Setting Business Goals – Stop Moving The Goalpost

July 3, 2018

Goals

The importance of setting business goals cannot be overstated, but the fact is that most owners never bother to set clearly defined goals and objectives.

And the ones who do usually abandon them and return to their reactive habits before any measurable improvement has been made. It’s like a field goal kicker trying to put it through the uprights while his own team keeps moving the goalpost.

Sound familiar?

Strategic business goals are critical to achieving improvements or changes in your business. Each goal should clearly state the objective, be accompanied by a written statement defining the benefits of achieving the goal and be measured by milestones to ensure continuing progress is evident. It may sound like a lot of extra work, but well worth it as this practice practically guarantees that your management of the business will remain proactive and productive.

Here’s how it works.

For example, if you were the owner of “Joe’s Pizza” and you offer both take-out and delivery, but your take-out sales are lagging.

First, clearly define your goal and write it down. For example, “I want to increase take-out sales.”

Next, follow these three simple rules to define the path to your objective:

1. Goals must be measurable.

Successful companies always focus on setting business goals that can be measured. So you decide on a number – and stick to it. In this case it should be a sales or profit dollar amount, or a percentage increase over current figures. An example of a poor choice in this instance would be “units sold” as improvement would be difficult to measure given the widely varying prices of different types of pizza, sides etc.

2. Goals must have a deadline.

Set a time frame for your stated objective. If Joe’s Pizza would like to increase sales by 30% over last year, it wouldn’t make sense to set a one month time frame for that goal. Measurable improvement will obviously require more time, and successful achievement of the goal won’t be known until well into the 12 month period. However, measuring improvement in milestones of this-month-this-year vs this-month-last-year will provide valuable insight into your progress.

3. Goals must be attainable.

This seems intuitive but you would be surprised how frequently this rule is overlooked. Consider your knowledge of your industry and your competitors. While a 30% increase might seem ambitious, it is certainly attainable whereas a 300% increase would likely be well beyond the capability of the current business model.  Also, since Joe’s likely offers more than just pizza, the target percentages of increase could be further broken down into additional categories and also based on factors like competition, customer convenience and capability.

4. Set goals at a level slightly above what can likely be achieved.

As the owner of Joe’s Pizza you would realize that 300% growth in sales is very unlikely without a major change in circumstances. After reviewing past performance and the actions of competitors, you could settle on a reasonable objective of a 30% increase in total sales and further target the improvement across category offerings such as “pizza”, “salads”, “drinks” etc.

To recap, we have gone from:

“I want to increase sales.” to “I want to increase sales 30% annually and measure each month versus the same period last year to track my progress, and I’d like to target 20% of the improvement from pizza sales and 10% from everything else.”

Congratulations!  You now have a strategic plan for setting business goals.

One final tip…

Measure what makes sense.

There are an infinite number of “yardsticks” you could use when setting business goals, and successful organizations often use multiple measurements.  The key is to pick the metric(s) that best fit your business, your competitive environment and your stated goals.

 

For more information or to discuss your particular needs in this area with an
expert business coach, please contact me to schedule a complimentary initial
telephone consultation where we’ll provide a customized
12-point growth plan for your business.

Breakout Consulting, LLC
Dearborn, MI   San Diego, CA
313-757-1425

business coach