In the Business Tools area is a living expenses form that you can use to set your first goal. It will help you establish what your family's financial needs are, so that you can set realistic business financial goals
To be successful in entrepreneurship, you'll need to set economic, personal and retirement goals that are concrete and actionable, in order to guide you in getting your new business off the ground.
Why is it that you want to start a small business? Money? Fame? Personal freedom? Ego gratification? Retirement income? Inability to get rehired or retrained? Discomfort with larger organizations? If someone were to ask you why you're going into business for yourself, what would you say?
For many people, it helps to translate expectations and desires into concrete terms by setting long-term goals. We've organized these into three broad categories: economic goals, personal goals and retirement goals. We'll discuss each of these in detail.
You should also remember that while it's good to have long-term goals, such as getting the business off the ground and helping it grow, you also need to set short-term goals relating to the formation of your business. Your short-term goals should be realistic and achievable. Examples include:
It will be important psychologically in those chaotic first months to be able to feel that you're making some progress. Short-term goals can help you achieve those small but crucial victories.
Obviously, you want your business to be a success. How you define success depends on a number of personal factors. Assuming you've been in the workforce for awhile, you know what kind of lifestyle you can afford on your current income. If you're like most people, you'd probably like to earn more. Many people feel that self-employment is the way to do it.
On the other hand, if you're just starting out and prefer running your own business, these factors probably won't affect your decision to any great extent.
Sometimes, it's economic pressures that cause a person to consider opening a new business:
When setting economic goals, remember that most businesses don't immediately produce profits for the owner. Be realistic about how long it will be before your new business becomes an established and secure source of income. Also be realistic when determining how long you can survive with your new business operating at a loss.
In the Business Tools area is a living expenses form that you can use to set your first goal. It will help you establish what your family's financial needs are, so that you can set realistic business financial goals
Money isn't the whole story, at least for most people. There's a certain satisfaction in "doing it yourself" that may not be quantifiable, but is important. Typical reasons that people choose to start a business include:
Most people look forward to a time when they can relax and enjoy themselves without the need to work. The chance to do what you want when you want to is a strong motivator. Admittedly, some people choose not to retire because they enjoy working. In fact, many successful small business owners work into their 70s and 80s. However, the vast majority of people look forward to retirement. Many strive to make it happen sooner rather than later.
Anyone who has spoken with a personal financial planner knows it takes a lot of money to retire and live comfortably. Many people believe they can do a better job of ensuring they'll have enough money for retirement if they're in charge of the source of their income.
In addition, a successful small business can provide more than just steady income saved for the future. Prior to retirement, you may be able to sell your thriving operation for a nice profit, or sell ownership interests to others, who then will run the business while you collect a share of the profits.
Goals are important because they will affect just about everything you do as you plan, start, and operate your business. Goals are not just the destination you're driving toward; they're also the painted white lines that keep you on the road.
You have a job that pays you $35,000. You hate your job and yearn to leave. You have an idea for a small business that involves servicing a small niche market, and you set a goal of being recognized as the expert in that niche area within five years.
You analyze your idea and discover that, while no one else is servicing that market, it's a small market and you're not likely to make more than $25,000 for at least the first three years. But you also discover that, because your business is unique and your chances of becoming a recognized expert are good, you'll have much greater income potential after the first three years. Despite the expected reduction in income for three years, you decide the risks are worth it and that you'll start the new business.
Goals play a prominent role in just about every decision you make along the way, from how you structure your business, to whether you hire employees, to how you sell and market your product or services.
Now that you have some idea of what your general goals are, the next step is to make those goals concrete by quantifying them. For example, it's not enough just to determine that you want to change professions or that you want to be your own boss. You need to develop specific targets by quantifying your goals.
Quantifying your goals can be a long process. You'll have to gather a lot more information before you're ready to set specific targets. Eventually, you'll probably want to put those goals together in the form of a business plan.
But before we move on to the process of getting that information, let's take a look at some of the guidelines you should follow when quantifying your goals.
Some people have a hard time setting goals because they just don't know where to start. If that applies to you, try this exercise. Start with an easily quantifiable goal. Start with the amount of money you'll need to earn in order to cover your basic living expenses. Only when you have met that need can you begin to look to other goals.