Entrepreneurs need to set goals on a quarterly basis. These goals need to be measurable and have an action plan. In the words of Antoine de Saint-Exupéry, “A goal without a plan is just a wish.”
Too often the goals are too many to undertake at one time. A better strategy would be to determine where your greatest needs are, then select only a few goals that will address those needs. A goal might be to increase sales by 15% by increasing your social media presence. This is a major goal that will need further refinement with timing, responsibility to implement, and follow-up. Where the goal involves multiple people, then communication, buy-in, and support to get the tasks completed is needed. Adding more tasks to employees may reduce time for other equally important priorities of the business.
Reviewing the progress towards the goal, at least quarterly, needs to be part of the business process. Regular reviews will help maintain focus and will more likely result in achieving the goal. One key item is to reinforce the achievement with an appropriate celebration.
Goals can be communicated in a variety of ways including verbal, written via memo, and with signage. For example, one company chose the motto, “We will be our Customers first choice”. This was included on business cards, stationery and signage. The key was visibility. The celebration occurred when new customers were added. Feedback from customers that left was also shared with employees to learn what went wrong. Goals and priorities may not have a direct financial impact but together will influence the business results.
Budgets and plans are similar to goals and priorities and are embedded in a business plan. In order to obtain financing, often a bank will require a multi-year business plan with annual updates. The true value in doing a business plan is to try different options without committing your business to the change. The first version of the plan utilizes the existing business “as is” or “base case” and allows for changes in prices from suppliers, and prices to customers. Wage increase assumptions are usually factored in as well. From the “base case,” options are considered.
Recall the goal example of increasing sales 15% using social media. This option will reflect a ramp-up of sales and an increase of labour and perhaps training budget as appropriate. Input from the employees can be very helpful as options to increase profitability are developed. Often more than one option will be suggested. Once the best option is selected, take steps to implement it. On a quarterly basis, confirm your actual results to the selected option and confirm whether you are on track for success or if you need to regroup and tweak some of the assumptions. Updating a business plan can be time consuming but the process offers solid value in knowing where you plan to go and how you plan to get there.
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Activity: Defining Goals and Priorities
Your goals and priorities for your business should be reflected in your business plan. Take a moment to explore business planning in this activity.
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As a buyer you can expect the seller to have a current business plan to share once both parties have signed a Non-Disclosure Agreement. One important aspect of a business plan is to include the development of the employees.