SET PROFIT MAKING GOALS

ALL BUSINESSES SHOULD SET ACHIEVABLE BUSINESS GOALS

Every business small and large needs a set of achievable business goals. And just like in the business planning stage, some goals are explicit and others, by their true nature, are implicit. All aspects of your business action plan should have goals.

In this post, we’ll briefly discuss implicit goals.  These goals like implicit plans are normally not written down and are mostly a figment of top management’s culture;

                 the motivation of the individual top managers, their collective motivations, and thoughts about certain desired but currently unachievable goals. It would behoove them work from examples of smart goals.

                 Using a list of smart goal examples can provide various personal goal targets.

                Using a list of smart goal examples can provide various personal goal targets.

 

These goals like implicit plans are normally not written down and are mostly figments of top management’s cultural leanings, plus the motivations of the individual top managers,

their collective motivations, and thoughts about certain desired but currently unachievable goals.

plus the motivations of the individual top managers, their collective motivations, and thoughts about certain desired but currently unachievable goals.

Normally not attempted or accomplished by managements,  It would behoove the firm’s management to work from examples of smart goals.

Using a list of smart goal examples can provide a picture of various personal business goal targets.

It would behoove them work from examples of smart goals.Using a list of smart goal examples can provide a picture of various personal business goal targets.

 

DETERMINING A FIRM’S IMPLICIT GOALS

Although not normally expressed the implicit goals are nevertheless still important. Since they mostly exist and are formulated in the top manager’s thoughts and actions;

it will be very difficult for anyone to surmise any firms implicit goals.

We mentioned them here to acknowledge only that they exist.

It is possible to maybe determine a firm’s implicit goals by looking at the company’s operational and overall business plan. 

The company’s actions and accomplishments will provide some inkling as to a firm’s implicit goals.

Take for example, by analyzing a firm’s product(s), its product(s) line it is possible to determine a business’s implicit ideas regarding product line, quality of products, and pricing strategy. 

 

A thorough analysis of their advertising, marketing, planning, and sales plan will provide information about their  implicit distribution channels, sales, and marketing goals.

 

The major shortcoming to having and operating under implicit goals is that sometimes no-one else, some who may be in key positions to the success of the organization, understand or know what they are.

Without a consultant pointing the way, most in the firm’s operating and middle managers know little about or understand these goals.

For this reason, alone, implicit goals can sometimes and often do cause misunderstanding throughout an organization.  

When there is too much gap existing between a firm’s organizational behavior and its implicit goals;

 This can lead to missed production marks, missed sales and advertising targets,  and an underachieving marketing effort. 

Any further discussion of any firm’s implicit goals is currently beyond the scope of this post.

 

MANAGEMENT’S PLACE IN SETTING ORGANIZATIONAL GOALS

A smooth operating business organization will have set a set of clear, understandable, and consistent explicit goals. And, any and most implicit goals will be covered, in such areas as in comprehensive employee training or in a written codicil to all the explicit goals.

And, any and most implicit goals will be covered, in such areas as in comprehensive employee training or in a written codicil to all the explicit goals.

Any implicit goals will be covered, in such areas as in discussions about comprehensive employee training or in a written codicil to all the explicit goals.

For an organization to be effective in goal setting, both the explicit and implicit goals of the organization somehow must be communicated throughout the organization.

For an organization to be both profitable and successful, everyone must know, understand, and sign on to the goals of the organization, whether explicit or implicit.

 

EXPLICIT GOALS FOR AN EFFECTIVE ORGANIZATION

It is the responsibility of a firm’s top managers and middle management to collectively establish a set of explicit, implicit, and tentative goals.

Use of a smart goals worksheet would be helpful in this process. We’ll discuss tentative goals, but, in reality, all goals are tentative.  

In the opinion of the author of this post no goal can be considered a real goal until it legitimacy is tested later on in the planning process.

In a list of long term goals, a business should, at a minimum, establish goals for:

     1.  Marketing;

     2.  Financing;

      3. Sales;

      4. Advertising;

       5. Organizational;

       6. Human Resources;

       7. Manpower;

       8. Budgetary; and,

        9 Profit.

A DISCUSSION OF ESTABLISHED BUSINESS GOALS

 

The list of the above necessary smart goals examples are needed by any business is now going to be briefly discussed:

A.   Marketing Goal will probably be the steps necessary to produce, sell, distribute and bring the product to the market;

B.    Financing Goals could consist of obtaining the needed funds to conduct business, hire staff, meet a payroll, and to finance a sales force;

 C.    Sales Goals will probably include method of sales, numbers of sales staff and expenses, desired sales locations and  anything else related to sales;

 D.    Advertising Goals will cover media, methods of advertising, advertising expense, advertising savings and effectiveness;

 E.    Organizational Goals will cover various reporting relationships, performance requirements, anticipated savings and efficiencies as a result of the organization;

  F.    Human Resource Goals   will cover all manpower needs for a certain period of time, such as number of staff  needed to staff the firm’s administrative and operating functions, employee standards, employees performance, code of  conduct, employee benefits, pay standards,   employee evaluations,  record keeping, and etc; employee benefits, pay standards, employee evaluations,  record keeping, and etc;

 G.    Manpower Goals   This planning item can be a separate entity but can be combined with Human Resources Goals.

 H.   Budgetary Goals    Probably the most important of all the goals. Roadmap to pay for all the other goals.

  I.    Profit Goals   The bottom line, the whole firm’s dependence is on setting and getting this goal right.

SETTING A COMPANY’S EXPLICIT GOALS

 

A good tool to have for analyzing a firm’s explicit goals is a goal planning worksheet

This should consist of business objectives examples of a list of long-term business goals examples. 

Although, goals can be established for a list longer than the one’s discussed above.

Our examples will be limited to four areas to show the importance of setting goals and to reveal some of the desired comprehension needed to bring adhesion and vision to a firm’s goals.

Our focus will concentrate on four (4) areas:

  1.  Financial goals.
  2.  Goals for products and services offered.
  3.  Goals for The marketplace, and;
  4.  Goals for Organizational structure and style.

 METHODS FOR MEASURING FINANCIAL SUCCESS

1. A business firm can measure the financial performance of itself in many ways. Some use as the first measure of performance, a firm’s total sales volume.

2. This measurement for a goal is normally more appropriate to the small business.

3. Since this is mostly a measure of any decreases or increases in sales volume versus the absolute amount of sales the firm generated.

4. The underlying assumption behind the adoption of sales volume as a good indicator of earnings is the assumption that increases in sales volume indicate income profitability;  

And that decreases in sales volume point to losses in a firm’s monthly income plan and poor profitability. 

5.  Viewed critically, this view of the data in a financial goal planning worksheet may be and often is incorrect.

                 For example, there are studies of a number of America’s major corporations placing a major emphasis on growth in sales as their main measure to financial profitability. 

                  In the opinions of the majority of these corporations, their growth in sales did not necessarily lead to enhanced corporate profitability or returns to shareholders.

6.  In fact, it has been discovered that using only the sales growth volume as a measure of financial viability and profitability sometimes causes trouble.  Many of these corporate giants, despite sales growth, began to experience tight cash binds and poor cash flow.

For the large and small corporations to use only sales volume as a measure of total corporate profitability is extremely shortsighted and should be reviewed.

7. Another popular profitability measurement in small business goal setting is to measure revenue against expenses and if revenue exceeds expenses, then the business is successful and profitable.  This emphasis measures something, but it misses a key point.

 8. The point is that the firm must have profitable sales and revenue. Profitable sales are where sales growth is coupled with a corresponding reduction in business administrative, and operating expenses, or some other cost type savings.

Many large corporations use ROI (return-on-investment) as means of measuring the achievement of performance goals. Many times, it would behoove the small business to also adopt this method.

9.  Another measure of financial goal achievement can be set by assaying the level of cash from all sources generated by the business.

We provide the above-mentioned ways to measure financial goals to emphasize that all businesses’ must have financial goals.

Without financial goals and measurements, a firm may have great sales volume, be profitable, and be growing, but without a cash flow goal measure, it may still be running out of cash.

 

OBTAINING PRODUCTS and SERVICES OFFERED  GOALS

The true or main objective of any business is often debated but is thought to be only to make money. This concept is a full-speed ahead and uses whatever means it needs to use to accomplish it one objective… make money.

This concept is a full-speed ahead and uses whatever means it needs to use to accomplish it one objective… make money.

Many times this is a shortsighted way of assaying goal achievement. Some managers realize that the bottom-line is important but their strategy is much broader than just to make money. They may have plans and goals for other corporate matters.

 

MARKET PLACE GOALS

Management must always be cognizance of its marketplace. It must consistently ask itself what is it trying to accomplish in the marketplace.  Some questions must be answered, such as;

 A.  Who are its customers?

 B.  How is the firm going to market and sell to their ideal customer?

 C.  How will they distribute the product?

  D.  Approximate size of their market?

 E.   Can the market grow, and will the market grow?

 F    What’s our current market share and do we need a larger share of the market?

 

ORGANIZATIONAL AND STRUCTURAL GOALS

Efficient managers will often have established goals in relation to their organizational structure and style.  Questions that may arise in setting these goals are;

      A.   Will the organization be formally or informally structured?

      B.   Will decision-making be centralized, decentralized, restrictive, or loose?

      C.   How much autonomy will each level of management have?

      D.   Will there be a competitive or cooperative corporate atmosphere?

      E.    Corporate communication flows and levels.

These goals should be written down in a goal planning worksheet and reviewed often.  They should be provided during the firm’s planning phase. include these goals in a list of small business ideas. They’ll make money making easier in your list long term goals.

We welcome all and any comments.  Should there be any questions about any material in this post, send an inquiry to bgwillia@joinbigmoneymaker.com