It’s the beginning of January and our thoughts turn to what we should do differently in 2013: eat more healthily perhaps or to visit the gym more often. It’s also the time when you set goals for your small business for the year ahead. But why not make just one New Year resolution? To set realistic goals.
It’s tempting to set yourself major milestones, because it gives you something big to aim for. Most entrepreneurs tend to be very ambitious and goal-driven, so eye-catching targets are attractive. But beware of them, because they can actually undermine, not strengthen, your business.
The danger is that you become so obsessed by hitting these goals that you lose sight of the bigger picture. For example, you might decide you want to double the size of your business this year. A bold ambition, but one you’re willing to commit to achieving by hiring plenty of new salespeople. You become so focused on hitting your monthly sales targets, however, that you lose sight of another fundamental part of your business, your costs. Before you know it, your business is heading towards oblivion, because even though your sales are growing, your cash flow has hit danger point because you’ve let your expenses run out of control.
Also important is the kind of goals you set, not only how ambitious they are. Rather than saying “I want my business to have 20% more customers by the end of the year”, it’s better to focus on growing your sales by 20%. Why? Because if you’re focused solely on getting more customers then you’ll become preoccupied with making the calls, delivering the flyers, knocking on doors – the mechanics of finding new customers, in other words – rather than paying more attention to what your customers need.
Remember, the first goal of any business for the year ahead is survival, so you need to ensure you are delighting your existing customers before you set any growth objectives. Ask yourself why you’re losing customers in the first place. Are you targeting the wrong people? Are you offering them products they don’t want? Is your service disappointing? If you answer these questions you might actually keep more of your existing clients, perhaps even sell more to them, as well as attracting new customers into the bargain. You’ll have improved your overall customer proposition, not just simply boosted the number of customers you have.
There’s no point in making resolutions aimed at turning you into a different person in 12 months’ time, because deep down we know it will never happen. It’s the same with your business. The objectives you set must be based on a clear-eyed assessment of what your company does right, as well as what it could improve on. Overambitious resolutions are doomed to fail and are liable to leave you feeling demoralised. So go easy on yourself.
Instead, use this time at the start of the year to reflect on where your business stands right now, rather than becoming too preoccupied with where you want it to be in a year’s time. The best goals to set – whether they’re personal or professional – are ones that are realistic and achievable. They should be baby steps, because, if you reach too far, you’re liable to fall flat on your face.