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At the end of the day, the financials are most important for the vast majority of businesses. A well-run company should have a financial plan, and there are several strategies for developing your business’ financial goals.
Consult the Owners
Things will be different if you work for a massive publicly traded company versus a small business.
If you’re the owner of a tiny business, the financial goals will largely depend on you. Many business owners see no need to prioritize expansion. Instead, they focus on serving their existing customer base and being a good employer.
On the other hand, if you answer to the owners of your firm, things are very different. Return-on-investment likely will be very important to them.
Marketshare is an important figure for large businesses and corporations. Sometimes it’s smart to sacrifice profitability for market share. It’ll hurt your competitors and you can use the increased sales to spend on things like marketing and research and development. However, growing too fast might make your company unwieldy to run. Some owners might want to keep their company a boutique firm.
Wall Street loves growth. If you work for a publicly-traded company, stock analysts might demand you focus on it. People like working for a growing company and in some ways, it’s a measure of company health and success.
You have to ask yourself, at what cost? Are you financing the growth with debt? That could hurt you in the long run. If your small business is rapidly expanding, you might be taking on more than you can chew.
New product market
If your business is in a new product market, you should try to capture as much market share as possible. Market leaders are often determined very quickly.
You have to consider your internal resources. Can your factory handle the increased volume? How is your staff holding up?
Although it’s fun to use blue-sky thinking, dreams are often in conflict in reality. Your competition and conditions will set limits on you. Make sure your goals are realistic.
Supply of funds
How much access to additional capital do you have? Can you tap the debt markets or ask investors for an infusion of cash?
If you have a lot of outstanding debt, maybe you shouldn’t focus on growth. Paying off debt might be a better decision than investing in a new marketing campaign.
Every business is unique. To develop your financial goals, you must look at each of these parameters.
A well-run business has a financial plan. There are many strategies for developing financial goals.