3 Reasons to Keep Your Finance Targets Realistic

If you’ve ever undertaken financial literacy training before, you’ll already have heard of SMART goals.

SMART goals are:

• Specific
• Measurable
• Attainable
• Realistic
• Timely

Sounds like common sense really, but too many businesses are guilty of overstretching resources by setting unrealistic financial targets. Sales teams become demoralised, cashflow is compromised, and basically the entire growth process put at risk. Here’s why aiming too high adversely affects a business: 1. Demoralised staff  You’re trying hard to accelerate success, but in the process your people fail to reach set targets and become demoralised. There’s a fine line between ‘good’ stress when targets seem slightly out of reach but achievable, and complete burn-out from trying to attain the impossible. 2. Risk of overtrading  Growth needs to be gradual in order to be sustainable. Overtrading continues to be one of the most common reasons businesses fail. A sharp increase in sales can bring with it an increase in costs which aren’t always factored in. 3. Cashflow problems  You’re making a healthy profit – great! But look at your cashflow and you’ll probably find it’s in a less than healthy state. Finance targets need to be set in direct correlation to a cashflow forecast. This keeps you on track and able to pay the bills at the month-end. It’s been said before – without enough cash there is no business. To learn more about financial goal-setting, hop on board with Colour Accounting. Find out how financial literacy training will revolutionise your business in just 2 days. It’s so simple to sign up. [traininglist slug=”colour-accounting-normal”]  ]]>