New Year’s Resolutions vs. Business Goals
It’s that time of year again. The time to sign up for a gym membership only to cancel it in February or register for that triathlon you want to finally do, but only the one with a refundable deposit. It’s also time to talk about New Year’s Resolutions vs. business goals.
The reason is simple. Goals are things that you can set milestones for, measure and achieve. Resolutions without real goals to back them up are things we often surrender early in the year. What does all this mean, and as we enter a new decade, what will your resolutions and business goals look like?
Resolutions vs. Business Goals
The difference between resolutions and goals comes down to a few simple things. Resolutions are often vague, large, and long term. For example, “I want to lose seventy pounds this year.” When it comes to business, they are often things like “We want to increase profits 20% YOY” or “We want to reduce production costs by 7% this year.” There are no milestones and actionable items yet. Instead, we are dealing with large ideas with a long-term timetable.
Instead, goals involve action items and can also include the resolution. Using the weight example, a goal would say “I’m going to lose seventy pounds this year by increasing my exercise by 10 minutes a day until I am exercising an hour every day. I will also cut my intake of sugar and processed foods by 10% weekly until less than 10% of my calories come from those foods.”
Note that there are steps that must then be broken into milestones that include daily, weekly, monthly, and longer-term goals that can be measured. For example, if you want to increase profits, this may include cutting costs and increasing revenue, but you’ll have to set individual goals and milestones inside those methods in order for them to work.
The point is that resolutions, written on paper and put in jars, but without goals, are seldom accomplished.
Motivation vs. Inspiration and Passion
So what drives you toward your goals? I would argue that there are two possible drivers that are very different: motivation vs. passion and inspiration. What’s the difference and why does it matter?
First, an example. A person can be motivated to run from a building if it is burning. But eventually, as the heat fades, they will lose their motivation to run. If someone chases them from the building with a stick that is on fire, they may sustain motivation longer, but it will fade. Generally, motivation is often doing something out of necessity. Motivation gets things done, but it does fade and is only renewed by another need.
Passion and inspiration though is doing things because you want to. Remember when you first started your business and it was your “baby”? You probably even cleaned toilets, washed windows, and did all kinds of tasks to make sure everything was perfect. As your business grew, you no longer wanted to do those things or even did them. You probably hired others to do them for you.
But you need something in your business that inspires you. Those things need to be part of your business goals in order to feed your passion. Money is rarely enough reason to keep doing what you are doing, but doing what you want to do and love doing is what keeps most entrepreneurs in the game.
If you have lost that passion and inspiration, it is either time to get them back or to sell your business and move on to something you can truly be invested in.
Business Goals that Allow for the Unexpected
There is one thing that is sure in the business world, and that is the unexpected. Sometimes this can be a good thing. You could have a huge influx of business that you need to adjust to handle, or you might have a drop in business because of a natural disaster or an unforeseen change in your industry.
You might also experience personal changes, both positive and negative that might impact your business. In fact, if you look at the last couple of years, you can probably point to some instances that fit this pattern. While you can’t plan for such things, you can structure your business goals to make room for natural ups and downs to make sure you are prepared.
This means tracking and planning for cash flow, building savings and emergency funding, and using credit wisely. It also may mean that you need to have a contingency exit plan in case of illness, injury, or other circumstances.
Long- and Short-Term Exit Planning
Every business owner will leave their business at some point, and most want to sell their business as part of their retirement plan or a plan to move on to another phase in their lives. However, they are often very bad at planning that exit, and especially making just in case plans if something goes wrong.
However, no matter how and when they exit, the sale of their business or its closing will be one of the most financially significant events in their lives. For businesses who plan thoroughly for nearly everything else, making an exit plan, both short and long term, is critical.
One of the critical parts of that plan is knowing what your business is worth. At Rogerson Business Services, we offer a FREE seven-step business evaluation tool with everything you need to get a general idea of what your business is worth. If you need a more thorough valuation or the process is just too complicated for what you want to do on your own, we offer those services at a reasonable rate as well. Feel free to contact us for a valuation today.
Often, this process will reveal things you need to do with your business to make it more marketable and profitable long term. But if the unexpected did happen, and you had to leave your business sooner than you planned, you could be better prepared.
For some business owners though, looking at the next year or the next decade may tell you that now is the time to sell your business. If this is you, and your business is located in California, contact Rogerson Business Services today. We’d love to talk about the next steps to selling your business.
There is nothing wrong with New Year’s Resolutions. They are more achievable when backed by goals. If one of your goals this year is to sell your business based in California or to learn what your business is worth for whatever reason, we’re here to help.
We hope your 2020 is amazing, and you achieve all of your business goals.