An important part of setting goals is figuring out how to know they are complete. Although this is a topic typically reserved for December or January, July is actually a great time to talk about goal setting because your 2011 goals are old enough to evaluate, but still new enough to be accomplished. Here are 4 methods for measuring goals that should be considered as you are refining for 2011 and moving into initial planning for 2012.
The Go, No-Go Goal Measurement
When I was in telecommunications sales, a common annual objective was to get products lab tested and approved for sale into major accounts. Customers would provide a lab approval notice that gave the go, no-go for the “lab approval” objective. The good thing about these types of goals is that they are very easy to measure, it’s either done or not done.
However, there is a down side, especially when using it for performance payment. Sometimes your goal becomes impossible a few months into the year – losing a specific RFP or landing a specific client, and at that point you have a goal with no hope of accomplishment. It’s ok to have one or two of these, but be careful not to have a bunch of goals that are impossible by the fourth month of the year.
The Simple Goal Measure
Revenue is a great simple measure, as is profitability. These are things that are already being measured and typically have a history of performance so that a realistic number can be set for achievement. If you can set goals for things you already measure that also accomplish the things you want, it’s a great goal. But many times, you want to accomplish things that aren’t already being measured….
The Not-So-Simple Goal Measure
Many times you want to set goals on things like customer satisfaction and brand awareness, things that are measurable, but ones that you probably aren’t currently measuring. It might be a new goal that just needs to be set up for measurement or one that previously escaped your means to pay for measurement. Many times it helps to figure out a cheaper and easier way to measure something indirectly. Using a well designed web site and Google Analytics can go a long way in measuring certain results, especially things like advertising effectiveness.
Subjective Goal Measurement
Once, I was interviewing a new client, a restaurant owner, and asked how they measured a successful day. I was looking for a revenue number or even a number of customers, but they looked me in the eye and said, “It just feels like everything is going well. Customers seem happy, the orders are moving and the wait staff is smiling.” In the end there are some things we want to accomplish that either can’t be measured or we can’t afford to measure them and that’s ok. Just make sure you realize the shortcoming and do the best you can.
In the case of the restaurant, I definitely recommended they use daily revenue as a measure they were already tracking. But I also told them to count the number of days that things “felt good”, or even rate the good feeling on a scale of 1 to 5, and we could use that as a starting point. Sigma College of Small Business helps small and medium businesses with their business strategies and planning, including setting up goal measurements for the things that you just want to get done.
Tell Us – What is the biggest obstacle you face in setting and reaching goals!
Welcome to our class on “How to Start a Business”, our first topic is on “Exit Strategies”! This opening never fails to get a class full of raised eyebrows, but I’m convinced that considering your exit strategy is an exercise every small business should start with and periodically review.
Starting with your company name…
…most of your decisions will be affected by your exit strategy. Let’s say you want to build your plumbing business over a few years and then sell. Using your name as the brand will detract value for a new owner with a different name. The legal entity; C-corp, S-corp or LLC, that you choose is another big decision made early in the start-up process that can be dependent on your exit strategy. Hiring employees, the value model, buy or lease decisions – your exit strategy may effect all these decisions, which is why I encourage every small and medium business to have one.
In a controlled dissolution exit strategy the business stays in operation as long as the owner is working. When the owner decides to stop working the business is done. This exit strategy is typical of many professionals who are the primary revenue generator for the company – a consultant who bills all the hours or a plumber who does all the labor. There is no passive revenue and the value of the business is basically zero without the owner’s daily involvement.
There is nothing wrong with this exit strategy, as long as it is a conscious decision and the owner plans the rest of the business around it. For instance, the value model is that you pull out as much cash as possible and invest in outside resources, which means the marketing strategy should maximize profitability and cash flow.
An ownership transfer exit strategy is one in which the owner plans to sell his ownership to another party in whole or in part. The most common transaction for smaller businesses is a complete sale to another person or another company. For a few entrepreneurs with the right business concept, “going public” is a valid strategy where the “sale” of the company is to many outside investors on a public stock exchange.
In an ownership transfer exit strategy the value model is about building “transferrable” value. This is the kind of value that can be realized even in the absence of the owner. With this exit strategy the sky is the limit for your return on investment. The value of the company can be a passive revenue stream, typical of insurance agencies, or the potential for growth from a new technology, a high value customer mix or demand for a specific product or process that you own. In general owners with this exit strategy should always be looking for ways to make the business less dependent on them through solid processes and a strong work force. That will make the business much more valuable to any potential outside buyers.
Transition to Passive Investment
This exit strategy is used very often in family businesses. As the kids are able (and willing) to take over the business, ownership is sold or gifted to them over time. The owner either sells them the business and finances it over a number of years, or maintains a diminishing ownership stake as they buy ownership through the transition process. The passive income for the owner is in the form of principle and interest payments on a long term loan, additional sale of their ownership and distributions from the profit of the company over time.
This is a solid strategy when done correctly. First of all, it is imperative that the owner ensures the transition of operations is to someone competent, because if the business fails, the passive income source is done. Also, if you are dependent on distributions or dividends as an income source, make sure the new ownership is planning to make those. If they decide to put everything back in the company, your income source could dry up quickly.
Pick One and Decide Accordingly
Picking an exit strategy is not about predicting the future and yours will probably even change over time. The important thing is to have one in mind so that when you make daily decisions they are based on a long term vision, not just a gut feel for what’s easiest at the time.
Of course there are many variations and nuances to exit strategies and I’d love to hear about your experiences or struggles in deciding on and implementing an exit strategy. If you need help in this area give Sigma College of Small Business a call and we can help.
Last week I presented a “Hands-on” seminar for the Greater Warrenton Chamber of Commerce to help small businesses use Constant Contact email marketing to help grow their business. The seminar was based on these 8 Tips to Boost Your Email Marketing. Sigma College of Small Business chose to be a Constant Contact Partner and Certified Local Expert last year because of the ease of use for developing professional emails and their support for social media channels.
1. Add Value
Bottom Line – people will only open, read and act on emails they find consistently valuable.
- “Email special” discounts, sales and insider info
- Industry and community news – edited to highlight the value to your audience
- Opportunity to interact and share
2. Keep it Opt-In
Maintain a conservative definition of “opt-in” and manage your list to keep it that way.
- Sending to people that don’t want to hear from you can be negative
- Building a relationship they started is always better
3. Subject, Subject, Subject (and headline to Match)
You have a split second to catch their attention, don’t waste it! And confirm their “open” decision with a clear, related headline.
- “Our Monthly Newsletter” = “I can read this later” = “Will read when I have more time”
- YOUR AUDIENCE WILL NEVER HAVE MORE TIME!
- “Your Back Will Thank You”, “Get the CEO off Your Back”, “Are You Giving Your Profits Away?”
- Use a txt headline at the top of the email to confirm it’s not a trick
4. The Length and Frequency Principle
Keep frequent emails short, with one or two timely key points. Less frequent emails can be longer.
- A daily newspaper doesn’t publish each day with news from last week – if you are sending daily or weekly, have content that changes daily or weekly.
5. Using Lists
Using multiple lists gives your audience choices on content and frequency to match their needs.
- Monthly Newsletter, Weekly Specials, Daily Tip OR Engaged, Recently Married, With Children
- Tell each audience what they should expect and then deliver!
- Consistency – Delivery, Content, Format, From
6. Keep your emails consistent
Deliver at promised times with expected content that matches subject
- Consistent format will help brand recognition and using a recognizable email will help
7. “Join My Email List”
Ask people to join your email list – tell them why they should and then deliver.
- Put “Join My Email List” on web sites, Fan Pages and in email signatures
8. Social Media Promotion
Use the Constant Contact social media tools, but don’t stop there!
- “Look for ‘Your Back Will Thank You!’ in tomorrow’s monthly email newsletter.” Join Now!
- Connect your social media to Constant Contact and use the share and tweet functions.
Email marketing can be especially useful to small business owners because it can convey a personal message to clients on a consistent basis at very little cost. If you have questions about getting your email marketing working better, post a comment or contact us at info@SigmaBizLearning.com or (703) 468-1465.