Setting One Year Growth Goals for your Business
In our last article we spoke about how to create more time and money - by getting clear and focused on WHAT you do, WHO you do it for and what SCALE you want to do it on. Today we are going to talk all about making more money - and how to set growth goals that you will actually hit. Because talking finances and numbers usually has the eyes-glazing-over effect, I have created a Top Five list to keep this fun!
Actually set goals.
Over the 11 years that we have worked with small businesses to help them grow, we estimate that only 2% have actual growth goals for their business. When questioned about their goals, most small businesses owners usually answer with something like “I want to hit a million dollars” or “I just want to grow 10%”. These are not real goals - they are vague wishes or thoughts! We know for sure that when people have actual goals, they dramatically increase their chance of growing.
Make sure your goals are somewhere between aggressive and realistic.
Remember that once you set a goal, the point is to actually hit it. Many times people set completely unrealistic goals or set goals that are way too easy. The trick to setting goals that you will hit is to make them just hard enough that you are motivated, but not so hard that you give up before you even start them.
Understand your expenses first.
Most small business owners do not have a true understanding of their expenses. They think only about revenue and they judge their success based on increasing their revenue. But if you don’t understand your expenses, you can’t truly understand your numbers or set goals. There were years in my business where our revenue went up - but so did our expenses. And so we didn’t actually make any more money. All revenue is not good revenue. If the new revenue means you need to incur more costs, you always need to be aware of how much profit you are actually making. As we tell many of our clients - lots of deals are so bad that they are actually paying to do the work. They would be better off simply not doing it and going to a movie than to incur more expenses than they make in revenue. All revenue is not good revenue You really need to understand your expenses as well as you do your revenue.
Tell the truth.
This one seems obvious, but I can’t tell you the number of times we have reviewed the numbers that someone puts into their SLAP and they are totally inaccurate. Not just because they didn’t necessarily know the information, but because they weren’t prepared to tell them truth to themselves. The numbers are not always great news, but the truth will set you free! When you have a proper understanding of what is working or not working, you can figure out what to do and how to grow. But if you are not looking at real data / information, you will never have the chance to do that. I get it. The truth can be hard sometimes. I have spent too many months of my life with my head in the sand hoping hard times would pass or freaking out because I didn’t know how to handle a cashflow problem! But, looking back that approach was not helpful. Dealing with things head on, understanding exactly what is happening and responding accordingly is a mature response to a real life situation.
Try to keep the emotions out of it.
I think that 95% of running a business requires entrepreneurial passion, motivation, inspiration, blind faith and a flurry of other emotions that keep us all going when the times are good and bad. However, one of the places where blind faith, emotion and optimism is not necessarily helpful is when you are trying to calculate and define the numbers for your business. Often times, the feelings of hope, fear, anxiety, belief and more can really skew the numbers - for better and worse. The beautiful thing about numbers is that they just tell you exactly what is going on. So, while I don’t recommend being logical and practical most of the time as it relates to running a business, when it comes to the numbers, just let them tell you exactly what is going on in your business. Listen to the numbers, they give you incredible insight into your business!
There is much more to say on this topic, but we will pause here and look forward to our next part of this series where we will talk a bit more about these growth goals and also about how to define your Ideal Client so that you know WHO to go find in order to hit your new Growth Goals!
If you have any questions about your own WHAT, WHO or SCALE,please feel free to be in touch with our team. We truly live, breath, eat and sleep small business and it would be our pleasure to support you.
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House of Home is pleased to welcome Carissa Reiniger as a guest contributor. Carissa is the Founder and CEO of Silver Lining, a global company that has helped over 10,000 businesses in 9 countries to build profitable, sustainable businesses. This is Carissa’s first article in a 4-part small business coaching series to help you find more customers and grow your business.
If you would like to know more here's a link to Carissa's website
Article Two in the series - Setting One Year Growth Goals for your Business
Article Three in the series - Finding your ideal client
Article Four in the series - Creating a Marketing Action Plan to Connect with your ideal client