Michael Johnson, managing director of Card Connection, explains why setting goals is so important in business
Whatever business you are in, goal setting is important. If you don’t know where you are going, how will you know when you’ve arrived? Without a goal you will not move forward, but simply go around in ever decreasing circles.
When it comes to business, goals are often financial and a typical vision may be to build your franchise to a certain size within a set time period. In order to achieve this, you will also need to specify further actions, or ‘sub goals’ - a road map to ensure you can achieve your overarching objective. These may include taking on a specific number of new customers within a specified time frame or hiring a new staff member who will bring in a certain amount of revenue to contribute towards the growth of the franchise.
Goals are often described by the mnemonic SMART, which means they should be specific, measurable, attainable, relevant and timely.
To create a specific goal you need to consider what needs to be accomplished and why, and determine who will be involved and where. To make the goal measurable, think about quantities - how much and how many? How will you know when you have achieved what you set out to achieve?
Attainable means realistic. Introducing an objective that is impossible to achieve will be demotivating and quickly discarded. Yet attainable doesn’t necessarily mean ‘easily achieved’ - it may well require some stretch from you and your team in order to reach it.
Relevant means making your goals resonate. Tying them to personal objectives can be helpful and make them feel real and worthwhile.
Timely means introducing a time frame that gives achieving the goal a sense of urgency and therefore creates a motivating effect. The time frame also makes the goal easily measurable.
Having clear, SMART overarching objectives and defined sub goals can be tremendously motivating for both yourself and any employees. It is much easier for a team to pull together if they can clearly see the goalposts they are aiming at. The process of defining a direction also helps when it comes to allocating resources and making decisions to follow the strategic pathway ahead.
Objectives also give you a yardstick by which you can measure the success of your franchise, while the sub goals provide an early indication if you are not reaching your targets - at which point you can seek your franchisor’s help if necessary to get you back on track.
Planning is critical to achieving the goals you have for your franchise. The old proverb ‘If you fail to plan, you plan to fail’ is particularly relevant. With the continued current macro economic challenges faced by every business owner, planning for successes has never been so important. Careful advance consideration can identify new opportunities and also give you time to take action to minimise the risks of any given scenario.
Planning for the long term is as important as doing so for the short term and is usually the first step. Most business owners should think in terms of having a SMART five year plan that they can work backwards to implement shorter term objectives for, say, three months, a year and two-three years.
Working with your franchisor to set this out on paper can help crystallise the vision and introduce the necessary steps that need to be taken in order to achieve the end game. This helps develop it in a way that is easily translatable into action plans.
Those plans will not only be limited to the financial aspects of the franchise. For example, if you are considering taking on staff it can take up to three months to get someone in place. By the time you have advertised, interviewed, taken up references and they have worked their notice period, weeks may have passed. They will also require training and some experience before they are fully up to speed and able to offer the contribution you require.
Similarly, people are often surprised at how far in advance product planning needs to take place. At Card Connection we are developing and showing new ranges of greeting cards to our franchisees sometimes a year in advance. We know in early January what will be included in the following Christmas range. Not only does this help our franchisees plan ahead in terms of ordering stock and display equipment, it also gives them plenty of time to get retail customers excited about the new products, which can provide the edge at a competitive time of year.
If you’re considering investing in a franchise where you need to advertise, planning ahead and bulk buying can mean you can cut better deals with magazines or newspapers. Similarly, sourcing well in advance and in bulk from suppliers can be economically advantageous. However, this will only work if you have carefully calculated how much stock you will need as part of your financial sales plan. There is little point having a lock up full of low priced merchandise if you can’t sell it.
Once you have set your long term goals, working backwards to see how each element of your franchise business fits with that objective provides a road map of actions. From recruitment to product development to marketing, being sure where you need to end up ensures resources, time and preparation are allocated correctly along the way. And this is often the missing link, where high level initiatives don’t get translated into day to day actions that are needed to achieve the plan.
To overcome this, ensure those you are working with understand the importance of the end goal and how and what they need to do to help achieve that. Breaking it down into manageable, shorter term day to day and week to week objectives is key for motivation, keeping on track and is also helpful in measuring success.
Your goals and plans are decision making tools that will help you execute the ongoing running of your franchise. The more thought that goes into the goal setting and planning process, the more likely it is that ultimately success will be achieved.