“If you don’t know where you’re going,” Yogi Berra famously quipped, “you’ll end up someplace else.”
For business owners preparing for the upcoming year, the American baseball legend’s witticism likely rings especially true: Nailing down smart, realistic short- and long-term objectives is an essential component of building and evolving a successful business—but sometimes it is easier said than done.
“If you want to grow your business—or even just maintain it—then you have to set goals,” Fifth Third Bank National Sales Director Michael Chaffin counsels. “Doing so helps you understand what moves you need to make and when you need to course-correct throughout the year.”
Planning for success
Think of your journey from today’s business baseline to tomorrow’s triumph not as a colossal leap, but, rather, as a series of manageable, pragmatic steps. In this effort, setting firm metrics and benchmarks can prove an indispensable tool.
If, for example, you want to grow your sales revenue by 30%, take the time to break that larger goal into smaller actionable items according to the unique circumstances you and your company face. Then, prioritize: Will you hire a new salesperson first or wait until after you’ve ramped up marketing efforts? At what point will you consider increasing prices? What will you do to recalibrate if your first quarter revenue does not meet expectations?
If your goal is to hire two new project managers, for example, you may set smaller goals of having the jobs posted by February, the interviews scheduled for the first of March and the hires made by the end of the first quarter.
Chaffin recommends business owners do small quarterly check-ins to monitor their progress and complete a comprehensive mid-year check-in as well. “This way, you’re able to see sooner when something may be headed off course, and take action before it becomes a bigger problem or you miss an opportunity,” he says.
There are ways to make tracking your metrics and achieving your goals easier. Many companies use business intelligence platforms or other software that consolidates financial and performance KPIs in one dashboard, allowing business leaders to easily access that data in one place.
Another tip: Let your employees know about the company’s yearly goals, and what they can do to help reach them. You can also connect individual goals to your business’s broader aims so that everyone is working toward the same end.
“Planning is the most critical thing you can do as a business owner,” Chaffin says, further citing the following areas as worthy of business owners’ attention at the outset of a new year:
- Company growth. Consider how much do you want/anticipate the company to grow and what that will entail. Within this category you might set goals related to revenue, hiring, product development, marketing and sales efforts, fundraising and customer acquisitions.
- Healthy financials. What do you want to see in terms of overall margins, expenses, costs and cash flow? If you completed a year-end review, you probably have a good picture of your company's financial figures and trends, and whether they can be improved.
- Long-term exits. “For small business owners, your personal finances and business goals are closely connected,” Chaffin says. The start of a new year is a good time to evaluate your own finances, savings and plans for exiting the business. Even if you’re years away, it’s never too soon to examine what you ultimately need from your entrepreneurial endeavor— whether that be an acquisition, a steady income stream, a family or employee buyout—and a plan for how you’ll get there.
Tapping the experts
Near the end of each year, Chaffin says that his team meets with clients to go over company and industry performance and look ahead. “We start talking plans for the future, and ask questions about capital needs, new clients coming on and potential purchases,” he says. “We want to know what we can do to help them prepare and provide resources to help the owner make better decisions.”
The conversation may also dig into potential challenges a company could face in the coming months. “There are some risks that we see on the horizon for 2018,” he says. “We want to talk about what we’re seeing and what businesses may need to do to prepare.” That may mean setting aside some extra operating cash to get through an anticipated downturn or lining up a line-of-credit to sidestep a cash crunch.
While your business banker is familiar with most of these topics, Chaffin adds they can also help business owners find additional resources for more in-depth guidance. “We have relationships with accountants, wealth managers, attorneys and more, and can connect our clients with the expertise they need,” he says.