Matt's blog for business owners...
17th March 2017
The answer to this question is invariably ‘yes!’
So, with 2017 already rolling on, here’s how you change the ‘wanting’ into ‘doing’.
Let’s be clear about one point to start with…
The traditional method of setting goals and gauging the success of a business does not automatically provide you with what you need and want. In fact, as the business owner, it puts you last in the queue!
This is because business owners often target a level of income and profit without reference to what they need these targets to be.
They measure their success against arbitrary figures and at the end of the year if they do reach them, it’s goal achieved.
But actually, it’s a game of chance as to whether this level of income and profit gives them enough personally.
So the reality is they may successfully pay their team, keep the taxman happy, pay their suppliers and so on, but stumble when it comes to getting the level of personal remuneration they need from their business.
To change the situation you need to turn this process on its head.
You need to start with you.
An ‘upside down’ forecast allows you to do this. Here’s how it works:
- You work out what you want – calculate what you spend each month and add in the funds for your personal goals. This gives you the business profit you need after tax
- You work out your tax and costs – add in the money you need for your tax bills, your business overheads and cost of sales. This gives you the business turnover you need
- You break down the turnover you need into monthly, weekly, even daily targets.
You can now plan to achieve these turnover targets. And as these targets are directly linked to your personal goals, when you reach them you can be sure you can extract the level of funds you need for your personal goals.
The family holiday…
Your children’s school fees…
Your payments on your ideal home…
So if you want to put your personal goals first this year, make sure you introduce the Upside Down Forecast Model in your business.
If you would like to discuss creating an Upside Down Forecast further, do give us a call on 01249 712074. We’ll be pleased to discuss how you can kick off the forecast process.
Matthew Rogers, Director