ATB Entrepreneur Center

Financial milestones for seasoned entrepreneurs

Written by ATB Entrepreneur & Small Business | Nov 20, 2023 4:21:14 PM

Making your first dollar. Selling to your 100th customer. Hiring your first employee.

These are milestones you’ve already hit as an established entrepreneur—but have you thought about subsequent ones?

Although milestones and timelines vary for every business owner, these are common achievements that might happen later in your entrepreneurship journey.

Common financial milestones for business owners

  • Having a repeat customer: This confidence boost demonstrates that you have done quality work, made the experience personal, know what your customers value and prioritized brand loyalty by building relationships.
    This repeat client might carry more weight depending on the industry or product cost. For example, having a customer buy another car from your dealership years later means more than them buying another pack of gum from your convenience store.
  • Celebrating your first profitable month: Eventually, the time comes when you make enough money to pay monthly expenses and have some left over. 
    For example, maybe you are a restaurateur who needed a loan for renovations and upgrades to a new location, and it took time to build your customer base. Your first profitable month might look different from someone who runs their online education business from home with fewer expenses. 
    Maybe that work-from-home educator gave away freebies for the first few months—losing money—but later landed high-paying customers. The first profitable month is different for everyone and depends on factors like startup costs, overhead and financing.
    Regardless of your circumstances, celebrate when you generate more than you lost. Now, how do you recreate that success every month?
  • Hitting a general revenue target: What is your realistic sales goal and deadline? The amount will be different for each industry and business. For example, you might celebrate your first $100,000 in revenue. Or maybe you celebrate surpassing a specific percentage increase.
    You can track growth by comparing your net profit (money made after subtracting the Cost of Goods Sold and all general expenses) to previous months or years. A best practice is using net profit as a growth indicator because it reveals if you’re running a healthy business.
  • Paying your first dividend to shareholders: Once you make profit, this is the first time you can reward investors for banking on you. This milestone is a reminder that what you’ve been doing is working.
  • Paying off your loan: Without impending debt, this milestone offers freedom and a chance to direct those payments to different endeavours that may help your business grow further.
  • Selling or closing your business: Regardless of the timeline, it’s important to have an exit strategy in mind when you start your business because your end game might influence how you build it.

 

The milestone every business should celebrate

A milestone that every entrepreneur goes through—no matter your business—is tracking and celebrating year-over-year growth. This is the most common and exciting way for owners to witness and recognize progress. Year-over-year growth is usually measured in gross revenue (grand income total) or net profit (gross revenue minus expenses).

Gross revenue tells you if your business has grown in its marketplace. Net profit demonstrates if you are running your business efficiently—and if you’re actually making money.

Don’t lose track of your finances

When you re-evaluate your goals after reaching a milestone, keep the SMART acronym in mind. Are your goals still Specific, Measurable, Attainable, Realistic, and Timely?

One of the biggest mistakes established business owners make is losing track of their finances—thinking, “Money is coming in, money is going out, the doors are open every day, and the bank is not calling me, so we must be OK.” But having those goals predefined for each year and staying on top of your finances enough to know when you hit them is a must for all business owners.

Every quarter, we recommend:

  • checking on your goal progress
  • meeting with your accountant. They will interpret your numbers and point out possible warnings—like spending too much in one area—and opportunities to save money.

 

Conclusion: Mind your child

Building a business is a bit like raising a kid. You need to keep a close eye on them so they don’t wander in their own direction. You, as the business owner, are the parent who has to be aware of what your company needs as you approach and achieve different milestones, so watch for cues that you need to provide more time, support or nurturing.