With the new financial year upon us, businesses are busier than ever, looking at their successes and sometimes failures from the previous year.
Goal setting can be a way of optimising strengths and minimising weaknesses and risks. As one of Australia’s largest General Insurance businesses, we understand the importance of this for setting up your business for success.
Why is Goal Setting important?
More and more research has been carried out to uncover why goals work, performed by psychologists at the cutting edge of why goal setting is important.
Before we head into some of our best tips for how you can set winning goals for the financial year ahead, it’s important to remember that all goals are important.
As with any type of goal setting, it’s crucial to include varying goal levels for the best chance of success.
Setting out some achievable short, medium, and long-term financial goals means you can tackle various issues and challenges.
Short-term and medium-term financial goals can also help to pave the way to attain the more long-term objectives you are likely striving for.
Setting achievable goals will help to create the right environment for success and develop your business year on year.
Short, mid and long-term financial goals
When looking at short, medium and long-term goal planning, one important factor is to ensure you record and track their progress.
Without proper strategies to monitor and review your financial year goals, you may find that your goals and their outcomes will become unachievable.
Creating a clear goal plan for the new financial year can help you view the company’s direction more clearly and, more importantly, keep everyone accountable.
Many business owners struggle with where to start when determining how their company will head in the new financial year.
A good place to start us is by deciding what it is you want to accomplish, and secondly, do they stack up? Consider the goals that can help to drive your company forward during the coming financial year and begin to see results.
When considering financial goal-setting, diving into the bigger picture is easier. Although an overview and vision are crucial, make sure you spend some time planning medium and smaller wins.
1. Categorise Each Financial Goal
Any financial goals put in place by Australian businesses and those around the globe should be specific. This will ensure that when you hit your milestones, they will help your company become closer to its vision.
According to experts, the difference between financial goal setting that wins or loses is how those goals are designed.
It could be said that the crucial difference between success and burnout often comes down to how defined the goals are.
Whether short, mid or long-term goals, a general outline will not help your business go forwards as you’d hoped.
Identifying each goal is crucial to ensure it’s robustly built into your financial plan.
If goals are specific and categorised, they will help your business to reach its end game and the ideal future.
A good place to start is by categorising them in terms of short, mid and long term. This means you will hopefully get some quick wins that can help to forge a path to the larger company aims.
As a quick guide, you can look at it as
- Short-term financial goals – six months to five years
- Mid-term financial goals – five to 10 years
- Long-term financial goals – over ten years
2. Set a Target Date for Each Goal
Simply discussing financial goals won’t help you achieve your goals without making sure each goal has an achievable delivery date.
The different types of goals can be a varied journey, and it’s important to have hard dates in the company diary for the optimum time you want to see them reached.
Merely discussing how the company would like to see an increase in revenue won’t help achieve those wins, regardless of the company's size or goal.
Being more specific will give you a better chance of achievement. So, for instance, setting a financial goal with a date will more likely focus the resources, attention and crucially, the energy in making sure the goal is realised.
3. Prioritise Each Financial Goal
Recent research finds that by prioritising goals, you can boost productivity and minimise stress and save time.
After assessing the last financial year, you can set new financial goals.
A company overview from staff will help financial controllers find out the successes and any plans that were ultimately ineffective.
This intel can help prioritise your financial goals going forward to help promote growth within the new financial year.
Any activities which were not successful could be investigated further and a new goal put in place for the new financial year as a priority.
Often resources will need to be shifted to areas of weakness to fulfil those priorities.
A few areas of business that sometimes need improvement along with insurance goals are
- Risk management
- Overall operations
Prioritising weak areas should be followed up with a detailed plan of action.
4. Pay Off Debt
Assessing debt is often one of the first steps in making a better plan for the next financial year. Getting a clear picture of any shortfalls and the types of debt the company has will help to forward repayment plans.
Firstly, check you have the right ratio of debt to income which means you can understand more fully if there is the working capital available to tackle those debts.
It’s important to make sure you pay loans or other business debts in time; otherwise, more costs may stack up, not to mention credit issues.
It could be that you might be able to create some extra financials to start your debt paying off prices. Maybe you could downsize office space, or some staff members can work remotely.
There could also be extra equipment you may be able to sell or make saving on supplies by negotiating with vendors a priority.
5. Review Insurance Coverage
Although many Australian companies spend time and energy ploughing through budgets and business forecasts, refining business processes and creating crucial department objectives, many companies often fail to plan effectively for risk and ongoing insurance goals.
Taking time to talk through business insurance coverage with other strategic business leaders can help you avoid potential unforeseen roadblocks you might encounter.
Often the mitigation of risk can be overlooked by smaller or medium-sized businesses and can often be seen as a burden on time when it seems other priorities are more pressing.
Businesses of all sizes must make sure they plan effectively for any future situations that could potentially damage their reputation and reduce profit.
Getting insurance advice you can trust and reviewing your insurance coverage is crucial to help plan for any risks.
Talk to an Insurance Adviser
To help you plan effectively any business risks and review insurance plans for the new financial year, find your nearest adviser.
This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice.
We strongly recommend that you consider the suitability of this information, in respect of your own personal objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.