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Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

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A Strategic Approach to Setting Business Goals

Written by Vanessa Williams on January 16th, 2019.      0 comments

Most people aim at nothing and hit it with amazing accuracy!

Most business people are not good at setting goals.

business planning-560They typically take an incremental, rather than an innovative, approach to planning. If you did $2 million in revenue last year, you’re most likely going to aim for $2.1M this year (or $2.2M if you’re feeling particularly bullish.)

Such modest growth is reasonably and easily achieved; simply put your prices up and there you have it.

High performing businesses take a very different approach.

They understand that the path to true and sustainable growth lies in developing deep and enduring relationships with their customers; in truly understanding what customers need, rather than simply delivering what they say they want. They take a proactive and intentional role in improving the customer experience and drive towards helping them to exceed their expectations.

So when we talk about setting goals, we are talking about much more than last year plus a bit. We are focused on a different way of thinking and conducting business. We suggest you need to develop a thorough understanding of clear answers to the following questions:

  1. Who are your ideal customers?
  2. Where are those customers located?
  3. What are the core products and/or services your business offers to those customers?
  4. What customers' needs do those services meet?
  5. Specifically, how does the customer benefit?
  6. On what basis are those products / services priced?
  7. What is the ideal service model for those customers?
  8. How are you going to market and sell the products / services?
  9. Is the product / service offering scalable (or is it dependent on a few key people?)
  10. What changes are on the horizon that might impact your customers and how can your business innovate to stay one step ahead of the game?
To gain clarity around these important questions, the key business process of PLANNING should not be overlooked. In our view, most people take on too much and achieve very little - because they feel overwhelmed. A better approach is to:
 
  • Determine the relative importance of your business goals. For example, if you had to allocate 100 chips to the following six goals, how would you make that allocation? It’s our bet that you’re unlikely to place all 100 chips on just one goal, meaning that usually more than one of the six goals is important, but some are more important than the others. The goals we most commonly see are:
  1. Revenue
  2. Profit
  3. Capacity
  4. Community
  5. Lifestyle
  6. Succession
  • Assess your business’s strengths and weaknesses across the following five key business areas:
  1. Attracting new customers
  2. Managing existing customers
  3. Developing team
  4. Optimising processes
  5. Developing products / services
  6. Create a PROJECT PLAN consisting of a small number of projects that have a high correlation with the relative importance of the goals at step one and the low hanging fruit identified at step 2.
  7. Implement the plan with a high degree of focus and accountability.
If you want to build a great business, one that you and your team can be proud of, a business that is respected as a bastion of your community, you need to set stretching goals, articulate them with confidence and engage in calculated risks. All of that takes courage and hard work.

Yet think about it; what would you rather be? A leader of a dynamic, growing organisation offering real value to a range of exciting customers, or the leader of a staid, traditional business growing at the rate of CPI with nothing to differentiate you from your mediocre competition?

If you want the former, it’s time to set some challenging goals.

Your goals should be specific, measurable, audacious yet realistic and time bound. Write them down. Share them with your team. Link incentive programs to them. Create accountability around them. Live and breathe your goals on a daily basis.

Alliott NZ Chartered Accountants are a CAANZ Top 30 NZ accounting firm so feel free to lean on our expertise if you need a hand. We're in Auckland on 09 520 9200.
 

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