How To Set The Right Goals

You have probably heard it said a thousand times that to be successful in business and in life you have to set goals.  I think it is something we all do sub-consciously, but do they have value?  It is easy to say you want make 2% more margin on units, increase your service department efficiency, sell more parts and accessories, or the big one, make more profit.  The question you have to ask yourself, can I substantiate these goals as achievable or are they just my wish list.  The answer is simple. Without foundation they are exactly that, a wish list.  Setting real obtainable goals is much more complex and requires some due diligence on your part.  Find out how.

Step 1 Educate Yourself:

Educate yourself on how your company has performed.  I don’t mean simply whether you were profitable of not.  You can read that off the bottom of your Profit & Loss statement.  No. You have to analyze every financial aspect of your business and then compare it to industry standards to establish your strengths and weaknesses.  This sets the bar as to how and what can be achieved.

Step 2 Prepare a Business Plan:

Build a financial business plan using past history, industry standards and the objectives for your business.  Ultimately you will come to a bottom line figure that based on your business plan will result a projected profit.  Is this the number you are looking for or does it fall short of your expectations?

Step 3 Set Achievable Goals:

You can now set realistic goals based on the information you have gathered and your projections for the coming period.  There is little value in setting a goal to sell $10 million in product when you have never exceeded $2 million in the past.  However, it may be reasonable to grow your business by 30% based on the criteria you have established in the due diligence phase for setting your goals.

Step 4 Build Strategies:

Build strategies or an action plan for achieving your goals.  These strategies can be generated through the information you gathered on your business, industry standards, experience and a host of other valuable inputs. 

There is a big difference between saying you want to be more profitable and setting specific profit goals based on these four steps.  This is what Paul Tudor Jones discovered when trying to bring success to the Robin Hood Foundation.  He had to apply the principles of business, which dictate you must have a business plan and set achievable goals for each charitable donation to reach the ultimate goal of making a difference in people’s lives.

No doubt there will be non believers who say they have never done this before and since they have succeeded in being profitable, why bother.  This begs the question. “Have they ever truly achieved their real potential?” 

If you want or need help working through this 4 step process, contact me for a free consultation.

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