An excerpt from AP March 2020 Print Leaders Forum – by David Fellman & Associates president Dave Fellman
As I write this, I am about 80 per cent of the way through my annual process of goalsetting and planning.
All that is left is to plug in my final figures for 2019, and then put the finishing touches on my goals and plans. As you read this, I hope you will also have completed your process. If not, it is not too late.
Beyond that, it is not as difficult as many believe it to be. For me, it involves just a few questions. Here they are:
- How much money did I make last year? I am not ashamed to say that I am in it for the money. The work I do feeds, clothes and shelters my family and provides for the “extras” as well. Question 1A follows: What do I want in our lives this year that we did not have last year?
- How much do I want to make this year? This is simple arithmetic. My earnings goal is the sum of what I earned last year plus the anticipated cost of what I want to have in our lives this year.
- What was my sales volume last year? This figure establishes a baseline for setting a sales volume goal for 2020. More to follow, but first…
- Where can I cut costs and/or find other profit improvement based on last year’s sales volume? Did I waste any money last year, or leak profit in any other way?
- How do I solve these problems, and how much of my 2020 earnings goal can be realised by improving the profitability of my existing sales volume? Remember, every dollar “saved” is one less dollar that has to be realised by sales growth.
- How much additional sales volume will I need to reach my earnings goal? This figure added to last year’s sales volume becomes my 2020 sales volume objective. I hope you will see the wisdom behind this approach to goalsetting. It is not a “crystal ball” exercise in guessing at what my sales volume might be. Instead, it is a calculation of what it needs to be in order to reach my earnings goal.
- What will it take to generate all that sales volume? Now we come to the specifics of a plan, and this part of the process brings up another batch of questions.
Which of my current customers are likely to generate more business next year? How much new volume might that represent? Which of my current customers are likely to generate less business next year? How much lost volume might that represent? What should I do to maximise sales gain and minimise sales loss with current customers?
How many new customers will it take to generate the volume I need? How will I capture those customers? Who will do the prospecting and the follow-up and the convincing? Does anybody need training or better management in order to make it all happen? How much will all of this cost? How will that effect the profitability assumptions I have made so far? Will it take more new sales volume than I originally thought to reach my earnings goal?
Obviously, this is the heart of the planning process. The next step is a reality check:
- Am I setting reasonable and attainable goals? Up to this point, I have only considered how much I want to Now I have to decide whether it is reasonable to expect it to happen. If not, I will revise my goals downward. We may not be able to have everything I want in our lives this year. But once I have goals I feel are reasonable, and a plan, I will get to work to make it all happen.
Now comes the most important part of today’s message. If you have not yet set your goals and established your plan, start now!
And if you have completed the goals-and-planning process, do not delay the implementation. You have less than a full year at this point to achieve your goals, and sales growth tends to be a compounding process.
A new customer you gain in March can provide you with 10 months of orders. A new customer you gain in December, only one. The harder you work at sales growth early in the year, the more likely it is that you will be happy with your results at the end.
This article was written prior to the impact of COVID-19. The digital version of AP March 2020 is available here.
And as part of AP’s 70 anniversary, we’re pulling together a list of 70 local industry pioneers – you can make your nominations here.
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