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Success Tip

Jeff Kinsella is the Economic Partnership’s Manager of Business Growth Services. This article is the first in a five-part series of articles about setting goals for your business. 

Are You Sure That’s What You Want?

For any business owner who wants to be more successful, one of the most important activities that you can undertake is to set proper goals that are designed to take you where you truly want to go in business. Your goals are the foundation on which you base every decision in your business, so having clearly defined goals makes life a lot easier. Once you have set proper goals, whenever you are faced with a difficult decision, you just have to ask, “Does this help me achieve my goals?” and the answer is usually clear.

For goals to be useful tools, they have to be proper goals. Setting poor goals can be as bad or worse than no goals at all. Let me give you an example. One of my first businesses was a sub shop. When I first opened my goal was, “To sell as many subs as I possibly could each day.”

I always met my goal (because once I was closed for the day, I couldn’t sell any more), but I quickly realized that I was floundering and my “goal” wasn’t helping me. Why? … because it didn’t really capture what I was trying to accomplish. I needed some firm targets that made me stretch to reach them, but also something that guided my actions. Once I began setting better goals, my results improved very quickly.

One of the most useful frameworks for setting goals is to set SMART goals. SMART stands for Specific, Measurable, Attainable, Realistic and Time-bound. Each of these attributes is critical if a goal is going to help you run your business. In this issue we will talk about making your goals Specific, and in future issues we will discuss each of the others.

Being specific means making sure that each of your goals points you in absolutely the right direction, and sometimes that is not as obvious as it seems. Many people that I talk to tell me that their goal is “To increase sales”, but as we talk further I find that this isn’t necessarily their goal at all.

For example, do you want to increase sales or profits? If you say “profits”, then do you want to increase profits or the amount of money you can draw from the company? Do you want to increase the total amount you draw from the company or keep your draw the same and spend more time with your family? Each of those distinctions can make drastic changes in how you run your business.

If you say “sales”, then do you want to increase the number of sales or the average sale size? Do you want to increase unit sales or dollar sales? Do you want to increase the number of repeat sales or sales to first time buyers? Do you want to increase sales across the board or are there certain products or services that you want to increase more than others? Do you want to sell more in your current market or do you want to enter new markets? As you become more specific, the goals become more useful.

As a result, the one simple goal of “increased sales” might become a series of well-focused goals, for example:

• increase overall sales revenue by 10%,
• increase the average order size by $1.00,
• increase unit sales of products A and D by 20%,
• add 2 new product lines and eliminate 1 poor performer,
• increase the net size of our customer base by 6,
• increase net profit before tax by $10,000.

These goals talk about much more than sales, they talk about how you intend to do business. Once you get specific, your goals can start to form a pattern that can guide your thinking and help both you and your employees to become happier and more productive.

Check back in the next issue of Taking Care of Business for the second in a series of five articles and we will show you how to make your goal setting Measurable! If you have any other questions about growing your business, please contact Jeff at 332-1820 or email kinsella@sarnialambton.on.ca.