New financial year goals for sole traders: Setting achievable financial targets

Jan 17, 2025 | Business planning

As the new financial year rolls around, it’s the perfect time for sole traders to reflect on their business performance and set actionable goals for the year ahead. But setting realistic goals isn’t always as easy as you might think. Here are some practical steps to help you set achievable financial goals as a sole trader.

Reviewing your past performance 

Before you jump right in and think about what you want to achieve in the future, it’s important to take a step back and consider what you achieved in the past year. Such a reflection will help you understand which of your plans worked, what didn’t, and where there’s room for improvement. Here’s how you can approach it:

  • Analyse income and expenses: Carefully review your financial statements to identify trends in revenue and spending. Look out, especially for opportunities to cut unnecessary costs and invest in areas that have potential and drive growth.
  • Assess profit margins: Calculate your profit margins to ensure your pricing is sustainable and competitive.
  • Evaluative key metrics: Pay attention to other key metrics, such as customer acquisition and retention rates, to gain additional insights into your business’s health.

You can only build a plan when you know what ground you’re standing on. But once you know where your business is financially speaking, you can begin planning for the next year.

Setting realistic income and expense goals

When setting financial targets, you should aim for goals that are ambitious yet achievable: ambitious so they drive you forward and drive significant growth but achievable so you’re not constantly feeling disappointed and unmotivated. To achieve your goals, you need to think about two key factors:

First are your income goals. You’ll want an income goal and build strategies to help you get there. It’s especially helpful to break your target down into smaller monthly or quarterly goals, making it easier to track progress and adjust strategies as needed.

Then, there are your expense goals, but it might be easier to think of them as a budget rather than a goal. Create a detailed breakdown of all your expected expenditure, accounting for fixed costs (like rent and insurance) and variable costs (like supplies and marketing). It’s also important to budget in a reserve fund for unexpected expenses to avoid cashflow disruptions.

But business planning is about more than income and expenses. It’s also about opportunities – which have the potential to boost income and most definitely will increase expenditure. But the same rules apply: whether you’re thinking of expanding your customer base, introducing a new service or product, or looking to implement a new pricing plan, set targets that are ambitious but achievable.

Improving cashflow management

There’s no better time than the start of a new financial year to review your cashflow management strategies. Here are some of the most important actions to consider as you aim to reach your achievable financial goals:

  • Invoice promptly: Send invoices as soon as work is completed and set clear payment terms to reduce delays.
  • Follow up on payments: Don’t hesitate to follow up with clients who miss payment deadlines. Accounting software with automated reminders can be especially useful here.
  • Monitor cashflow regularly: Use tools like spreadsheets or accounting software to track cash inflows and outflows. Regular monitoring helps you spot potential shortfalls early.
  • Build a buffer: Aim to maintain a cash reserve that covers at least three months of expenses. This can help you weather slow periods or unexpected costs.

Planning for taxes

Tax should never be something you just worry about at the end of the financial year. It should be a strategy you revisit over the course of the year to ensure you can avoid surprises and claim all reliefs available to you.

You should speak with your accountant about an in-depth plan, but for now, you can do the following:

  • Practice good financial management: Organise all invoices and receipts related to your income and outgoings. This will make reporting your income and expenses for tax purposes much easier.
  • Claim allowable expenses: Ensure you claim all eligible business expenses to reduce your taxable income. Again, keep detailed records to support your claims.
  • Set aside funds: Regularly set aside a percentage of your income for taxes. Consider opening a separate savings account to keep these funds accessible but distinct from your operating cash.

Staying on track and remaining motivation

Once you’ve set goals and started focusing on your cashflow and tax strategies a little more, you must stay on track, which requires consistent effort. You can use tracking tools to help you, including accounting software, budgeting apps and project management programs. Never be afraid of changing goals or tactics if something is clearly not going well – or you spot an opportunity you hadn’t considered before.

But one thing that is often overlooked in business planning is how to stay motivated. The last thing your business should feel like is a chore – it should always be your passion project.

Milestones are really useful when it comes to motivations – and the celebrations that should go along with their achievement. You might also want to connect with other sole traders or join business groups to share experiences, tips and encouragement. We’re more connected to people than ever in our digital world, so make full use of it.

Running your own business is hard but we’re here to help. We’re expert accountants with a passion for helping ambitious owners like you with achievable financial goals.

Get in touch with us today. 

Ready to go? We’re excited to hear from you.

Let’s get started, as soon as you’re ready. We’re always up for a chat about how we can support you and your business.

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