Financial strategy is the hurdle most businesses struggle with. The key to your business vision is to align it with a clear financial strategy to make your goals a reality. A business vision is what you want your company to look like in the future.
Creating a business vision statement is something you can do at any stage of your entrepreneurial journey – but the sooner, the better. There are successful companies that have clear visions. Tesla exists to be the most compelling electric car company, while Google exists to organize information and make it accessible to everyone.
Once you have your business goals, it’s time to start developing your financial strategies.
How to Set Your Business Goals
Your vision is an overarching goal, it’s the purpose of your business and where it’s heading in the future. The only way to get to that future is by being proactive. You should have short, medium, and long-term business goals that align with your vision. Every goal should take you one step closer to making that vision a reality.
PayPal is a service most of us use every day. It revolutionized ecommerce and international money transfers. PayPal’s business strategy was all about being a disruptor and challenging the status quo.
Partnerships became a core part of its business goals, allowing the company to achieve its vision. Its partnership with eBay helped PayPal grow to have over a 50% market share in the payment processing industry.
Financial Strategies for Achieving Your Business Goals
Don’t overcomplicate your financial strategies. For most businesses, there are four key financial strategies: budgeting, cost management, forecasting, and investment. Use these four elements as the backbone of your financial strategies to achieve your business goals.
Having these financial strategies in place ensures you have adequate cash flow, can invest in future development, and understand where your company is going. That’s why it’s important to have key performance indicators (KPIs) to keep on top of your finances. If finance is a skills gap for you or your team, a fractional CFO could be the missing piece.
One of the most successful financial strategies for achieving business goals is profit reinvesting. Apple is the tech giant it is today because it put its profits into research and development. Products like the iPhone, Apple Watch, and MacBook wouldn’t exist today without this financial strategy.
How to Implement Your Financial Strategies
Once you identify your financial strategies, it’s time to start implementing them. Context is everything in finance. No two companies will ever have the same financial strategies and implementation.
If you struggle to navigate your way around finances, it’s a good idea to work with a professional. A fractional CFO is a cost-effective way to get industry-leading financial advice without hiring a full-time accountant or executive.
Implement your financial strategies by setting KPIs. These KPIs will help monitor the performance of your strategies, allowing you to adjust them if necessary. You might start with a strategy of reinvesting 10% of profits into product development.
While this might work for a few months, you might uncover that you can afford to redirect more funding to investment. Be flexible, but always keep your budgeting and cash flow in mind.
Financial strategies are only part of the journey.
Perseverance and resilience will enable you to achieve your business goals. Align your financial strategies with your short-term and long-term goals, bring your business vision to life, and stay resilient.
