What Financial Goals Can Help You Succeed in 2016?
A recent study, The Principal Financial Well-Being Index, found that business owners generally have positive vibes about where they stand financially. Almost half are optimistic about the 2016 economy—and with good reason. Sixty-four percent feel their financials have improved significantly or somewhat from last year, and 74 percent have built a surplus of cash.
I asked three small-business owners—Sarah Jacoby, owner of dance center Studio 9 in Poughkeepsie, New York; Jenne Myers, CEO of nonprofit Chicago Cares in Chicago; and Vick Vaishnavi, CEO of software firm Yottaa in Boston—about their financial preparation and goals for 2016, as well as their anticipated results.
In terms of your business, what does financial success mean to you?
Sarah Jacoby: As business owners, we all have our ups and downs throughout the year, but I feel I am successful because, overall, I have maintained a flourishing atmosphere as far as cash flow, employees and financial growth. The studio is debt-free and is solidly in the black.
Jenne Myers: Although we are a nonprofit, it’s important at the end of the day that we’re in the black, not in the red. Our donors want to have confidence in our financial status, which means that we want to have a surplus. We also place a really high importance on having an engaged volunteer and donor base. The more invested they are in our work, the more they feel responsible for our success, and the more willing they are to contribute and advocate to their networks on our behalf.
Vick Vaishnavi: Since Yottaa is in a very high growth market, we measure financial success strictly in terms of maximizing revenue performance. In order for us to do so, we must execute at a very high level across all functional areas of the company.
What are one or two financial goals you’ve set for your business in 2016?
Myers: Our main goal is to diversify our funding. Unlike most nonprofits, we get about 75 percent of our funding from corporate sponsors. In 2016, we want to continue to diversify our revenue streams, including events, individual giving and grants. While our corporate partners will continue to be key to our success, we want to make sure that we’re more stable and sustainable by having a wide range of funding sources.
Vaishnavi: Our financial goals for 2016 are to grow revenue by 100 percent, significantly increase the annual contract values of our deals and double the headcount for the company.
Jacoby: I would like to open a fourth location to better serve the large Hudson Valley area. Financially, this expansion will include startup costs, daily operations for the first six months and any unforeseeable expenses. I also want to increase my staff and instructor pay and compensation packages.
How did you come up with these goals? Did you receive advice from a financial planner?
Vaishnavi: We established our 2016 financial goals following multiple internal planning sessions with our executive management team. It’s critical that we aggressively scale the company to stay ahead of the competition. Our stated goals will ensure that we end 2016 with tremendous revenue performance and a leadership position in the market.
Jacoby: No financial planners here. Both goals simply came from a place of wanting to offer the best service possible to our community. This means expanding so we can be closer to certain customers, and rewarding my staff for all of their hard work thus far.
Myers: We have a board of directors that acts in an advising capacity. This goal was created with the help of our board and our combined knowledge of our industry landscape and where things are headed.
What steps will you take to ensure that these goals come to fruition?
Myers: We’re taking the long view, planning to grow new revenue streams by focusing more staff time on things like events, individual fundraising and grant writing. We’re also building on our existing relationships with our board, volunteers and donors, and communicating our successes and our needs back to them. In addition, we’re actively growing our pipeline of both individual and corporate donors.
Jacoby: I’ve already been location hunting for six months and have been putting aside 20 percent of profits in order to be able to cover startup costs and overhead costs for the first six months. As the business continues to grow, I ultimately view my staff as my first customer. As we get busier and they are asked to do more, I want to be able to increase their stake in the business. I intend to roll out a rewards program that provides instructors with a percentage of services.
Vaishnavi: We will continuously monitor sales planning and execution throughout the year to ensure that we reach our revenue goals. This will involve regularly examining operating metrics to make sure we are on the right track. We will also continue to innovate for our customers and provide them with technology solutions that will give them a competitive advantage in their markets.
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