Setting goals is key to success but some people find it intimidating and don’t know where to start. This article includes a 6-point guide on goal setting to help you focus and specify goals. This will lead to astute business planning and will bring clarity to the year ahead. It’s never too late to set business goals!
As accountants, we see many clients who need to set (or reinforce) those goals so here are six questions that guide you in goal setting.
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 be less focused on revenue than on other business improvements. We like our clients to be really clear on these goals and then to ensure progress is properly tracked.
What are your profit goals?
The bottom-line. This is one of the most pressing business goals for many small business owners. 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, these strategies take careful planning (e.g. tax mitigation) but are dependent on your business goals.
What are your efficiency goals?
Fewer business owners will think of this (verses 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). Sometimes our clients tell us they used to make more money with fewer people, few customers, fewer products, less marketing expenses etc. But not anymore. What has changed? Efficiency (or capacity) has decreased. Let’s ensure you are measuring the right thing in your business to increase capacity.
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 fulfillment. 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 workweek from 50 hours to 45 hours. As accountants, we can help our clients be clear on the impact of any of these decisions.
What are your community goals?
Your business doesn’t exist in isolation. It’s 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. Modeling the implications of these decisions can be really important.
What are your succession goals?
As 2020 rather ruthlessly pointed out – nothing lasts forever. This is true in life and in business. 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 set business 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. Accountants with experience in transactions can form an important part of this process.
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. We feel it is essential to help our clients set goals because then we can help you achieve them!
To schedule a consultation to see how you can set business goals that are realistic and how to ensure you achieve them from a tax/accounting perspective, please Contact Us!