Being an entrepreneur has no shortage of challenges. Whether you’re running a single business or juggling multiple ventures, the task of operating businesses brings a lot to manage.
With this ultimate responsibility of task management it’s very easy to neglect things. You have to prioritize things and focus on what’s essential. Everything else, by nature, becomes neglected.
In my decade as an entrepreneur and my observations of other entrepreneurs, I’ve found that there’s one thing most of us neglect. That thing is Setting Goals.
Yep, no crazy hack or secret sauce. The one thing most entrepreneurs neglect is setting goals. We get so caught up in daily tasks and interactions that we forget to look forward and create a vision for where we want to be.
Why Setting Goals Are Essential
I used to think setting goals was for CEOs of huge companies who sat around at board meetings and talked about their yachts. Boy was I wrong.
Setting goals is essential for any size business, from solo acts to Fortune 500’s. It’s how we strive for progression and measure results. By setting a goal you’re establishing where you want to be at a future point in time. This is usually a state of growth that’s different than now – i.e. more revenue, more customers, more momentum, etc.
A goal gives you a target to shoot for. When you have something to shoot for you can plan and strategize to hit that target. It’s that simple.
The Consequence of Not Setting Goals
On the contrary, if you don’t set goals you will always be aiming at a moving target. Or even worse, you won’t be aiming at anything. It’s so easy to just stay the path and continue with no specific goal in sight, especially if the path is yielding growth. However, at some point that growth curve will likely flatten out and/or digress.
More importantly, without goals you won’t have any way to measure if you’re efforts are working. You won’t have an idea of where to focus and optimize.
Great, so how do you set goals?
Interestingly enough, this is where many people struggle. They have no sense of how to set and track goals. Well the good news is that setting goals is easy! In fact, I’m going to give you a simple and effective way to create some goals right now.
We’ll use a web design business as the example business.
Example Goal = 250k ARR (Annual Revenue)
How to get there:
1) Break down how much monthly revenue you need to sell in order to meet the annual revenue goal.
$250,000 / 12 = $20,833
Great. Now we know we need to sell just over $20k/month to hit our goal.
2) Figure out how many projects you need to close. Let’s say your average project is $5k.
$20k / $5k = 4
Now we know we need to sell 4 projects per month. Almost done!
3) Finally, figure out how many leads you need to close 4 projects. Let’s say you close 10% of leads.
4 (projects) x .10 (close rate) = 40 leads
And now we know you need to generate 40 leads per month.
So in summary, this is your formula to reach your goal. Use something like this for your business with the right numbers/targets.
How to track the goal
The last and final piece is how to track your goals. There are tons of options for goal tracking, including SAAS products and software, but I suggest you start simple. Here’s my suggestion for how you track goals:
- Create a spreadsheet with columns for each month of the year.
- Create rows in the spreadsheet for Leads, Projects, and Revenue. Over time you will want to add more metrics, but start with these.
- At the end of each month, put 30 minutes aside to fill in the spreadsheet with your numbers. Add a calendar reminder to make sure you don’t forget!
And that’s all there is too it. Now you have a simple “business dashboard” to track your goals.
So start setting goals and tracking against them today!
Ali is a father, husband and serial entrepreneur with a deep drive to create. He writes, records, codes and builds things to inspire the artist in all of us.