In our last discussion, we ventured into the strategic habit of beginning with the end in mind. This edition is dedicated to crystallizing that vision into tangible business goals. What is that goal you wish to reach?
Defining Your Business Aspirations
As we navigate the complexities of commerce, two pivotal objectives should anchor our strategy: the desired revenue and net operating profit. Once you follow your Gross Profit Margin (which we have briefly discussed in previous editions of this newsletter, and which we will certainly discuss in greater detail again in future editions), then you probably want to have a goal for what you want that gross profit margin to be at too.
These targets are the milestones marking our journey to fiscal triumph.
Timing is Everything
The timing for these goals is crucial, typically aligning with the end of your fiscal year. E.g. I am writing this into November, and if indeed your fiscal year follows the Calendar year, it would be most natural that you would have specific goals for what your performance and numbers in your Profit & Loss Statement should look like come the end of the year, per December 31.
Your fiscal year end is a significant checkpoint. It is also what you will ultimately be meeting any tax obligations from.
Now, being in November, you of course really would not have much time to influence extreme changes, so hopefully, your goals for this year would have been set possibly towards the end of last year and you would have worked on your goals in your business such that your current results would be headed towards realizing your goals.
In other words, ideally, your objectives for the year would have been set in the preceding year, allowing you to methodically advance towards them. Success is seldom a product of chance; it’s the result of deliberate and sustained effort.
The Common Pitfall
Regrettably, many small and medium-sized businesses fall short of this strategic approach. My experience is that a majority of small and medium-sized businesses and their owners do not set such goals and do not work in such a way. Basically they just show up every business day, switch on the lights and the computer and then wait for business to happen.
Daily operations consume their focus, leaving them reactive rather than proactive. But we aim higher, seeking not just to participate in our businesses but to proactively sculpt their outcomes.
My contention is their results are going to be whatever and that quite frankly you won’t be happy with whatever.
The Impact of Intentional Goal Setting
The significance of setting explicit goals cannot be overstated. By diligently working towards well-defined objectives, we can realize achievements that may seem insurmountable, regardless of the broader economic or political landscape.
Now, if indeed you are one of the many who have no goals set for the year, then your actions step would be to review what kind of results you have now (year to date) and then perhaps also quickly review what kind of results you produced the prior year especially for the months corresponding to the remaining months of your fiscal year, and then make some estimation of where that would put you for this fiscal year. From there you should probably superimpose some goals of where you wish to push your outcomes to. With precision, set targets to elevate your year-end performance.
Looking Ahead
Again, if your fiscal year ends at the end of the calendar year, then you do not have much time to really push your results dramatically, so that may limit how much you can expect to push and change your status quo results. If your fiscal year is not following your calendar year but goes to say March 31st of next year, you now have some extra time that you can influence and work on your goal achievement. In that case, you might be able to push your goals further and demand that you stretch yourself and your performance a bit more.
If your fiscal year is drawing to a close, now is also the time to begin crafting goals for the forthcoming year. With the new fiscal year on the horizon, having a set of clearly articulated objectives is not optional—it’s imperative. Going into a new fiscal year, you really should have your goals set out.
In the realm of business, these goals are often detailed within a budget, a subject we’ll explore in forthcoming issues. For the moment, there are other pressing matters to address, but rest assured, we will build upon our knowledge of budgets and their critical role in business planning.
In closing, let this be a reminder of the power held within proactive goal setting. As we progress, we will delve deeper into the methodologies that convert aspirations into achievements. Join me as we continue to forge a path to exceptional business performance.
