Effective Goal Setting Strategies for 2022
Many business owners make the mistake of waiting until January to start setting business and financial goals for the upcoming year. In reality, you have enough data to do this before the year is up and instead should be focused on mobilizing those goals when the new year hits.
When we set financial goals, it requires us to dig deep and get back to basics with the business owner.
It starts simply with one question: What are your top three priorities for the year?
This drives everything. This is what we like to call the "macro." This sets the tone of where the business owner is in terms of mindset so we can meet them where they are. Notice that this question is not exclusively related to business. This could include personal goals like buying a new house, maxing out a retirement fund or taking a month-long vacation. Now, as a CFO, we are not travel planners nor personal wealth managers. However, these types of goals enable us to understand how you, the business owner, will define success.
From these priorities, you then want to unpack the specifics in your business to identify possible tactical goals to drive action to move you toward that goal. We brainstorm the intentions for the upcoming year in business and allow the business owner to "brain dump" several ideas and topics around their business.
Here are some questions you should ask and use for brain dumping:
What are the products and services that we will offer in the new year? What will be our flagship and what new offerings will launch?
What are the price points of our offers?
Is there seasonality in the year with spikes in sales?
Do we have a solid base of recurring revenue?
For each offer, what are the fixed and variable costs involved? Note: fixed costs are the costs that are there whether you sell more or not. Variable costs are costs that go up when you serve a client. For example: A variable cost would be paying a hair stylist who works for you, who gets paid based on bookings. A fixed cost would be the rent for the salon.)
If we had a fully booked month, how many customers in each of your offers would you be serving?
Do we have upsell opportunities?
How often do we close sales calls (as a %)?
What internal risks are present?
What external risks are present?
This is fairly similar to a SWOT analysis. If you are not familiar with a SWOT analysis, this stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are meant to demonstrate what is going on internally and Opportunities and Threats are external. This is also an effective way to revisit where your business is and where it is heading.
What does this do? It gets you thinking about where your focus is as a business and what your North Star is. If you do not know your destination, how can you program the best route to get there? From a financial standpoint, this also reveals a lot and enables your CFO to conduct forecasting and planning so you can see whether you are positioned for growth.
Want to do your own goal setting session? Email us about booking CFO services at info@fitnancialsolutions.com or by clicking the button at the top of this page.