Goal setting is critical to ensure your business is heading in the right direction; without goals, you have no destination to reach, so it is hard even to get started.
Think of goals as your compass; without them, you are just going blindly forward. You don’t go somewhere in your car without knowing where you are going, do you? No. However, it is not enough simply to have goals. You need to know how and when to action them and what they will look like in practice.
This is because there are many things you need to do to increase the probability of your business and steps you must take to actually reach the goal, like checkpoints. These can often be overwhelming if you haven’t anticipated them or planned how you would overcome them and accomplish them. You have to create a roadmap showing the journey of achieving your goals and the timeframes, not just writing down a list.
Create SMART Goals
The best way to begin your roadmap is first to create SMART goals. This stands for:
Your goals should meet each of these criteria to be achievable.
Let’s use an example: Lisa aims to pay off her credit card debt of $10,000 over the next 12 months. She is a single person living with flatmates making $100,000 per annum.
- Is it specific? Yes, $10,000 debt paid off in 12 months.
- Is it measurable? Yes, Lisa can measure how she is paying down that $10,000.
- Is it achievable? Yes, Lisa could find an interest-free balance transfer card and will only have to pay down the principal over the 12 months, rather than any interest. That is only $833.33 per month or $27 a day. It may mean she spends a bit less on beer and wine over the next 12 months, but it’s definitely achievable.
- Is it relevant? Yes, credit card debt is expensive, and one of the best things you can do is pay it off as quickly as possible to achieve financial freedom.
- Is it time-bound? Yes, Lisa has 12 months to achieve her goal.
Intangible goals can also be turned into SMART goals. Let’s say that Luke wants to be a better parent. Saying he wants to be a better parent is not a SMART goal. However, saying that he will be a better parent by spending at least one hour of quality time per week with each of his children by themselves is a SMART goal.
- Is it specific? Yes, one hour per week per child. He could even go one step further with older children and get them to rate him out of 10, and ask them what they would like to do with him for that one hour.
- Is it measurable? Yes, Luke can check if he spent one hour with each child.
- Is it achievable? Yes, Luke could plan to spend less time watching TV, allowing him more time for his children.
- Is it relevant? Yes. I think being a better parent should be on all parents’ lists of goals. That doesn’t mean we are all bad parents, just that we should all be striving to improve.
- Is it timely? Yes, Luke can start now and build it into a habit.
When you have a SMART goal, you can have a clear destination. Now it’s time to build your road map to achieving your goals.
At PCR, we generally find that the easiest way is to back into your goal. By that, we mean you work backwards to figure out what you need to do to achieve your goal. In the earlier example, Lisa said she needed to pay just over $27 per day to reach her goal. That is working backwards to the goal.
Set Mini Goals
But what about a more complex goal? Say, going into business yourself. The best thing to do is work out mini goals, which are things that need to be done before you start. For example, you might say that you need to have a company set up with a name and that you want six months’ cashflow saved up. Each of these things gives you a mini goal to work towards.
The map doesn’t need to be complex; often, the simpler it is, the better and the easier it is to understand. You can make it fun with coloured highlighters or stickers or make it super visible and straightforward by putting it up on a whiteboard.
The mini goals you create must be simple and easy to measure, especially for your financial goals.
Need help building your goal road map? Contact the team at PCR Accounting & Advisory today to set up a goal setting and game plan consultation so you can be on the path to financial freedom.
Owner of PCR Accounting & Advisory, Peter Marmara-Stewart is a top-tier accountant and financial advisor dedicated to helping clients reach their business goals and achieve financial freedom. Peter is highly regarded for his client-focused approach and entrepreneurial spirit, catering to a diverse range of professionals across a wide scope of industries all across the country. Peter’s expertise can help you plan effectively, set goals, maximise profits and protect your assets. Get in touch today on (03) 9847 7516.