2027 Planning: Financial Goals for Small Businesses

A new year is an opportunity for a fresh start—new goals, renewed focus, and better results.

But hope isn’t a strategy. Successful businesses plan their year intentionally, setting specific financial goals and mapping how to achieve them.

Here’s how to build your financial plan for 2027.

Why Annual Planning Matters

The Power of Intention

Businesses that set clear goals outperform those that don’t. When you know where you’re going:

Every decision has context
Priorities become clear
Progress is measurable
Motivation stays strong

Looking Back to Move Forward

Before planning 2027, understand 2026:

What was your revenue?
What was your profit?
What worked well?
What disappointed you?
What did you learn?

Honest assessment of the past informs realistic plans for the future.

Planning Is Not Predicting

Your 2027 plan isn’t a guarantee—it’s a guide. Things will change. But having a plan means:

You start with direction
You can measure variance
You can adjust intelligently
You’re in control, not reacting

Setting Revenue Goals

Review Your Revenue History

Look at 2026 (and prior years):

Total annual revenue
Revenue by month
Revenue by service/product
Revenue by customer/segment
Growth rate year over year

Identify patterns:

Seasonal variations
Customer concentration
Product/service mix trends
What drove growth (or decline)

Set Your 2027 Revenue Target

Realistic approaches:

Conservative: 5-10% increase over 2026
Moderate growth: 15-25% increase
Aggressive: 30%+ increase (with clear strategy)

The target should be:

Ambitious enough to motivate
Realistic enough to achieve
Based on actual strategy, not hope

Break Down the Target

Don’t just set an annual number. Break it down:

By month (accounting for seasonality):

Month	Target	Cumulative
Jan	$20,000	$20,000
Feb	$22,000	$42,000
…	…	…
Dec	$28,000	$300,000

By revenue stream:

Service A: $150,000
Service B: $100,000
Product sales: $50,000
Total: $300,000

By customer type:

Existing customers: $200,000
New customers: $100,000

The Revenue Reality Check

For your revenue target to happen, what needs to be true?

Example: $300,000 target

Average client value: $5,000
Clients needed: 60
Current clients (renewing): 40
New clients needed: 20
Leads needed (at 25% close rate): 80

Do you have a realistic path to those leads and conversions?

Setting Profit Goals

Revenue Is Vanity, Profit Is Sanity

Revenue growth means nothing if it doesn’t translate to profit. What will you keep?

Calculate Target Profit

Profit margin approach:

2026 profit margin: 10%
2027 target margin: 15%
At $300,000 revenue: $45,000 profit

Profit amount approach:

2026 profit: $25,000
2027 target profit: $50,000 (double)
What changes to make this happen?

The Profit First Method

Set your profit percentage target:

Current profit allocation: 5%
Target profit allocation: 10%
Increase by 1% per quarter through the year

Build profit into the plan, not as an afterthought.

Profit Levers

To increase profit, you can:

Increase revenue (at same or better margin)
Increase prices (improve margin)
Reduce costs (improve margin)
Change mix (sell more high-margin offerings)
Improve efficiency (reduce cost per unit/hour)

Which levers will you pull?

Cash Flow Planning

Cash vs. Profit

Profit is accounting. Cash is reality. You can be profitable and still run out of cash.

Project Monthly Cash Flow

For each month:

Beginning cash balance
Expected cash in
Expected cash out
Ending cash balance

Watch for:

Months where cash goes negative
Seasonal cash crunches
Large expenses (taxes, major purchases)
Timing mismatches

Build Cash Reserves

If you don’t have reserves:

Target 3 months operating expenses
Build throughout 2027
Prioritize reserves over optional spending

Plan for Large Expenses

Known big expenses in 2027:

Quarterly estimated taxes
Annual insurance premiums
Equipment purchases
Marketing campaigns
Hiring costs

Build these into your cash flow plan.

Expense Budgeting

Review 2026 Expenses

Category by category:

What did you spend?
Was it necessary?
Did you get value?
What could be reduced?

Create 2027 Expense Budget

For each expense category, decide:

Keep at same level
Increase (justify why)
Reduce (how?)
Eliminate (what replaces the need?)

Budget structure:

Category	2026 Actual	2027 Budget	Change
Rent	$12,000	$12,000	0%
Software	$6,000	$5,000	-17%
Marketing	$10,000	$15,000	+50%
…

Fixed vs. Variable Expenses

Fixed expenses: Same regardless of revenue

Rent, insurance, base salaries
Plan based on known costs

Variable expenses: Fluctuate with revenue

Contractors, materials, processing fees
Plan as percentage of revenue

Leave Room for Opportunity

Don’t budget every dollar. Leave some flexibility for:

Unexpected opportunities
Problems that arise
Things you didn’t anticipate

5-10% buffer is smart.

Owner Compensation Planning

What Will You Pay Yourself?

Many owners take whatever’s left. Plan your compensation intentionally:

Regular owner draw or salary
Retirement contributions
Profit distributions

Owner Pay Target

Calculate what you need:

Personal living expenses
Personal savings goals
Personal taxes on business income
Total annual need: $________

Check against business:

Is revenue sufficient?
Is margin sufficient?
If not, what needs to change?

Retirement Contributions

Plan for retirement savings:

SEP IRA: up to 25% of net self-employment income
Solo 401(k): up to $69,000+ (depending on age)
SIMPLE IRA: up to $16,000+

Build these into your plan and cash flow.

Setting Specific Goals

SMART Goals

Make goals Specific, Measurable, Achievable, Relevant, Time-bound:

Bad goal: “Grow revenue” Good goal: “Increase revenue to $300,000 by December 31, 2027”

Bad goal: “Be more profitable” Good goal: “Achieve 15% profit margin by Q4 2027”

Categories of Financial Goals

Revenue goals:

Total annual revenue
Revenue by quarter/month
Revenue per customer
Number of customers

Profitability goals:

Profit margin percentage
Absolute profit amount
Profit by product/service

Cash flow goals:

Minimum cash balance
Days cash on hand
Reserve fund target

Efficiency goals:

Revenue per employee
Operating expense ratio
Gross margin by product

Sample Goal Set

2027 Financial Goals:

Achieve $300,000 in revenue (up 20% from 2026)
Maintain 60% gross margin
Achieve 15% net profit margin ($45,000 profit)
Build cash reserves to $50,000
Pay owner salary of $96,000 consistently
Contribute $20,000 to retirement accounts
Issue quarterly profit distributions

Creating Action Plans

Goals Need Actions

Each goal needs specific actions:

Goal: Increase revenue to $300,000 Actions:

Launch new service package (Q1)
Run quarterly marketing campaigns
Implement referral program
Raise prices 5% (February)
Add 20 new clients

Goal: Achieve 15% profit margin Actions:

Reduce software costs by $100/month
Renegotiate vendor contracts
Eliminate unprofitable service offerings
Implement efficiency improvements

Quarterly Milestones

Break annual goals into quarterly targets:

Q1 2027:

Revenue: $70,000
Launch new service
Hire bookkeeper

Q2 2027:

Revenue: $75,000
Implement referral program
Raise prices

And so on.

Monthly Check-ins

Schedule monthly reviews:

Revenue vs. target
Profit vs. target
Cash position
Progress on actions
Adjustments needed

The Planning Process

Step 1: Review 2026 (Week 1)

Pull financial reports
Analyze results
Identify wins and lessons
Understand your baseline

Step 2: Set Vision and Goals (Week 2)

What do you want 2027 to look like?
Set major financial targets
Make them SMART
Write them down

Step 3: Create Budgets and Projections (Week 3)

Monthly revenue projections
Expense budget by category
Cash flow projection
Owner compensation plan

Step 4: Build Action Plans (Week 4)

Actions to achieve each goal
Quarterly milestones
Monthly check-in schedule
Accountability system

Write up your plan
Share with relevant parties (spouse, partner, team, accountant)
Post where you’ll see it
Commit to the process

Staying on Track

Monthly Reviews

15-30 minutes each month:

Compare actual to budget
Identify variances
Understand why
Adjust if needed

Quarterly Deep Dives

1-2 hours each quarter:

Comprehensive review
Progress toward annual goals
Major adjustments
Next quarter planning

Flexibility Without Abandonment

Plans will need adjustment. That’s okay. But:

Adjust based on data, not feelings
Don’t abandon at first difficulty
Understand why you’re changing
Keep moving toward goals

Common Planning Mistakes

Mistake 1: No Plan at All

“I’ll figure it out as I go” = no direction, no measurement, no accountability.

Mistake 2: Plan Once, Ignore Forever

A plan in a drawer helps no one. Review and use it.

Mistake 3: Unrealistic Goals

Goals should stretch you, not break you. Base them in reality.

Mistake 4: Goals Without Actions

Goals are destinations. Actions are the route. You need both.

Mistake 5: All Revenue, No Profit

Revenue goals without profit goals can lead to busier but not better.

Mistake 6: Ignoring Cash Flow

Profitability means nothing if you run out of cash. Plan for cash.

Start Now

Don’t wait until January 2 to think about 2027. Start now:

Review this year’s numbers
Dream about what’s possible
Write down initial goals
Begin building your plan

The businesses that win in 2027 are planning today.

Make it your best year yet.

Need help with your financial planning? At Profit Path Books, we help small business owners understand their numbers and plan for profitable growth. Book a consultation to discuss your 2027 goals.