Setting Business Financial Goals to Meet Growth Needs

Come with me on a journey for just one second. Imagine you were in a community where there was no grocery store. Every time somebody wanted to buy something, they had to travel 35 miles to the nearest grocery store, and this problem had just become so annoying to you, that you said, “You know what? I am going to start my own grocery store.” So, you saw a problem and you figured you’re the solution to that problem, because this is what your community needs. Now, this does not always have to be a local problem, it might be a need you see online, a need you see in a group, wherever you see that need, you see the need and you decide you are going to provide that solution, so your goal becomes, provide that solution to as many people as possible.

Now, if that describes you, you will need the Excel template at the end of this video. I want you to follow along with me by downloading the Excel template, and once you do, open the template and at the very bottom, go to the Market Me tab. So, once you download this workbook and open to the Market Me tab, I want you to start by thinking about the problem you’re trying to solve. The program does not use this information for anything specific, but this is for you to think through the problem, so you’re very clear about it as you worked through the rest of the numbers. Then the next you need to think about is your total market size. So, if you could reach every single person in this world with the solution to your problem, how many people do you think will be interested? How many people have this problem and are looking for your solution? So, put that number in there. So, if you think your market has 100,000 people, 10,000 people, just put that in there.

So, of the 100,000, in the next line, how many of them are you currently serving? And then next, I want you to guesstimate how much of your total market you think you’re going to reach during the time you intend to run this business. So, if you think you’re going to get 10% of the market, put that in there. Do not put 100%, because if you have a 100% market share, it means you have a bad market, because in any good market, you’ll have some competition, and if there’s no competition, either because you’re really early in the game, which means competition would come later, once they see how profitable you are, or it just means you just have a market that has… The profits are not good enough to really attract competition. So, competition is actually a good sign that you are in a good market.

So, because of competition and because of other factors, you’re probably not going to get 100% of the market, you probably will get a fraction of it. So just guesstimate, be very reasonable what you think you can reach out to. This is not an exact science, that’s why it’s a guesstimation, so put that in there. And then, the average sales price of your product or service per year, so just put the average sales price per customer per year, and then, the number of years you want to be engaged in this business. So, if you want to be engaged maybe for 5, 10, 15, 20, 25, put whatever that number is in there. Then, once you put that information in the program, we compute what your goal should be in 2019.

So now, let’s scroll down to see what your goal should be. Based on what you answer, your estimated current revenue is $25 million, which is the 5000 number of customers you currently serve, times $5000 per customer. And then your estimated market potential, like you said, is 10,000 people. You put that in, that’s what you enter. Well, we enter. Potential market share is 10%, so our market is only going to grow twice the amount, so it’s going to grow to 10,000. Potential, which… Twice the amount we have now, and then the potential market share in dollars is 50 million, so that means we’re about half of where we need to be. So, to… In five years, to get there in five years, all we really need is a 15% growth rate per year to get to where we want to get to in five years before we intend to leave the business. So, this is going to be our goal for 2019.

So, let’s say we wanted to get that in one year. We’ll need 100% growth rate, which would be our rate. If we had 20 years, we’ll need just a 4% growth rate. So, we can see the further our goal is, the more time we have, the slower we have to grow each year. I know it’s very easy to think that faster is always better, just go fast, fast, fast, fast, fast, but where are you going to? Where are we rushing to? If there’s no system to the madness, then what’s the point? If there’s no goal on the end, if there’s no foresight, when you get there, you find yourself always wanting more. You always say, “Okay, why did I do all of this? What’s the point of all of this?”

So, you really need to know why you’re doing what you’re doing because it gives you a purpose, and it gives you the strength and inspiration to carry on each day, knowing that there is a big payoff coming someday. But let’s say you only needed a 4% growth, but because everybody else around you is growing 100%, you feel like you have to do the same 100%. Well, you get that goal, but it’s not going to be as satisfying to you because it wasn’t your goal, it was something you adopted from somebody else, because they told you that’s what you need to have, because that’s what is good. But who’s to tell you what is good for you? Who’s to tell you 4% is not good enough, if that’s what you need to meet your long-term goal of eventually having the financial independence you need? Who’s to tell you differently? What you need is what you need, regardless of what anybody else has to tell you, what anybody else has to say.

This is the last in a series of setting goals. At the end of these videos, so the four videos I have created, you should know where you want to go. Now, that’s up to you to decide to where you want to go. I have given you possibilities, but you have to decide for yourself where you want to go. In the four videos, I have shown you what is required to get there. By giving you a growth rate to target, to focus on, it’s up to you to build the marketing plan around that growth rate to make sure you achieve it in 2019. You need to sit down and decide what you’re willing to do, what you have right now that would help you get there, and what else you need to get there. It is up to you to make it happen. Now go ahead, let’s make 2019 the best year yet. Like what you see? Go ahead and click the subscribe button on the very bottom of this video. I look forward to seeing you in future videos!

By |2019-01-08T00:34:14+00:00January 28th, 2019|2019 Financial Goals|Comments Off on Setting Business Financial Goals to Meet Growth Needs

About the Author:

With over 16 years of accounting and finance experience, I know what it takes to make your business profitable. However, in my opinion of what really makes me qualified to work with you is my love for using my God-given gift to help people with numbers. I love difficult problems and my business is to be in the business of helping other people achieve their dream/vision/ goal in the most cost effective and productive way. I am very passionate about my clients and take their problems very personally.