With 30 June in the rear-view mirror, business owners should the take opportunity this month to re-calibrate and set some goals for the new financial year.
Goal-setting can help you stay focussed on what really matters for the business, while preventing you from getting sidetracked and enabling you to achieve success.
Find your inspiration
It’s always a good idea to start with the bigger picture and ask yourself what it is that you want to achieve through your business. What is it about the business that makes you jump out of bed every morning? Start broad and identify the driving force behind what you do.
Is it to create wealth, or to are you planning on building up the business to resell at some point to make a profit? Whatever the reason, knowing the ‘why’ will help you gain clarity on your goals and allow you to start working towards them.
Break it up
Once you’re clear on your overarching goal or vision, then start breaking it down into smaller actionable steps. It’s a lot harder to achieve one large goal, and a lot easier making smaller incremental progress.
For example, instead of setting yourself a lofty goal of tripling revenue over a number of years, plan out how that might eventuate by breaking it out into a series of smaller, actionable steps. For instance, the first of these steps might be to increase the range of products you sell if you run an ecommerce, or to increase revenue by 20% per quarter.
Be SMART about your goals
It’s important that your goals are SMART (specific, measurable, achievable, relevant, and time-based). By setting goals that are clear, manageable, tailored to your business needs, you’ll be on a more focussed path.
Instead of saying that you’d like to ‘grow your business in 2017’, an example of SMART goal setting would be to ‘increase sales by 15 per cent quarter-on-quarter’ or to ‘increase revenue by 10% in the next 6 months”.
After you’ve planned and set your goals, it’s time to action them. Learning to keep yourself (and others) motivated and focussed on the goal may sound like hard work but it will pay off in the long run.
Keep yourself accountable by checking-in regularly on your own progress. If you’re failing to meet a particular goal, it might be time to re-evaluate — refer to the above point and see if your goals are SMART. If they aren’t, perhaps it’s time to review and replace these with some that are achievable and actionable.
It’s also important to measure your monitor and measure your goals as you progress through them. This will enable you to make informed decisions about your business and adjust your strategy if required.
Cloud accounting softwares can help you make the process of measuring and staying on top of your goals simpler. You can trust that your financial information is up to date and readily available for you to review in an easy to digest format. These tools can also help you measure a wide range of business indicators such as profit margins, revenue, sales volumes, return on investment and available cash flow — invaluable data to have to hand when you need to make business decisions.
About the author
Mel Power is Head of Bookkeeping at Xero Australia