Perhaps the simplest and most important step in planning, and definitely the first step in planning: identify where you’re planning to get to.
You can’t work out what needs to happen in your business if you don’t know what you want the end result to be so start with the end in mind. Think about your goals for the business and where it’s headed. Those goals will set the compass direction and ensure you stay in control.
Most people in business are so caught up in the excitement or overwhelmed with the tasks involved that they only look a week or a month ahead (OK, let’s be honest….often a day ahead, at best). Savvy entrepreneurs are looking way beyond that!
And they know exactly what they want their business to look like and what they want to do with it.
So start by thinking about what the end result will be for you and the business:
- Do you want to sell the business? When? For how much?
- Do you want to expand nationally or internationally?
- Do you want to grow your business by X % or turnover X dollars by 2025?
Only 6% of businesses have a written goal. No wonder there are so many business owners ‘lost at sea’.
Interestingly, 90% of businesses that achieve our definition of success (a business that produces the income that the owner wants and a business that runs smoothly without the owner) have a written goal. A strong correlation between those who have a written goal and those who succeed!
So what is effective goal-setting? Start here:
- Identify and commit
Take the time to sit down, think ahead and define what you want from your business and what you want it to look like in 5 years, then 3 years, then 1 year. Yes, start with the end in mind and work back from there. Be honest and authentic; these goals should not only guide your business plans but should also be genuinely motivating to you.
- Be abundantly clear
Be really clear about your goal. “I want to run a successful business” is NOT an effective goal. There are too many variables that haven’t been addressed. Be specific about what success looks like for you. Break a goal down so it is clear to anyone who reads it what the plan is. Something like “Open ten shopfronts in Victoria, New South Wales and Queensland within 24 months” or “Achieve $750,000 per year in top line revenue in 2022” or “Achieve 30% gross profit and over 1 million dollars in top line revenue by the end of 2022 with the aim to sell the business for 5 million dollars” is very specific. It’s easy to measure, its actually a result and has a time scale attached to it. Yes, you can use the SMART framework to guide you – all goals should be Specific, Measurable, Achievable, a Result and Time-scaled.
- Set yourself up for success
Make sure your goals are achievable and that you can access appropriate resources to achieve them. Setting yourself up for failure will do nothing for your morale and that of the company. While it would be nice to retire to a tropical island with millions in the bank and a cocktail in your hand a year after your business opens, it’s not very realistic. At the same time, there’s not much point in only setting the simplest goals that won’t actually progress you very far. A useful approach here can be to not just ask “where can we get”, but to ask “to get to where we really want, what do we need to do” – its amazing what is possible!
Writing a goal on a piece of paper and then filing it in your bottom desk drawer will not remind you of your goal. Creating a fabulous document all about your business goals then filing it electronically in a folder never to be seen again is also a thumbs down.
Your goals should become part of the business plan, the action plans, the life and soul of the company and the foundations for any strategic decisions that are made. If those goals are squashed down in a file somewhere….well, there’s a reason they say out of sight, out of mind…..get ready for choppy waters ahead.
Once your goals are set, they should become an integral part of your operating rhythm; from guiding your planning for the year, to motiving you and your team on a daily basis. Put them front and centre and enjoy the energy they provide!