In Starting a Business, it is important to carefully evaluate your business objectives and strategy at an early stage. Using the Six Minute Strategist methodology, six factors have been identified to bring structure and clarity to this process.
Objectives
Strategic Planning is at the core of any successful venture. At the core of this is establishing the objectives for your business. These objectives may be financial but equally they may be subjective or aspirational.
Examples of Objectives include:
“To achieve turnover of £1m in the first year”
“To provide the best customer service”
“To become market leader in…”
Hierarchy
In order set out the Goals of the business, consider the following hierarchy in turn:
What is the Mission of the business? What is its overall purpose, what are you trying to achieve? You should try to distill this down to a mission statement which is clear and concise.
What is your Vision for the business? Steve Jobs had a clear vision for Apple – “Simplicity is the ultimate sophistication.” In setting out a Vision, the founder of the company needs to communicate his passion and drive to make the business successful to customers and employees alike.
General Aims or Goals: These are more a more granular checklist of what the business aims to achieve. They should cover all areas of the business and range over period of time, several years ideally.
Objectives: Once you have thought through the points above, it is possible to focus on some measurable and achievable specific objectives. These should as far as possible be used as milestones to judge the progress that the business is making as it develops and grows.
MBO – Management by Objectives
In his 1954 book, the Practice of Management, Peter Drucker set out a process called Management by Objectives in which he set out how to define objectives within an organisation so that management and employees clearly understood their roles within a business.
He believed that these should cover all areas of the business:
- production
- sales
- marketing services
- HR
- finance
- information systems, and
- research and development.
He argued that there are eight key areas to be addressed
- productivity
- innovation
- market standing
- physical and financial resources
- profitability
- management
- employees, and
- public responsibility.
SMART – ER
Another methodology for developing objectives is commonly referred to using the acronym – SMART
Specific – clear and unambiguous: what, why, who, where and which? Significant, Stretching, Simple
Measurable – objectives should be capable of measurement – how much? how many? Meaningful, Measurable, Manageable
Attainable – must be realistic – How can the goal be accomplished? Appropriate, Agreed, Assignable, Actionable, Aligned
Relevant – the objective should be one that the goal setter must be willing to work towards and believe that it is worthwhile. Realistic, Resourced
Time Bound – setting target dates are crucial. When? 6 months? 6 weeks? 6 days? What can I do today? Trackable, Time oriented, Timed
You can also add – ER
Evaluate – the objectives should be holistically evaluated in the context of the whole business. Ethical? Enjoyable? Engaging?
Reevaluate – periodically, the whole process should be reviewed for progress and the objectives rebalanced and reassessed to ensure they continue to meet the requirements of the business. Rewarded, Reassess, Recordable,
Six Minute Strategist Start Up Course – Is this for you?
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Do you need to learn more about Business and Financial Plans
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Take a look at my brief Video…
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