Every New Year most company’s hit the reset button on their objectives and KPI’s for the next 12 months. While most organisations have their own processes for reviewing objectives, we have compiled our list of classics to help those who are starting new businesses or who would to improve their existing processes.
Step 1: Review your long term vision and goals
A business plan is a compass for your business and helps you evaluate where you are and where you need to be.
By analysing your vision, you allow yourself to step back and identity how your business needs to shift over time to hit your goals.
For some it is common to set goals at the beginning of the year and loose sight of them over time as you get flooded with work.
Instead try to focus on establishing a goal-setting process that keeps you and your team on the right path forward.
Part of this involves reviewing your monthly progress and identifying if you are on track towards your goal or if there are any hurdles prohibiting your progress.
Step 2: Perform SWOT Analyse
A SWOT Analysis is a tactic to revel blind spots that you might not see on a day-to-day basis.
By slowing down and asking yourself self-evaluating questions, you can unveil essential information about your business and locate pain-posts you should address.
As a best practice, strive to complete a SWOT analysis quarterly to keep yourself accountable and aligned with your goals.
Step 3: Set Macro Goals
What do you need to accomplish this year to achieve your vision?
Identity 3 – 4 goals for your business that are aligned to your long term vision*. These goals should be SMART: Specific, Measurable, Achievable, Realistic and Timely.
*Long term goals vision should be something you want to achieve in the next 3 – 5 years.
Step 4: Identity KPI’s to track your success
Monitoring goal progress is a crucial step that comes into play between setting and attaining a goal and ensuring that those goals are translated into actions.
The more often you monitor your goals, the more likely you are to achieve them.
Metrics are a great way to measure progress over time and reveals if you are in track towards achieving your goals.
Some metrics to consider:
ROI Indicators: helps determine whether an investment will result in a return (profit) or not. Example “ An investment that guarantees a return rate of 20% is greater that one that only offers an ROI of 10%”
Profitability: tracks a business profit margin and compares that data to target goals. Used to determine if any adjustments are needed to reach the goal. This data can be used to change the sales method used to generate profit.
Lead Generation: Helps business track and assess the prospect stage of acquiring new sales. Average lead response time and percentage of follow ups are examples of good lead generation metrics to track in sales.
Step 5: Prioritise initiatives
Once you identify your 3 – 4 big goals you need to brainstorm 5 – 6 strategic initiatives on how to achieve them.
Take into consideration your resources and prioritise each initiative accordingly.
Step 6: Build your strategy to implement each initiative
You now have your goals and objectives defined and know what you are working towards (your vision) – it is time to plan how you will implement these strategic initiatives.
Example of Company ABC Objectives & Goals:
Company ABC has a 3 year vision of hitting 10 AED in revenue.
Year 1 Goal: 5 million AED
Year 2 Goal: 7.5 million AED
Year 3 Goal: 10 million AED
Breakdown of goals per month/ week/ day
Annual Goal of 5 million AED
Average sale size: 2000 AED
Year: 2,500 transactions (average sale size/ revenue goal)
Month: 209 transactions (Number of sales needed/ 12 months)
Week: 48 transactions (average sales size/ 52 weeks)
Day: 10 transactions (number of sales needed a week/ 5 days)
Once you get down to day transactions you can then break it down further to see how many calls or meetings each sales person should schedule to achieve those targets.
Step 7: Hold Yourself Accountable
Accountability comes into play as soon as your goals are defined.
It is tempting for business owners to get bogged down by the day-to-day activities of your company but this approach won’t hold you accountable for the bigger picture.
As best practice, spend 2 – 5 hours per week thinking about what is going well and how they can be improved.
Developing a plan for your business can be done at any time of the year and helps breakdown your goals into digestible and actionable steps to keep your business on track.
If you are looking for an accounting partner to help unpack your business needs and goals contact us on [email protected]oaccounting.com or complete our contact form