OK, so January is almost over… and it seems like just moments ago we were wrapping up the prior decade. How has it started for you? Are you ultra-focused on the goals you set and making measurable progress? Or are you just treading water, marking time, chalking up ‘Another Yesterday’?
Maybe you need to set (or reinforce) so here are six questions that will help get you on your way.
1. What are your revenue goals?
Topline growth. If you are a mature business, you may be looking for a small percentage increase (in dollar terms) but a start-up might aim for 100 – 200% growth. Perhaps you are interested in growing in terms of market share (in percentage terms). Some businesses may not want to grow revenue at all while you focus on other business improvements. Whatever the case, let’s get clear on this.
2. What are your profit goals?
The bottom-line. Perhaps you are looking to distribute more profit to owners and/or you want to build the cash reserves of the business for an acquisition? Some businesses (think early stage tech businesses) may be ambivalent to profit as they ramp up sales, assuming they are well-funded through investment. Again, you should be clear on what you’d like your profit numbers to look like in the coming year (and beyond).
3. What are your efficiency goals?
Fewer business owners will think of this (versus 1 and 2 above). But it’s important to measure how much you are investing (in personnel and other expenses) and what that investment is yielding (revenue and profit). We often hear accountants tell us that they used to make more money with fewer people in a smaller office. But not anymore. What has changed? Efficiency (or capacity) has decreased. Goals should definitely be set for metrics such as Average Hourly Rates.
4. What are your lifestyle goals?
Are you happy with the way you work? Does what you do excite you? It is unlikely, you’ll ever find the perfect role where EVERYTHING is stimulating, enjoyable and rewarding. But modifying your role could lead to more fulfilment. For some this may mean goals such as 20% more time on sales, management, human resource planning, client interaction, technical work etc. Some may want to work LESS in which case the goal may be reducing the average work week from 50 hours to 45 hours.
5. What are your community goals?
Your business doesn’t exist in isolation. It is part of an ecosystem comprising your clients, your employees, your employees’ family members, chambers of commerce, business groups, not-for-profit organizations, your neighbors etc. How do you want to impact that community? How can you contribute? Note, this is not necessarily entirely altruistic since we often reap benefits when we add value elsewhere.
6.What are your succession goals?
Nothing lasts forever. Every business will undergo significant changes in ownership and management. It’s just a matter of time. It’s best to be ready for and control these changes when the time is right. Every business should have goals related to succession even if they are not to be activated for a long time. A one-year goal might be to research possible merger partners, meet with a trusted advisor or determine how to calculate the value of your business.
Final thoughts. This is not complicated. Start somewhere and write down a few goals related to the above. Pick a clear time frame – one year is usually good – and think about what would make you happy and proud when the time elapses. Remember, not everything above is of equal importance; it’s perfectly reasonable to ignore some factors and focus intensely on others.
Panalitix provides tools and solutions to help YOU set goals AND so you can help YOUR CLIENTS set goals, leading to productive advisory relationships.