In my last blog I discussed the importance of setting a BHAG (Big, Hairy, Audacious Goal) for your business – perhaps doubling your revenue or greatly increasing your profits.
The moment you settle on a BHAG can be exciting. You may start to picture your year-end celebration next December, with your staff and Board giving you a standing ovation for generating such a significant jump in turnover…
But goals are one thing. Reaching them is quite another – which is why it’s no surprise that most New Year’s Resolutions are abandoned by February.
So how do you make your financial resolutions for next year stick?
Without a proper execution plan, your goals are doomed to oblivion.
The key is to work backwards….
Once you have a clear goal, you need to figure out what actions you must take to achieve it. Then work out a timetable to implement them.
It’s like Sat Nav. The first step, when you programme Waze or Google maps, is always to enter your destination. Your Sat Nav can’t do anything without knowing exactly where you’re going. Then it calculates the route to get you there….
With your business goals, your BHAG is your destination point. Once that’s clear, you can figure out the route, too.
Here’s an example from our own business. I told you in my last blog that we set a BHAG, last year, to double our revenue. To do that, we needed a larger flow of leads. So at the beginning of last year, we planned a series of events to raise our profile, modernising our website, publishing my new book, and holding a wonderful 25th anniversary dinner. (Now that’s something to celebrate!) It took us most of the year to execute, but it really has pushed us towards our goal.
It sounds so obvious, but most businesses do not operate this way. All too often, companies work forwards. They decide on the actions they’re going to take, and then see where they end up.
Unfortunately, if you don’t have a clear idea of where you’re going, you might not even travel in the right direction. The actions you take might lead you…. Anywhere.
Here’s a great example: Setting budgets.
It sounds like it’s unrelated, but hear me out.
When we work with companies to set their budget, we first develop very clear financial goals in terms of turnover and profit. It’s a BHAG by another name.
Then we work backwards, and figure out what the company must do to achieve those financial goals (sound familiar?). Then, and only then, do we allocate funds. The money goes to support initiatives, teams and actions which help achieve the key targets.
But most companies do this the other way round. They allocate funds to their various departments and programmes first – doling out £300K here, £70K there almost randomly. Then right at the end, they project what their turnover and profit will be at the end of next year.
Of course those projections are completely baseless because there is no roadmap in place to achieve those fantasy figures. And the money is in the wrong places, too!
So when you picture where you want to be next year, make your goal big, hairy and audacious. But if you want those staff and board members raising their glass in your honour in December 2019, make your implementation plan backwards, hairy and audacious.
Actually there is another step you MUST take if you want to see your financial goals come to fruition. I’ll tell you about it next time.
Warm regards,
Garry
PS. Whenever you’re ready… Here are four ways I can help you sort out financial issues in your business:
- Give your company a financial health check.
Make sure there are no nasty surprises lurking in your accounts and that your cash is being handled safely and professionally. Click here to find out more. - Grab a copy of my book, Business by Numbers. Discover how to put the right financial foundations in place for your business, so you can grow faster. It’s like having me at your beck-and-call, 24/7, for less than £10. Click here.
- Work directly with me and my team. If you’d like to work directly with us to make sure you take the very best financial decisions for your business and grow faster, message me and put “Working directly” in the subject line. Tell me a little bit about your business and what you want to achieve financially, and I’ll get back to you with details.
- Join our ‘Just One Day’ programme. We’ll spend a day with you and your directors, putting together a detailed, workable plan to drive your business forwards. Perhaps for the first time, you’ll achieve complete clarity on where you need to take your business – and exactly how to get there. Hit ‘reply’ for more details.
