“Money, Money, Money”… ABBA said. Well, it just isn’t that simple.
There’s a wealth of planning needed before you hit those business financial goals, and it starts with aligning financial goals with strategy.
Laying down the foundations by aligning your business strategy with your financial goals is the best way to make sure you are on the right track
Whether you’re trying to boost margins, control costs, or fund your next stage of growth, your goals should always support where the business is headed next.
Let’s break down the types of financial goals you should consider, and how you can make sure finances go hand in hand.
How to Set Financial Goals for a Business: The 4 Core Types
Before you can align your goals with strategy, you need to know what kinds of financial targets actually move the dial. Here are four core categories that every business owner should be considering:
1. Revenue Targets
It isn’t just about growth for growth’s sake. A revenue goal should tie directly to your sales capacity, customer pipeline, and market demand. For example, increasing turnover by 15% might require boosting your lead conversion rate or expanding into a totally new region.
This is usually the main character: how much your business aims to earn over a set period.
2. Profit Margins
A growing top line doesn’t mean a whole lot if your bottom line isn’t keeping pace.
Setting margin goals, both gross and net, ensures your growth is sustainable. If you’re launching a new product, for instance, you’ll want to define acceptable margin thresholds before scaling.
3. Expense Control
Cost targets aren’t just about slashing budgets left, right and centre. They’re about prioritising what truly matters to your business.
You might aim to reduce operational costs by 10% without compromising on customer service. Setting targets around cost efficiency can free up capital for strategic reinvestment.
4. Growth Goals
These are the fun ones: the goals that reflect your big future ambition.
Whether you’re targeting new customers, hiring talent, or even opening a second location, these goals typically come with a financial figure attached. The key is to pair each one with a supporting revenue or funding plan to make sure the ambition is realistic.
Aligning Financial Goals with Business Strategy
Now for the magic bit: aligning financial goals with strategy.
It’s easy to list numbers, but much, much harder to connect those numbers to the bigger picture. Start with your business strategy:
What are you trying to achieve in the next one, three, or five years?
Let’s say your strategy is to grow your market share in a new region. Your financial goals might include:
- A specific revenue target from that region within 12 months
- Marketing spend allocated to brand awareness in the area
- A break-even projection on expansion costs within 18 months
Each financial goal should be a stepping stone that supports a strategic objective. If it doesn’t move the business toward your vision, it’s not a goal; it’s a side quest not worth following!
Similarly, if your focus is on improving operational efficiency, your financial targets might centre on cost-to-revenue ratios or reducing supplier overheads. These numbers become a measure of whether the strategy is working, not just how much you’re nailing sales.
Aligning financial goals with strategy also helps with internal clarity.
Your team is far more likely to engage with the numbers when they understand how those targets link to broader business outcomes!
Happy team, happy life!
Tracking Progress (and Knowing When to Pivot)
A goal is only useful if you’re tracking it. Otherwise… what’s the point? And that doesn’t mean revisiting it once a year when you’re updating your business plan.
1. Use Key Performance Indicators (KPIs)
Set KPIs for each goal so you can see what’s working in real time.
For example, if your goal is to grow monthly recurring revenue (MRR), track churn, average revenue per customer, and pipeline velocity alongside it.
2. Make Reviews Routine
Set a monthly or quarterly cadence to review your financial goals. You don’t need to overhaul the strategy each time, just assess whether you’re on track and what’s changed. Regular reviews also help you catch early signs of trouble (or opportunity) and act before it’s too late.
3. Stay Agile
We all know: markets shift. Costs rise. Customers change behaviour.
Don’t be afraid to adjust your financial goals if the strategy needs to pivot. Holding onto a target that no longer fits is like holding onto old socks that really need to go in the bin. The aim is alignment, not rigidity.
Ready to master how to set financial goals for a business and ensure they stay perfectly aligned with strategy?
You can contact us here to arrange a zero-obligation initial meeting! Let’s get that ball rolling.
Setting clear, strategic financial goals doesn’t have to be a game of Guess Who. We’ve created a simple Goal-Setting Worksheet that you can download here to help you map out what matters most, align it with your strategy, and track your progress month by month.
