Many small businesses experience exponential growth in the early stages, but can’t figure out how to increase sales when business growth slows down. Experiencing this plateau is often not a signal of incompitence, many of the most capable business owners experience this. We’ve found, when talking to a variety of clients, that the issue usually stems from a failure to set the right type of business goals.
We’ve heard it so many times before. Even the most ambitious business owners say it. When asked what their goals are for the year we’re hit with the same answer: “to make more money”. Of course at it’s core this is true, but it’s not a real goal. In hockey you wouldn’t aim the puck at the entire opposing teams zone, you’d aim your shot between both posts, under the crossbar, and in the zone that is unprotected by the goalie. Business goals should be the same, you can’t hit your target if you have nothing to aim at.
Why working backward will launch you forward
Many business owners think that they should start with a dollar amount, but again this is the wrong approach. In order to choose a financial target, you need to work backwards and figure out what financial target is realistic, based on factors such as average transaction value, current sales, product pricing, and more.
The key to setting realistic financial targets, is to say “this is how much I am currently selling, and this is how much I am currently making, how much would I need to improve, for me to consider this a success?”
Seeing the bigger picture, and setting your trajectory
A lot of small business owners figure out what their goal is but not the why. It is just as important to determine how your goals will benefit the longterm trajectory of your business. By doing this you can set your course, and ensure you’re building your business in the right direction.
For example, adding a certain product or service to your offering may make you more profitable in the near term, but may conflict with your businesses values and longterm goals. If you were Rolex you wouldn’t sell a digital watch, no matter how much money it would make.
Business goals are like a physics equation
Setting business goals is about the velocity at which you want to grow your business. In order to calculate velocity you need direction, distance and time. It’s not enough to figure out the why (direction) and have a sales/finanical goal (distance) without a deadline at which you want to achieve this goal (time).
Depending on your business these can be different time-frames. For seasonal businesses, it may be a 6 month time horizon and for others it may be an annual target. The important thing to remember is there’s no one size fits all approach for setting a deadline for your business goals and it doesn’t always have to line up with the fiscal quarters, as many would be inclined to believe.
How to Increase Sales when Business Growth Slows Down
By taking a step back and evaluating specific, measurable, achievable, relevant, and time-bound goals, you set yourself a clear path of action that allows you to to work toward that goal without wasting time and resources on the wrong strategies.
By taking these steps, you set your business apart from all those who took the action, but never took the step back and set real goals in the name of efficiency.