Discover how to focus on what you’re best at and set your business on the path to financial mastery in this exclusive extract from our new guide, The Six Stages of Smarter Money Management.
When you’re first starting off you may be able to manage every area of your business, but as your company grows, it’s difficult (and inadvisable) to work on everything.
Well, consider the common key areas of a growing business:
It’s a lot to handle for any business owner or manager. What’s more, members of your team may be experts in a particular area. You’ve hired them to do a job so you can focus your time and attention on what you’re best at.
“You need to be passionate about what you do. When you are your own boss you need to be excited about getting up in the morning and working,” says award-winning British designer Lorna Syson.
Although you may be passionate about your business, your team will still look to you for direction.
Setting SMARTER business goals for each key area will help you put your business on the path to financial mastery without getting caught up in the specifics.
In this post, you’ll discover how to do just that.
Rather than setting a general goal like “I want to grow my business,” decide what exactly you want to achieve. For example, are you going to grow your business by increasing sales or by cutting costs?
Or perhaps you want to focus on increasing exports?
Remember, attempting multiple things at once could prove problematic.
If you want to increase sales or cut costs, set a financial target for your goal that you can easily track using relevant financial information.
You should be able to track your progress, week-on-week, month-on-month, quarter-on-quarter and year-on-year.
For example, you may say, “We will cut costs by 10%” or “We will increase sales by 10%”.
You must have a means of achieving your goal. If you want to increase sales, consider if you can cross-sell or up-sell your products or services. Then, include this means in your goal.
For example, “We will increase sales by 10% by up-selling X product to Y segment.”
Increasing sales by 10% may be ambitious but can your business achieve it? And do you have the resources to turn this goal into a reality?
Remember, a stretch goal pushes your team beyond what’s been done before while a realistic goal is based on past performances.
Set a deadline for your goals and work them into your business plan. Typically, quarterly business goals work as they’re not so long away that they feel unachievable, and you can track them alongside your financial reports.
For example, “We will increase sales by 5% during the first quarter through up-selling X product to Y segment.”
At the end of each quarter, review your SMARTER goals and consider how you’re progressing against a financial target.
You can do this using up-to-date financial information paired with business insights from your team. Then, decide what to keep doing, what to stop doing and what to improve on.
After all, it was Peter Drucker who said, “If you want to improve how you manage time – stop doing what doesn’t need to be done!”
Once you’ve evaluated your progress, adjust your goal for the coming quarter by doubling down on what works and abandoning what doesn’t.
You should also inform members of your team about any changes to a SMARTER goal so they work on what matters most to your bottom-line.
Your next step
Along with key people in your business, set SMARTER goals for each area (marketing, product, sales, distribution, operations, technology, financial, leadership and people).
Then, share your goals with any other relevant team members. You’ll know you’ve mastered this stage when teams are working towards agreed goals, and you don’t have to work directly in every area of your business because your leadership guides the work of each team.
You will also be able to regularly review your company’s progress towards each goal and adjust your business strategy as necessary.
If you want to achieve financial mastery, setting SMARTER goals is just one of the six key stages you’ll go through. Discover all the stages and find out what stage your business is at in our guide: The 6 Stages of Smarter Money Management.