Running a Business

Growing a Business

A blog for businesses with 20 or fewer employees or for people planning on starting one. There are two threads. One for Starting a Business and a second for Growing a Business. Author: Henry McCabe.

Goals- A Useful Acronym

In my last few blogs  I have written about creating Someday Goals as a prelude to setting long term goals for your business. In effect a ten year Strategic Plan.  These have been part of planned series on goal setting. So far I have demonstrated ways to collect data useful in setting goals.

It is useful to have a structure around which to build the planning process. The acronym SMART provides that. Goals should be: Specific, Measurable, Attainable, Realistic, Relevant and Timely. SMART goals can be set as part of a Strategic Plan, a plan for the far future, or for a Tactical Plan, a plan for the near future.  Obviously a tactical plan should support a strategic plan.

Specific

Goals should be specific. Saying “I want to grow my business” or "I want to increase my profits" are not specific goals. Saying "I want my business to provide me with an income of $125,000 a year by the end of ten years" is. Saying "In order to provide that much income I must increase the sales of my business to $750,000 by the end of ten years" is. These can be fleshed out with specific sub goals for the actions that must be taken to make the primary goals happen.

Measurable

 Goals should be measurable. If your goal is as stated above, saying "I must increase sales 11.5% each year over the prior year starting from this year's $251,000" is measurable. If a sub goal is that "To do that my sales per square foot must grow from the current $209 to $400" you have another measurable goal. Further, saying that "I must plan for a move to a larger space 5 to 7 years from now because sales growth above $480,000 will be restricted by my current  1,200 square feet" provides another specific goal.

 Attainable

Goals should be attainable. Saying " I must achieve sales of $750,000" after you have concluded on the basis of research that stores in your industry can and do achieve that level of sales is an attainable one. Similarly, saying "I want personal income of $125,000 from the business" is attainable if your research has demonstrated that stores in your industry can and do throw off personal income at that level.

Relevant

 Goals should be relevant. Saying "As one means of achieving sales growth I will identify and add to my offerings one new line of higher margin women's clothing each year for the next five years" is relevant as well as specific, measurable and attainable. Saying "I will sacrifice personal income growth for the next two years by spending twice the national average on advertising as a percent of sales in order to build my client base" is also relevant. Saying "I will investigate adding a line of men's clothing in each of the next three years as a way of building sales " is not relevant because it is likely to be a distraction from the core business.

Timely

Goals should be timely. That is, goals should be set to specific time frames. Saying "I want to increase sales from $251,000 to $750,000 someday" is not timely. Saying I want to increase sales year over year by 11.5% until I reach $750,000 in ten years is timely. Saying "I must find a new 1,800 square foot four years from now so that I am ready to move when my lease ends five years from now" is timely.  Putting your goals within a specific time frame provides a way for you  measure results and stay on track.

The next blog will provide an illustration of a simple strategic plan for the fictional women's clothing store.

Planning. The only thing we know for sure about any plan we make is that actual events will turn out to be different. We must not let the attempt to create a perfect plan get in the way of completing one. An imperfect plan is better than none at all.