Here’s what we’ll cover
Is your business driving you or are you driving your business? To be sure that you are in that drivers seat the number one place to start is with goal setting. If you haven’t set goals you don’t really know which direction you’re driving, right? I’ll show you how to make goal setting purposeful, intentional and even interesting. Goal setting done my way will give you the overarching framework you’ll use to drive every other decision in your business and will give you a chance to take control of your business.
The 3 step process for goal setting that I use is different. It’s almost the reverse of what everyone else seems to want you to do. My unique approach to goal setting is designed to set you on the path to building the most elegant version of your business. The most elegant version of your business is lifestyle friendly and profitable. If you want a profitable but lifestyle friendly business then the most obvious place to start is by setting lifestyle goals. I’ll go into detail on how you can do this and give you some step by steps you can do today.
Your lifestyle goals need to be supported by the profit you make in your business. The profit you make is in part driven by the revenue you take. You’ll set lifestyle, then profit followed by revenue goals. The key is to then review them in their entirety to be sure that you’re not sacrificing any of your lifestyle for the sake of profit.
Here’s the shownotes
If you listen to much of what I speak about you’ll know that I often talk about building an ‘elegant business’. Your ‘elegant business’ is lifestyle friendly. It gives you the chance to make the money you want and give you the time you want to do the things you love, without running yourself ragged.
To build the most elegant version of your business, you need to start somewhere and you start by setting goals. So when I talk about setting goals, I’m talking about setting goals with the distinct purpose of building the most elegant version of your business.
Some people love goal setting, some despise it, some are overwhelmed by it. I’m going to give you a different approach to your goal setting. We’re going to kind of reverse engineer your goal setting.
But before we get into this different approach, let’s briefly look at what usually happens when it comes to goal setting.
January rolls around and we set a revenue goal.
That revenue goal might be based on last years achievements plus 10%, 20%.
Or we pick a number, almost out of the air. $675k because it feels right.
Or we choose a milestone goal. We got to $800k last year, I want to break $1m this year. Or $1.3m last year lets break $1.5m this year.
While revenue goals have a place, they shouldn’t be the first place we go to. Revenue goals are top line sales goals. Top line sales are not a sign of how wealthy you’ll be. They are not a sign of how good a business operator you are. They are not a sign of how wonderfully fulfilling your lifestyle will be once you reach these goals. Revenue is how much stuff you sold. Fullstop.
I’ve spent 20 years working with countless business owners, dissected hundreds of financial statements, diagnosed areas that sadly drain a businesses profitability and helping identify missed doors of opportunity. So I speak from experience when I say, You can make a million dollars and take $50k for all of your hard work. You can make a million dollars and take $500k for yourself. You can make a million dollars but have to work 70 hours a week to get it. The top line, the revenue line doesn’t guarantee more money for you and it doesn’t guarantee you a better, more elegant lifestyle.
So when I talk goal setting I’m focused on something different. I’m focussed on building the most elegant version of your business and the lifestyle and financial freedom that goes hand in hand with your elegant business. It’s about what your goals will do for you when you achieve them. Not what they’ll look like on paper when you achieve them.
If your overarching goal is to build a business to give you a better lifestyle – whatever that lifestyle may look like for you – then it makes perfect sense to start with the end in mind.
The 3 step goal setting process i want to walk you through today looks like this;
We start with Lifestyle Goals.
Then we set Profit Goals.
Finally we set Revenue Goals.
Why do we do it this way? Well, broadly, your revenue drives profit. The amount of profit you make dictates your lifestyle. So, you don’t know what your Revenue Goals should be until you know what your Profit Goals should be and you don’t know what your profit goals should be unless you know what your Lifestyle Goals are.
Step one is setting some Lifestyle Goals.
It’s best to break your Lifestyle Goals into 2 areas. The first is Lifestyle Financial Goals and the second is Lifestyle Freedom Goals. You want money and you want freedom.
Here’s what I want you to do. Take 2 pages of your journal or notepad. Head one page up with the title Lifestyle Financial Goals. Head the other page up with Lifestyle Freedom Goals. Then braindump your goals.
A few questions to ask yourself about your Lifestyle Financial Goals;
What do your ideal family holidays look like? Are they 5 Star or do you want to buy a caravan and travel your way?
Do you want to upgrade the family home in the future?
What schools do you want to send your kids too?
Do you want to donate more to special charities?
Do you want to relocate your home office to a trendy office in town?
A few questions to ask yourself about your Lifestyle Freedom Goals;
How many hours a week do you want to work?
How many weeks do you want to spend on holiday?
Want to have enough time to work on your passion project or donate your time to charity?
Want to attend your kids school assembly every Friday afternoon?
One of the first questions I ask all of my clients is how many hours a week do you ideally want to work. Some are happy with their current hours but want to make more money during those hours. Some are making plenty of money but their hours are out of control.
Your first job is to think about what your Lifestyle Goals look like. Once you’ve noted them all down you can add a rough dollar figure next to those under the financial goals and add a timeline as well.
Step Two is setting Profit Goals.
With some clarity around what you want to do with your life you can start setting some profit goals. How much profit do you need to take from your business to achieve your lifestyle goals? Setting profit goals are a little tougher which is probably why a lot of people don’t do them.
Will a $200k profit allow you to reach your lifestyle goals? Or do you need more? Or less?
Everyone has different personal situations. But the size of your profit goes a long way to you reaching your lifestyle goals. Some of you will have an idea of what profit you want to make but for those of you that don’t quite know where to start.
Start with your ideal living requirements – so, if you think you need $200k a year to achieve your lifestyle goals you’ll start with that number. Then there are some factors that come into play such as other household income, tax, business debt etc so when you get serious about setting your profit goals it is really worth getting some expert help.
Step Three is setting Revenue Goals.
Once you have your profit goals you’re in the perfect position to set some relevant (not rubbery) revenue goals.
You’ll use your profit goal to guide your revenue goal. If you have a profit goal of $200k, how much ‘stuff’ do you need to sell to reach that profit goal? Is it $500k, $800k, $1m?
Once you’ve done these three steps you’re in a much better position to start working on the ‘how’. Remember that I said the Lifestyle Goals are broken down into 2 categories? One is financial goals and the other is freedom goals. You’re now ready to ask yourself, how can I reach my financial goals without compromising my freedom goals. When we can work that out we are so close to finding the most elegant version of your business.
When you finish listening to this podcast, I want you to put aside a little time and think about those lifestyle goals. That’s the only place to start. Start with the end in mind.
You may need some help with the profit and revenue goals, but whether you do or not, the only place to start is with your lifestyle goals. You’re then in the perfect position to start building the most elegant version of your business.
And one last tip. Start today. Don’t wait until January. Just because the world loves to revolve around calendar years or financial years doesn’t mean you and your business have to. You can lose a lot of precious, elegant business building time by waiting until everyone else does their goal setting.