Have you achieved your goal for the business?

Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business. It’s a journey that can be high-pressure, stressful and risky. So, how do you know when you’ve genuinely achieved your goals for the business?

The importance of setting goals for your business

A goal is a desired result you can envision, plan and commit to achieving. Achieving goals empowers individuals and organisations to move forward and realise their potential.

Setting your goals is the first step on the road to success and a key to business development. Identifying a specific outcome makes you much more likely to achieve your goal. But setting goals is not enough – you must ensure they are the right goals. The best goals are S.M.A.R.T; Specific, Measurable, Achievable, Relevant and Time-bound.

Too often, businesses set either vague or excessively ambitious goals. This can lead to frustration and failure when the goals are not met, or you lose focus when a plan has not been broken down into manageable and measurable stages. How do you know you’ve reached your goal if you haven’t clearly articulated exactly what your goal is and how long it will take?

The key to setting practical goals is to ensure they are specific, measurable, achievable, relevant and have a fixed timeframe. For example, rather than setting a vague goal of “increasing sales”, ensure your goal is set with SMART parameters like, “increasing sales by 10% within 6 months”. This goal is specific, measurable, relevant, achievable and has a set time limit. In 6 months, you will know if you’ve achieved your objective.

Once you have set your goals, creating a plan of action is the next step to ensuring you achieve them. Your plan should be tailored specifically to your business and include realistic milestones. With a plan in place, tracking your progress and determining whether you are on track to achieve your endgame will be easier, quickly identify challenges and opportunities, and ultimately lead to more success.

Finally, reviewing your progress regularly and adjusting your plan as you progress is important. By doing this, you can ensure that you are always making progress towards your objective. Let’s look at a common scenario.

You’ve been in business for a while now. You have great products and services, and you’re getting pretty good at marketing them. You’re making sales, but are you achieving your goals? So, how do you know when you’ve truly achieved your goals for the business?

Here are 5 questions to ask yourself to see if you have achieved your business goals!

1.     Has the business met its growth targets and scaled up as intended?

You’ll have seen your business idea grow from being a fledgling startup, to an established business and on to become a scaled-up, ambitious enterprise with a solid customer base.

You know you’re on solid ground as a business if you’ve met these growth targets. Your idea has legs, and you’re delivering a product and service that your customers see as valuable – and they’re willing to part with their hard-earned cash to purchase.

2.     Are you running a profitable enterprise that’s in good financial shape?

Running a tight financial ship is crucial. It would help if you had solid revenues, positive cash flow and liquidity to keep your business ticking.

To determine if your enterprise is running profitably, you’ll need to look closely at your financial situation, including your income, expenses, debts, and assets.

You’re headed in the right direction if your income exceeds your expenses. However, if your expenses exceed your income, you’ll need to make some changes. To ensure your business is profitable, your income must exceed your costs. To achieve profitability, you have three options; you can increase your sales, you can reduce your costs, or (the best option of the three) you can do a combination of both.

Another critical factor to consider is your debt-to-asset ratio. Your debt-to-asset ratio is calculated by dividing your total liabilities by the total value of your assets. A ratio of greater than 1 means you’re using debt to finance your business and with this comes risk. This can; put a strain on your cash flow, make it challenging to meet your financial obligations and be less attractive to investors. A ratio of less than 1 indicates you have sufficient assets to cover your liabilities and are, therefore, at less financial risk. A debt-to-asset ratio of less than 1 would be looked upon more positively when seeking a loan or additional funding.

Finally, keeping an eye on your accounts receivable and accounts payable can help your cash flow. Accounts Receivable is the amount of money your customers owe you. Making sure you get paid as quickly as possible will improve your cash position and can be the difference between success and failure. Letting your customers use you as an interest-free line of credit is a fast track to ruining an otherwise profitable business.

Accounts Payable is what your business owes its suppliers. Ensuring you utilise any interest-free terms or discounts for early payment can be instrumental in improving your cash flow. While purchasing stock or goods at discounted prices can be a great way of improving your gross profit margins, over-spending on inventory that does not sell quickly, or becomes redundant, can create serious cash flow problems. It’s a fine line you need to walk, so keeping a close watch on your spending levels is critical. Never forget Profit does NOT equal Cash.

3.     Do you have a stable customer base who say good things about you?

Without customers, you don’t have a viable business. Finding your first customers as a startup was a significant turning point in your journey. A good customer base brings the bonus of new sales, fresh revenues and a business that can turn a profit.

When customers engage with you and buy your goods and services, which confirms your original faith in your business idea, you provide something they value and want to purchase. You’re also building a community of like-minded people who all think your brand is excellent.

4.     Do you have a team who can operate the business without you?

You’ll probably have become a jack (or jill) of all trades in the early days. You’ll have run the sales and marketing campaigns, taken care of all the main operational tasks and dealt with the many invoicing, accounting and bookkeeping tasks. Turn the clock forward, and you probably have a team of people around you to take care of these jobs – but could they function without you?

As a successful business owner, it’s essential to have a team who can operate the business without you. If you’re unavailable or need to take a step back from the company, your team can keep things running smoothly.

5.     Do you feel you’ve achieved what you wanted to achieve?

You’ll have sat down to draw up a startup plan in your formative years as a founder. In that plan, you’ll have a clear vision of what this business will achieve.

This vision might have been:

• To scale up over five years, sell up and retire
• To deliver a new kind of technical app and make it the global standard
• To help your target audience improve their lives, supported by your product/service
• To provide the income needed for you to live your desired lifestyle
• Put your profits back into the local community and be a force for good.

We all have different goals, and whether they are financial, personal or ethical (or all three) comes down to the individual. The important thing is to assess whether you’ve met the vision you set out to achieve.

Only you and your fellow founders know whether you’ve met your intended goal. But if the consensus is that you aced it, then it’s time to think about the future.

What’s the next chapter in your business story?

If you can answer yes to all five of these questions, then congratulations! You’ve built a successful, sustainable and profitable business.

But there’s always room for growth, even after you’ve achieved your initial goals for your business. Here are another 10 tips to help take your business to the next level:

1. Expand your product or service offerings. This is a great way to reach new markets and tap into new sources of revenue.
2. Invest in marketing and advertising. A well-executed marketing campaign can help you attract new customers and grow your brand awareness.
3. Consider franchising. Franchising can be a great way to expand your business quickly and efficiently.
4. Open new locations. Opening new locations is an excellent option if you want to grow geographically.
5. Increase efficiency and productivity. Always look for ways to streamline your operations and make your business more efficient and productive.
6. Hire top talent. Surround yourself with talented individuals who can help take your business to the next level.
7. Focus on customer retention. It’s often more expensive to acquire new customers than to keep existing ones. Ensure you’re doing everything possible to keep your customers happy and loyal.
8. Invest in technology. Technology can help you automate processes, improve communication, and boost efficiency.
9. Stay current on industry trends; keep an eye on industry trends so you can anticipate changes and adapt accordingly.
10. Keep growing! Always look for ways to improve and expand your business.

Conclusion

If you set a goal for your business and have yet to achieve it, don’t despair. You can do plenty of things to increase your chances of success. First, evaluate your current situation and see what’s holding you back. Are there any areas where you can improve? Once you’ve identified the problem, take action to rectify it.

If you are looking for support on your journey to create an amazing business, contact our team at Numble for professional advice – we offer free consultations for small businesses. Remember, achieving your goals is possible with perseverance and dedication!