When you look back over this year, how happy are you with your business’s performance? Are you patting yourself on the back, having nailed every goal? Smiling as you look over your long list of milestones achieved? Resting on your laurels?
If the answer is no, then you’re like many business owners who struggled to hit their business targets. You know exactly what you want—a bigger business, larger per-customer sales, more leads, higher profits—but you struggle to meet your goals.
At Phorest Salon Software, we provide advice to salon businesses on our blog, from setting targets, to financing, managing staff, marketing strategies and more. In this article, we’ll show you how to set clear, actionable goals for your business, and how to make the changes you need to power your way through them. Let’s make this the year you hit every business target you set.
1. Get clear on the goals you want to prioritize
One of the biggest challenges in any business is that everything needs to be done at the same time. You need to find new clients, keep your existing clients happy, manage your finances, streamline your processes, and motivate your employees—all at the same time.
When it comes to setting your big, overarching company goals for the year, you must know what your top priorities are.
A SWOT analysis is a fantastic way to be crystal clear about what needs to be addressed first. It analyses your business’s Strengths, Weaknesses, Opportunities and Threats.
Let’s take the example of a beauty salon. You sit down to do a SWOT analysis and identify the following:
Now we can see how to use this SWOT analysis to set priorities. Don’t choose too many goals or you risk spreading yourself too thin.
Pick three priorities for which we will create goals:
- Increase revenue from existing clients by selling them new products
- Increase client base and revenue by creating targeted marketing for workers in new office buildings
- Use Instagram to market your business and build upon your great reputation
If you’ve never done a SWOT analysis before or could use a refresher, you can find a useful template to follow here.
Please note: These aren’t actually goals yet! They are your key areas to focus on. After you’ve discussed them with your team, which we’ll cover next, you’ll be turning them into SMART goals to make sure that you’ll take action on them.
2. Review these goals with your team
Every successful business owner knows that the people who work for you are your most valuable asset. This is never truer than when you are defining your business goals.
Your team is out there every day, working on your products or talking to clients. They are the people who can tell you what’s working and what’s not, what’s holding your business back and where you should be focusing your efforts and setting your business goals for the year ahead.
So, once you’ve completed your SWOT analysis and selected what you think should be the top goals for your business, sit down with your employees and get their feedback. They may agree, or they may have useful insights which you haven’t thought of.
Even more importantly, involving your staff in the creation of your business strategy will motivate and inspire them to reach those goals.
As Dale Carnegie put it,
“People support a world they help create.”
By involving your employees in the goal-setting process, you make them feel valued and engaged, while at the same time making sure your goals are realistic and achievable.
By collaborating with your staff, you can also make sure that you word your goals in a way that is accessible to the whole company. In order to engage employees to work towards goals, you need to be sure that the goals are clear, well-defined and easy to understand.
3. Are your goals SMART?
O.K., so you’ve decided on your 3 to 5 business goals. Now it’s time to develop them from the idea stage to the action stage, and create SMART goals:
- Specific: What exactly are you going to do?
- Measurable: How will you know if you are succeeding?
- Achievable: How will you implement the goal?
- Relevant: Does the goal connect to your overall objectives?
- Timely: When will you achieve the goal by?
Let’s take one of the salon business goals we decided on, and turn it into a SMART goal—say, for instance, our plan to increase our client base and revenue by creating targeted marketing for workers in the new office buildings.
- Specific: Gain 10 new customers for the salon from the new office building.
- Measurable: Measure progress by tracking number of new customers won and profits made, while maintaining our existing customer base.
- Achievable: We will do this by creating a customized sales promotion, which we will publicize via leaflets and flyers in the office building.
- Relevant: This will help us to increase the number of new customers, and thus grow the salon business and profits.
- Timely: We will achieve this by the end of Q2 2018.
4. Set your KPIs
Now that you’ve built your goals with your team, and converted them into SMART goals, you need to think about implementing two aspects: measuring your goals and setting timelines.
Remember, as Bill Hewlett put it,
“You cannot manage what you cannot measure…and what gets measured gets done.”
The most common way of measuring whether or not you’re on track to achieve a business goal is to set KPIs.
KPIs are Key Performance Indicators; these are numbers you can track that show if you are making progress with your goals or not, as well as being great motivators. You’ll already have established the KPIs you need to measure when you’ve ensured your goals are SMART.
To take our example above, a KPI would be the number of new clients won from the office building (which means we’d need to make sure we have a way of keeping track of where our clients were coming from). We might also want to consider setting KPIs for how many flyers we hand out, how many calls we received as a result of the flyers, how much each new customer spent and whether or not they came back to the salon.
You will also have different KPIs for the business as a whole such as overall monthly sales targets, as well as setting individual KPIs for every staff member. We have encouraged our clients to set staff targets on the Phorest blog as an important way to motivate your staff to meet company goals.
Research suggests that companies that align individual goals to company objectives have a much higher rate of success.
In our salon example, our company goal is to increase our client base and revenue from a specific target market. However, this goal might translate into different KPIs for an individual hair stylist, for instance:
- Customer satisfaction (to retain the new customers)
- Amount spent per customer (maximize profitability)
5. Build good business habits to help reach your goals
As a business owner, as in life, if you want to make something happen, you need to create a schedule and build good habits around it.
If you want to lose weight, you know you need to include exercise on your schedule and plan time to cook healthy meals, and so on. If you want to achieve your business goals, you need to think about them in the same way. The actions that will achieve those KPIs need to be scheduled.
Automate as much as possible. Use a calendar for both you and your staff, and add reminders. Use online to-do list software like ToodleDo to organize tasks, set deadlines and prompt you for repeat actions. Put key goals on your office wall or in the staff meeting room to keep them visible.
And, crucially, regularly review and analyze your progress, and resolve any issues; review if you’ve have the right KPIs in place, and constantly optimize your processes to improve them, if applicable.
This might all sound a little overwhelming, but it’s much less overwhelming than the feeling that you’re drowning in work and are nowhere near to achieving your goals.
By identifying and reviewing your key focus areas, setting SMART goals, defining KPIs to track your company and individual progress, as well as putting systems in place to make sure you are sticking to the schedule, you’ll put yourself in the best position to make 2018 the year your business really starts to shine.