We spend so much of our lives planning. Planning our weekends, planning our next vacation, planning our dream home! Our businesses require the same type of diligent planning to achieve double-digit growth and success.
A financial roadmap will help you understand 3 things:
- Your current financial status
- Your direction – where are you headed? Where should you be headed?
- What actions do you need to take to reach your destination
Below are the 4 steps to a remarkable financial roadmap:
- Define your goals. What is your end game? Do you want double-digit growth for your business? Do you want to purchase another company to grow your market share? Before you take on a road trip, your need to plan out your route. This is no different. Creating your short-term and long–term goals is key to growth. Your goals should be quantifiable and achievable. You’ll also need to define a timeframe to achieve your goals and not leave it open-ended.
- Track/gather your information and analyze it. Knowing where you are today is very important. How much money are you bringing in and how much is going out? What are your fixed monthly expenses? How much cash do you have? How much can you invest to grow the business? Understanding your current financial status is key to mapping out where you are going. Don’t underestimate this level of planning, which is all very common. The future of your business is built on your present success.
- Development of the financial roadmap – Writing a financial roadmap is much easier than you think. Develop concrete objectives. Don’t make initiatives too big but break them into bite-size so that you move quickly. Identify the key challenges you are currently facing and strategies to mitigate them. Evaluate how much risk you are willing to take. Identify a timeline to achieve your goals and objectives
- Execution– Get to work! The plan is not effective unless it’s acted upon. Measure your results often by utilizing financial statements to make sure you are on the right track.
The financial roadmap should not be a once-in-a-lifetime activity. Keep it fresh! It should be an integral part of your business that ebbs and flows as the business changes. Done right, a financial roadmap will get you to your destination much faster.