“Goals help you overcome short-term problems.” Hannah Moore Perhaps you had a great year, maybe it was the pits, or it is was just a hum drum- made a little money- nothing exciting kind of year. But that was the past. And the past can control us, it can make us unhappy, proud, a reason to gloat or feel ashamed. But that was the past. As we enter 2004 this is the time to put the past on the shelf and chart a new course. It is the time to use what is called in MBA parlance “Management by Objective” or setting goals or targets. It is focusing on something we wish to happen and marshalling our efforts to grab the brass ring. It is important that goals or targets meet two conditions if you are to achieve success. The goal must be realistic. I know some entrepreneurs who are delusional and to feel good for the moment they decide to mount some major goal announcing to the world of their presumed claim for hero status. As an example, hyping yourself to announce a goal such as doubling your sales this year when your business has been flat for years is a dream! And it will be impossible to achieve. The other condition is having a reasonable plan to getting to your goal. It is one thing to say you are going to get rich and famous but without a means of doing so, your claim is only a piece of puffery. An unreal goal without a plan is like my concocting a goal in 2004 to become a tango dance instructor at a nursing home. Beyond the usual goal of increasing your sales – there are many other targets that are reasonable and can fatten your bottom line. If you increase your inventory by one turn- say from four times a year to five you will have freed up 20% of the dollars you have tied up in your inventory investment. Or, if you reduce by 25% the average days your money is tied up in your accounts receivable- a fourth of your dollars setting on books will be in your checking account. If you can reduce the price you pay for inventory or supplies by 5% that savings heads right to your net profit. If you think through how you manage your employees and strive to eliminate unproductive time wasting tasks, you will discover a “RIF” or reduction in force is savings on big time for a small firm. Another goal that pays handsome returns is scrutinizing every expense from coffee to cars aiming at lopping off a dime on a dollar. Again, the impact is a blessing to your bottom line. I know of a computer related company located on the tech belt around Boston that does well, spins off a healthy profit, and grows at a nice clip--but is vulnerable because its customer base is small. A realistic and valuable goal for this company is finding more customers. An increase in sales from the existing customers if fine--but as a goal it makes more sense to focus on finding new customers while keeping the current stable happy. It has always been my conviction that putting up a target to aim for is good common sense. I like what Oliver Wendell Holmes said, “The greatest thing in this world is not so much where we are, but in what direction we are going.” Makes sense to me. Any top marketing executive knows that a basic sales management tool is the use of quotas. And as you know, a quota is a management imposed goal. It is a work target, it is measurable goal, and its progress can be publicized. The same challenge and reward system that enjoys such widespread popularity can easily with a little planning become of your management style. Goal setting and goal assigning is a way of holding your staff accountable. It is a way of measuring their progress. Let me offer a hint if you want your employees to become excitable about goals, involve them in the planning process. If your accounts receivable person agrees that he or she can lop off a chunk of those over 90 day invoices, get an agreement, periodically review the progress, and reward success. Even if you have had a good year, sales increased, your profit margin expanded, you paid down some debt, and your 401k is smiling- with targets you could have had a better year. It is a fact of human psychology we do better when we muster our efforts to win the prize. Accomplishing goals feeds our self-worth and allows us to beat our chests with a war cry of victory. So take a look at this past year’s performance and create a set of reasonable and possible goals for 2004. And so you don’t lose your enthusiasm, keep track of your progress. Have a super year! Copyright 2003 Dr. Paul E Adams, Professor Emeritus Business Administration Ramapo College of New Jersey Author “ Fail Proof Your Business: Beat the Odds and be Successful.” Available Amazon.Com. If you have questions or comments- contact me: drfailproof@earthlink.net