goals
When it comes to defining your financial goals for the upcoming year, it’s crucial to set goals tailored to your own business needs and that you will be motivated to achieve. Not sure where to start? Here are a few examples to help tickle your brain:
- Boosting marketing efforts
- Expanding services
- Increasing client base
- Investing in professional development
- Increasing revenue
- Reducing expenses
- Boosting profitability.
Remember, creating personal and meaningful goals drives success and will help you maintain commitment toward those goals.
Step 3: Prioritize Debt Management
Regardless of your goals, addressing debt is a paramount part of business success. Debt can hinder progress and limit financial flexibility. Having the right tools, resources, and information at your fingertips to track and manage debt can help your business be more stable and financially successful.
Working with your bookkeeper and CPA is a great step, but personal accountability in debt management will result in greater success.
Additionally, using resources like Country Financial’s ‘Pay Off Web Calculator’ can help you determine whether to pay off high-interest debt or reinvest your money into the market.
Step 4: Budgeting Wisely
Implement a disciplined budgeting strategy. Track every dollar spent and ensure that expenditures align with essential business needs.
Make sure you have a budget for each operational function of your business. This will keep each cog in the system working both independently for accountability but in cooperation with other areas of your business. You may consider dividing budgets into:
- General Operations
- Innovation and Development
- Marketing and Outreach
- Mission-based Operations
A well-structured budget allows for better financial control and planning.
It’s also advised you work with an accountability partner or team to define your budgets and hold you, individual departments, and the company as a whole accountable to these budgets.
Step 5: Utilize Trusted Resources for Planning
Tapping into the wisdom of trusted resources can put you a strong and stable business path.
Learn from experts who provide invaluable insights into effective financial planning, help you see your strengths and weaknesses, and can provide strategies for growth unique to your vision, market, and your independent goals.
Carefree Bookkeeping and our strategic CPA partners provide you with reporting specific to your business and will highlight areas of your business that see the most growth vs. those areas that may be costing your business money.
Professionals like Andrew Stauff with M&E Catalyst can aid businesses with tax-saving strategies that grow revenue and propel business growth.
Ramsey Solutions provides sage advice and emphasizes practical steps in financial planning. They encourage entrepreneurs to create specific, measurable, and achievable goals and apply these principles to make their financial objectives clearer and more attainable.
SimplePractice outlines goal-setting steps that focus on clarity, organization, and accountability. These steps complement other strategies and provide a holistic approach to business planning.
Step 6: Capitalize on Opportunities
Ensure your financial plan accommodates unforeseen opportunities. When you set aside funds for more than emergency situations, this empowers you and your business to capitalize on those unexpected and otherwise unplanned possibilities that could propel your business forward.
Having a reserve for such opportunities can make the difference between stagnation and growth.
Kickstart your goals this year when you schedule a Discovery Call with the team at Carefree Bookkeeping.
Carefree Bookkeeping believes a well-thought-out financial plan is the foundation for business success. By reflecting on the past, reassessing habits, setting meaningful goals, and addressing debt strategically, you pave the way for a prosperous 2024.
By taking action on the steps above and partnering with Carefree Bookkeeping, you set the stage for a prosperous year ahead.