Setting goals is an essential part of running a successful business because if you don’t aspire to anything then you’ll never grow. So let’s talk about how to set good goals.
I’ll start with a couple of bad goals: I’d like to make all of my customers happy and make my business more profitable. The things the goals are aiming for are good, but the way they’re worded is terrible. The problem is they’re too general and difficult to measure. Sure, you can measure profitability, but this particular goal doesn’t say anything about how to achieve it. It sounds more like a wish.
Measure Your Progress
The first thing you have to do is add a way to measure your success or failure. What do we mean by “making customers happy” or “be more profitable”? What are some things that are keeping us from accomplishing these goals? We need to identify those trouble spots and then come up with a plan to fix them.
With this in mind, let’s improve our goals: I’d like to reduce late shipments by 50 percent and reduce wait times for customers who call in to under a minute. This will improve my customer service and make customers happier. I’d also like to cut my inventory costs by 30 percent, double my inventory turnovers, and speed up my manufacturing processes by 10 percent. This will help my company be more profitable.
These are better, but they’re still not perfect. They need something else.
Set a Time Limit
These goals are missing a time element. You can make a lofty goal like “I want to lose 10 pounds,” but if it doesn’t have a time limit, you can just keep putting it off indefinitely. Time limits give a sense of urgency to goals and they also make it easier to tell whether or not you’ve achieved your goals. If a goal is taking longer to reach than you planned, maybe your strategy needs to be revised to reach it faster, or maybe the goal was unrealistic to begin with.
So if we add a time limit, the goals would now be: I’d like to reduce late shipments in the next week by 50 percent from the previous week and reduce wait times for customers who call in to under a minute within three months. I’d also like to cut my inventory costs by 30 percent within four months, double the number of inventory turnovers I have in a year, and speed up my manufacturing processes by 10 percent within two months.
Now all the pieces are in place. All you need now is a plan to make these goals happen.
Make It Happen
To make these goals happen, you need to use tools that help you measure your performance and produce results fast. It’s a good idea to use Fishbowl’s inventory tracking software to help you track orders and shipments to make sure they get to their destination. It can even indirectly reduce the number of customers who call in wondering when their packages will arrive. This will reduce the wait times for the ones who do call.
Fishbowl Inventory also helps you figure out the optimum inventory level so you can dramatically reduce your storage costs and the amount of money you have tied up in inventory. This can also lead to more annual inventory turnovers. Plus, Fishbowl’s multilevel bills of materials, work orders and other manufacturing tools help you speed up the manufacturing process and get products out the door faster.
The next time you’re thinking about what goals to set, make sure they’re measurable and tied to a specific timeframe. And get the right tools to make them happen. If you’re a small or midsize business, you’ll find many of those tools in Fishbowl Inventory. Sign up for a free inventory software demo to learn more.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.