Last week a writer from an online incorporation site for starting businesses, interviewed me for an article she was writing for business owners who visit their site. The first question she asked me was:
“Is it important to set key development goals and track business growth in stages?“
Um, yeah. But why? Well, if you don’t track your progress, and if you don’t have quantitative goals to measure that progress, how will you ever know if you’ve achieved success? Sounds simple, doesn’t it? Not so fast. Simple, yes. Easy, no.
Every business, every organization for that matter, has its own pathway, its own metrics to measure success. It may or may not be simple to define success. We have X customers who pay us Y for our product or service. It costs us Z to deliver that product or service. So, as long as we end the year with Z+20%, we are happy campers.
There are a few variables in there, and decisions behind every one of those variables. Do you know how to find your variables for your business? Mathematics and accounting are only part of the equation. What is your customer willing to pay? What does your competition charge for the same product or similar service? Who do you need to hire to produce and service those products and services, and how much do you need to pay them? What other costs are involved in hiring and maintaining those employees? Can you outsource any of those services and what would that cost?
See? Simple but not easy. It takes thought. It takes FOCUS. It takes research and creativity. And planning. Planning is not something that happens only once. The more you do it, the easier it becomes. And the better your outcomes become. When you first plan your outcome, it’s more “art” than science. “I want to make $5 million dollars this year!” OK, but last year, you booked $500,000 in revenue; what will you do differently to increase sales tenfold in the next twelve months?
Here are a couple of suggestions to begin your journey. First, what growth stage is your company in? That will help determine what kinds of priorities your business should have to grow successfully to the next stage. [Check out my blog post on Business Growth Stages to help with that.]
Next, try to ascertain just the three or four things that your company must do this year to be successful. How you measure that success will depend on your business situation, whether you express it as NOP (net operating profit), or in numbers of new customers who spend $X, or the amount of gross revenue you receive. Or a combination. Or something else.
The point is: Have goals. Make them measurable. While you’re at it, make them Specific, Measurable, Attainable, Aligned with your Vision, Realistic, and Time-bound with a deadline. Those as SMAART goals. They are a key building block for your business, and they are your friend – your touchstones – to help you mark your progress on this amazing journey you’ve embarked upon. They tell you when you’re on the right track, and when you’ve veered off course so you can make adjustments. All businesses need to adjust; the most successful ones do it from a position of intelligence until they get it right.