02 Sep Setting Goals as a Small Business Owner
We’re going to make a couple of assumptions here to start. You’ve researched your market and determined a need for your service exists. You have the skillset required to earn repeat business and you know how to price your work accordingly. You’re working in your business more than you are working on your business. And you’re ready for a change!
Every small business should be unique to its owner, market, function, etc., but there are also fundamentals that need to be in place in every business. First, you need to know who you are now. Maybe you’re the person with OCD who spends extra hours and extra materials every single time because it pains you to send out a job that isn’t right. Maybe you sell on high efficiency, but still deliver white glove treatment. Or are you just like everyone else around you grinding through whatever comes your way? Regardless, take a good look at the business coming to you now and define who you are today. Next, start laying out who you want to be. Some people will say set a ten-year goal, some will say five and we’ll say both are fine, but define exactly who you want to be in the long term. What will revenue look like? How many employees will you have? How many hours per week will you be working? Will you have more than one location? How much profit will the business make each year?
This will drive your goal setting and ensure there’s a purpose to everything you do. You’ll set up periodic check-ins to ensure the goals you set and your major business decisions line up with your long-term vision of the business. Now, take the time to lay out your core convictions and values which will best drive you from now to your ideal vision of the business. Be true to yourself as you do this and take your time because this must be exactly right. Lastly, create a reference list of the biggest barriers to your success. Make sure this list is comprehensive and make a few passes at it to ensure you have drilled down to the core issue. With these items checked off your list, you can start looking at the goals which will elevate your business.
This is not just a dollar number that gets paid to a consultant, Google, Facebook or whomever for advertisements. Really think about this. How many jobs do you want every month to meet your revenue goal? What percentage of your leads convert to paying customers who fit your ideal customer profile? There is a number here and you should know what that is. 20% is a typical lead conversion goal to start. Make sure you know the difference between a lead and a quality lead. Social media is big, but what other marketing channels can you make use of? What local shows and clubs can you use for networking?
I think it’s good to look at a 5% decrease in expense from the previous year as a baseline. This doesn’t just include supplies, but time management, marketing, etc. Do you have tools in place to run effectively and efficiently in all aspects of your business? This is an area where you can focus on working smarter while you work hard. Detailing supplies will be in the $10/per car range and your coatings will offer your biggest markup opportunity, so take the time to make sure you use the right products from a time management standpoint. Don’t reduce expense by cutting corners, rather by knowing what products, locations and techniques make you most effective.
What’s that long term number and what incremental steps get you there? Keep your yearly number linked to that big picture vision. If they are out of alignment, then you’re spinning your wheels. You’ll have years with exponential growth (opening a new location or increasing your employee count), but mostly you’ll see incremental increases. Set a number that makes you just a little uncomfortable. In addition to your overall sales goal, set a transaction goal. One of my first jobs was at a frozen yogurt shop and I became the king of the add on there. We kept a frozen case next to the register. It’s amazing how many people were open to taking home an extra pint of their favorite flavor just because I took the time to ask for that extra business. Create a number that is above your standard package rate.
Are you saying yes to the right customers? Are you quoting the jobs accurately and do you really know your expenses? There’s nothing worse than working your tail off and not getting ahead. If your margins are out of whack it could be an operational issue or a sales and marketing issue. Often it’s both. Start with figuring out where you are now and calculate what profit you should be making. Does that profit margin fit with your long-term goal or do you need to generate more margin? Most likely you can set an aggressive goal in the first year. Make sure you are accounting for your time/labor and every pass over the vehicle. This is the top side of the expense goal. You’ve focused on your costs in that section, so here is where you ensure you are making a profit. Let’s say a coating job is quoted using 6 hours labor at $50/hour, plus $200 for coating, detail supplies, office, etc. and you charge $1500. Do you like that margin? What happens to your margin if the product has high spots you have to rework? Track and account for the time. Would you prefer a 2-hour detail job with $15 expenses and $100 labor for $175?
Personal Development Goal
As a business owner it’s important to know what you’re good at and what you suck at. Know if you should be the one filling in a knowledge gap or if you should bring in support. You have to stay up on technology and trends in your field, plus understanding sales techniques and the local business climate. You can’t keep up if you have your head buried in the business all day. Business owners have to look for continuous improvement or get left behind. Get sales training if you struggle with the upsell. Find a group you can join and share ideas. At least one major goal each year needs to be in an area that isn’t directly related to the day-to-day business. You need to be in a good headspace for growth, so that means making the time for non-business activities. We know this life passes too fast and it’s important to recognize that we choose how our time is spent. Own your time and commit.
Your goals have to be easily defined and quantifiable. Avoid grey areas and make everything as specific as possible.
Commit to your goals by making them public to a mentor or peer group. This is why we have developed a network of installers and master detailers who are always available to you.
Reward yourself as your goals are met and exceeded.
In future posts, we’ll break your goals and issue lists into manageable tasks. If you can’t wait for that or have specific curiosities, then reach out. This is why we have a network.