Where Do You Want To Be?

You need to define where you want to be, preferably in the form of targets and milestones- your future "destination". Try this exercise. Don't be concerned if you cannot complete the exercise in the level of detail suggested. The purpose is to give you a sense of direction - you can fill in the gaps in late.

Defining Targets

What large ambitions - "Big, hairy, audacious goals" in management-speak - do you have for your business?

What are your overall targets:

  • > For year 1?
  • > For year 5?
  • > For year 10?

Can you set more detailed targets for your business' performance?

Financial

Next year

Next year + 1

Next year + 2

Sales




Gross profit




Net profit




Your own salary




Total promoters/management team remuneration





Customers

Next year

Next year + 1

Next year + 2

Number of customers




Average purchase per customer




Average purchase per customer - units of product/service





Products/services

Next year

Next year + 1

Next year + 2

Percentage of total sales accounted for by each of the business' top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3




Number of products made/hours of services supplied for each of the business' top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3




Average cost of each unit of product made/cost of service provided per hour

for each of the business' top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3





Assets and liabilities

Next year

Next year + 1

Next year + 2

Fixed assets




Cash




Stock on hand




Money due by customers




Money due to suppliers




Total Working Capital




Less Borrowings




Total Net Worth of Business








Equity contributed by promoters and management team




External equity




(External equity as a % of total equity)




Profits retained




Total Shareholders' Funds





Other measures

Next year

Next year + 1

Next year + 2

Number of staff (including promoters and management team)




New products/services introduced




Percentage of total sales accounted for by new products in first year




New customers won




Percentage of total sales accounted for by new customers in first year
















What new customer types can you reach:

> With your existing products/services?

> With new products/services?

What new products/services will you introduce?

When?

What stage are they at now?

What market demand do you expect for each?

What competitive reaction to do expect for each?

Which of the following factors are important to the market? For each factor that is important to the market, what targets will you set for improvement and how will you reach them?


Importance to market

Target for improvement

Method of improvement

Product features

(specify what these are)




Quality of products




Range of products




Customer service




Marketing




Price




Location




Delivery




Image




Other

(specify what these are)




Do you expect important changes in these factors? If "Yes", what are these changes? How can you capitalise on them?

How will you measure the success of your business in the future?

Every year, you should set yourself targets for the next year, keeping in mind your 10-year plan, which sets out the direction of your business.

Using a road map analogy, the 10-year plan is your destination; the one-year plans are the turns (right, left, straight, short cut, scenic route, stop-over, break for coffee, etc.) that you take on the way. And, just as on a journey by road, you need to check your direction on a regular basis to see whether your plans need adjustment.

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Friday, 20 October 2017
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