So you’ve finally taken the plunge and set up your own business. You’ve bagged your first few clients, got your website set up and have enough capital to keep you in business for the next six months.
So what next? Well, you need to establish how you’re going to keep growing by setting some business goals. Sounds obvious, doesn’t it?
But unfortunately this is where a lot of startups go wrong. Because while 70 new businesses are registered in the UK every hour (no, that’s not a typo, it is every hour!), 60% of these fail within three years, and 20% don’t make it past their first anniversary.
And a lot of the time it’s because they have failed to set business objectives.
Why are business objectives so important?
A business without objectives is like a boat without a rudder. Or a map, compass, crew, supplies or lifejackets. If you don’t know where you’re heading, or the safest route to take, your chances of sinking are going to massively increase.
So setting objectives gives you direction for the business to follow and will allow you to plan for all the resources you will need for different stages of growth.
Plan for long term goals with short term business objectives
It probably goes without saying, that your overall business goal is to make money. For some that may mean creating a huge empire that will eventually generate millions of pounds. For others that may be creating a “side hustle” – whether you are the main carer for your children or already in a full time job.
But regardless of what you want to achieve, you need to start with a long term objective.
Where do you want your business to be in three to five years? Once you have established that long term goal, you can then break it down into the smaller objectives you need to achieve on a weekly or monthly basis.
So what should these goals be? Well that all depends on you and your business.
Obviously sales, revenue and profit will be major objectives but you also need to consider brand awareness, market share, increasing the size of the business and improving customer service.
So in terms of increasing brand awareness, social media may form part of your strategy. If that’s the case then you want to set a goal for how many followers you want to have achieved within a year.
Which therefore means working out how many new followers you need each week to reach that overall goal.
As you plan these long and short term objectives you’ll also need to consider whether you have the resources (whether that’s people or time) to achieve that. For example, once you start getting busier will you need extra staff, either on a full time, part time or contract basis, to meet your objectives?
And if so, when will your finances allow for this?
Are you being SMART with your business goals?
Another area where startups sail off course is by not being SMART with their objectives.
But what do we mean by this? Well, SMART is one of those cheesy business acronyms that you left corporate life to avoid. But it is one that makes a lot of sense.
So let’s break it down:
S is for specific
One of year’s objective may be to get lots of sales. But what does “lots” of sales mean?
So the first step is to be specific. For example, you might say in the first year of business you want to achieve 75 sales. So you break that down – in the first quarter you’re aiming for 10 sales, 15 in Q2, 20 in Q3 and 20 in Q4 (you know, things get quiet in December – which we’ll come back to in a moment).
M is for measurable
This ties in to the point we just made – if you’re specific about your goals you can measure them. It may be obvious but you need to make sure that you are measuring and recording your objectives – whether that’s sales or social media followers.
A is for achievable, R is for realistic
You know we said that sales growth was likely to dwindle in Q4 as businesses slow down for Christmas? Well, we were just being realistic.
But it may be that you were a bit quieter during the summer than you were expecting and only achieved 18 sales in Q3. But that’s not a problem, you can adjust your objectives for next year or adjust your strategy so that you have more of a sales push in September and October.
T is for timely or within a given timeframe
Whatever your objectives, a timeframe needs to be established. Setting the goal of doubling sales means nothing, if you haven’t specified a timeline for achieving that. Doubling your sales within a year will require a substantially different strategy and resources to doubling sales within three years.
By setting a specific time frame you can then also assess whether the specific objective was achievable or realistic and then adjust your targets accordingly (whetehr that’s an increase or a reduction) for the next given timeframe.
Not only does setting objectives give your business direction and purpose, it also helps you assess your strengths and weaknesses. And while it’s always good practice to identify areas for improvement, it also gives you an opportunity to give yourself a well deserved pat on the back.
And if you didn’t achieve the results you wanted, well perhaps you weren’t being realistic about market conditions? That’s the thing about running your own business – it’s a constant learning curve.
To find out how IntelligentPA can help you set and achieve your business objectives, contact us now.