• Just like with your personal finances, business finances need to be managed. 
• But as a business owner or entrepreneur, it can be hard to know where to start with setting business goals. 
• That’s where this guide comes in: We’ll cover all aspects of setting financial goals for your business and creating the right financial New Year’s resolutions to start your next year off on the right foot.

Understand Your Current Financial Health

Before you can set financial goals for business, you’ll need to know where you’re starting from. 

Take a look at your financial statements, like your:

• Income statement (profit and loss statement): This document shows your revenue, costs, and expenses over a specific period, resulting in either a profit or loss.
• Balance sheet: This provides an overview of your assets, liabilities, and equity at a particular point in time.
• Cash flow statement: This tracks the flow of cash in and out of your business, helping you understand how changes in balance sheet accounts affect cash and cash equivalents.

Connecting to Nav’s Cash Flow Health tool is a simple way to get a clear idea of your current cash flow and overall financial situation. 

Strive to Set Clear Financial Goals

Setting financial goals that everyone understands is essential for your success in the coming year and beyond. Financial goals help provide direction, measure progress, and ensure the long-term sustainability of your business. 

Here’s a step-by-step guide on how to set financial goals for your small business:

1. Understand your business objectives: These could include increasing market share, expanding to new markets, launching new products or services, or improving operational efficiency.
2. Define specific and measurable goals: Make your financial goals specific, measurable, and attainable. Instead of a general goal like “increase revenue,” specify by how much and in what time frame. For example: “Increase monthly sales by 15% within the next fiscal year.”
3. Prioritize goals: Rank your financial goals in order of importance. Some goals may be short-term, while others are more long-term goals. Prioritizing helps allocate resources effectively.
4. Create a time frame: Assign specific time frames to your goals. This helps create a sense of urgency and provides a timeline for tracking progress. For example: “Reduce operating costs by 10% over the next six months.”
5. Involve key stakeholders: Make sure that executives, managers, and financial advisors are all involved in the goal-setting process. This ensures that the goals align with the overall vision of the company and gain support from those responsible for implementation.
6. Monitor and evaluate progress: Establish a system for monitoring and evaluating how close you are to meeting your goals regularly. Use key performance indicators (KPIs) to assess how well your business is meeting its financial goals. If necessary, adjust goals based on changing circumstances.
7. Review and revise: Regularly review and, if needed, revise your financial goals. Business environments are dynamic, and adjustments may be necessary to adapt to market changes or internal challenges.
8. Celebrate achievements: Celebrate milestones and achievements along the way. Recognizing and rewarding progress helps maintain motivation and reinforces a positive culture within the organization.

Budgeting and Expense Management

Creating a business budget and managing expenses along the way should be on the top of your list of financial success goals for 2024. Budgeting provides a roadmap for how to best dole out resources and identify weak points.

By establishing a budget, your business can prioritize projects, investments, and operational needs, which helps you make smarter decisions. Additionally, a well-structured budget helps you evaluate your business’s performance and make informed adjustments.

Expense management is equally essential — it puts you in the driver’s seat in terms of controlling and monitoring costs within your business. Managing costs efficiently involves tracking and analyzing expenses, identifying where you’re overspending, and putting strategies in place to stop unnecessary buying. This practice helps your business maintain a healthy bottom line by making sure funds are used for effective activities rather than being wasted. 

Effective expense management is particularly critical during periods of economic uncertainty or market fluctuations, since it allows businesses to adapt quickly to changing conditions and remain competitive in the marketplace. 

Increasing Revenue Streams

With inflation not expected to go down for a while, it’s important to try to bring in new streams of revenue next year.

Add new options

One effective strategy involves diversifying products or services to appeal to a broader customer base. You can do this through innovation, market research, and identifying unmet needs in the target market. By introducing new offerings or expanding existing ones, your business can attract different customer segments and capitalize on emerging trends. 

Example: Your bakery decides to add a popular new item like vegan baked goods to the menu to draw in a new customer base.

Target existing customers

Cross-selling — or selling other products to the same customer — and upselling — or encouraging customers to upgrade — are also effective methods to increase revenue. Encouraging customers to purchase additional products or premium versions of existing ones can significantly boost overall sales.

Example: You sell three tiers of a food subscription box and you promote a campaign for customers to upgrade to the higher tier. 

Reach new markets

Another approach to increasing revenue involves expanding the business’s reach through new market entry or geographic expansion. This can be achieved by targeting untapped markets or exploring international opportunities. Conducting market research to understand the demand, competition, and cultural nuances of new markets is essential for a successful expansion strategy. 

Leveraging online platforms and e-commerce can also extend a business’s reach, enabling it to connect with customers beyond its traditional geographical boundaries. Collaborations and partnerships with other businesses can open up new channels and customer bases, creating synergies that benefit all parties involved.

Example: Your clothing boutique starts an online store and begins to ship internationally to find new customers overseas.

Cash Flow Management

Another great business goal is to be more on top of your cash flow. Cash flow management is crucial for a business’s financial health since it ensures you have enough cash on hand to cover operational expenses, pay bills, and invest in growth opportunities. Managing your business’s cash flow also helps prevent disruptions in day-to-day operations and provides the flexibility needed to navigate unforeseen challenges or capitalize on strategic initiatives. 

Nav’s Cash Flow Health tool can give you the big picture of your cash flow in minutes. See how much money is coming in, how much is going out, and your net cash flow — across an unlimited number of accounts. You can also set alerts to let you know when your account is low and connect with funding before you need it, all from Nav.

Debt Management and Reduction

Effective debt management and reduction are crucial for the financial health and stability of businesses. Excessive debt can lead to financial strain, impacting a company’s ability to invest in growth opportunities, meet operational expenses, and respond to unexpected challenges. By actively managing debt levels, businesses can improve their financial flexibility, ensuring that they have the capacity to navigate economic downturns or capitalize on strategic initiatives without being burdened by high-interest payments.

If you don’t have enough in your savings account for an emergency fund, you might want to make that your number one saving goals. Having cash in case of emergencies is a smart goal.

However, not all business debt is considered bad. Just like there are student loans that are generally considered “good” personal debt, there is helpful business funding that can help you grow and offer benefits that far outweigh the costs. You just want to make sure you only take out what you need and what you can afford to pay back.

Business and Monitor Business Credit

Your business credit scores can affect supplier terms, business loans and financing, as well as opportunities. Establish and build business credit to open up opportunities for your business. 

Building strong business credit takes time but pays off when you need funding. Get tradelines—accounts that report to business credit—then pay them on time. As you establish a pattern of timely payments, you’ll likely qualify for better credit terms and lower interest rates.

Monitor your business credit on a regular basis to check your progress, and to alert you to any potential problems.

Building business credit separate from your personal credit helps protect your personal assets and creates more funding options as your business grows.

Nav can help. It’s the only place where you can build, manage and monitor your business credit, and personal credit, in one place. 

Investing in Growth Opportunities

Investing in business growth opportunities is a great goal for this coming year. It helps your business to expand its market presence and reach new customers. 

A few ways to do this are:

• Launching new products
• Entering untapped markets
• Franchising
• Marketing your business
• Joining an ecommerce platform
• Expanding existing offerings
• Upgrading your existing infrastructure
• Partnering with another business

Growth investments can result in increased revenue streams. This expansion is critical for businesses looking to stay ahead of the competition. Also, strategic investments in growth contribute to innovation and operational efficiency. Allocating resources to research and development, technology upgrades, and employee training enables a business to stay at the forefront of industry trends and advancements. 

Innovation not only helps in creating new revenue streams but also enhances the quality of products and services, thereby improving customer satisfaction and loyalty. Investing in operational efficiency, such as streamlined processes and infrastructure upgrades, not only reduces costs but also positions the business for scalability. By continually seeking and investing in growth opportunities, businesses can foster a culture of adaptability, innovation, and sustainability, ensuring their relevance and success in a dynamic and competitive business environment.

Financial Planning for Long-Term Success

The end of the year is the perfect time to evaluate your business’s operations and offerings to see how you can make it more effective and how exactly to reach your goals for the new year. Financial planning provides a roadmap for your business’s financial future, helping to set clear goals, allocate resources efficiently, and anticipate potential challenges. 

By forecasting revenues, managing expenses, and making informed investment decisions, financial planning fosters stability, resilience, and adaptability, contributing to your business’s sustained success over the long term.

Leveraging Financial Tools and Resources

You don’t have to reinvent the wheel — there are many resources and tools available that will help you run your business. Consider offloading the work you don’t enjoy with one of these tools next year:

• Business bank accounts
• Business formation services
• Business tax and accounting help
• Merchant services
• Payroll services

If taking on small business loans or business credit cards with the right lender or provider is in your plan for next year, Nav Prime can help you build business credit history. A solid business credit score can help you qualify for better funding. Learn how to establish business credit in this comprehensive guide.

Recap: Financial Goals Examples for Your Business

Use this checklist as a guide to set goals relevant to your business. 

Revenue goals

• Increase monthly sales by 15% within the next fiscal year
• Add a new product line to attract different customers (like adding vegan options to your bakery menu)
• Encourage existing customers to upgrade their purchases (such as moving subscribers to a premium tier)
• Start selling through a new channel (like adding an online store to your physical shop)

Cost management goals

• Reduce operating costs by 10% in six months
• Cut unnecessary expenses after reviewing monthly statements
• Negotiate better rates with suppliers
• Switch to more cost-effective tools or services

Cash flow goals

• Maintain a specific minimum bank balance (like $5,000) at all times
• Build a three-month emergency fund for business expenses
• Reduce the average time to collect customer payments
• Set up automatic bill payments to avoid late fees

Growth investment goals

• Set aside 10% of monthly profits for business expansion
• Upgrade key equipment or technology
• Invest in employee training
• Launch marketing campaigns in new areas

Debt management goals

• Pay off one business credit card by year end
• Refinance high-interest business loans
• Keep business credit utilization under 30%
• Build your business credit score

Planning and organization goals

• Review financial statements monthly
• Create and stick to a business budget
• Set up a separate business bank account if you haven’t already
• Meet quarterly with a financial advisor or accountant

Frequently Asked Questions

How do you plan for the New Year financially? 

Start by reviewing your past year’s financial statements to understand what worked and what didn’t. Set clear revenue targets and create a realistic budget that accounts for both regular expenses and planned growth. Make a list of major purchases or investments you’ll need, and break down your annual goals into monthly targets. Most importantly, schedule regular times each month to review your progress and adjust your plan as needed.

What is the financial aim for a new business? 

For most new businesses, the primary financial aim is to become profitable while maintaining steady cash flow. Focus first on covering your operating costs and building an emergency fund that covers 3-6 months of expenses. Set realistic sales goals based on your market research, and plan to reinvest a portion of early profits back into the business. Your initial financial targets should be conservative and focused on stability rather than rapid growth.

What are the financial goals of a business plan? 

A business plan typically includes several key financial goals: reaching your break-even point, achieving profitability targets, maintaining healthy cash flow, and securing adequate funding for operations and growth. Your plan should specify expected revenue, profit margins, and major expenses. Include both short-term goals like monthly revenue targets and long-term goals like market expansion or equipment purchases. These goals guide your business decisions and help measure your company’s success.

How do you get your finances in order for the New Year? 

Start with a thorough financial cleanup. Update your bookkeeping system, organize tax documents, and review all recurring expenses. Create separate folders for important financial documents like contracts, invoices, and receipts. Look for subscriptions or services you no longer need and cancel them. Set up a filing system for the new year that makes it easy to track income and expenses. Consider meeting with your accountant to discuss tax planning and any changes that might affect your business in the coming year.