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Where Do You Want To Be?

You need to define where you want to be, preferably in the form of targets and milestones- your future “destination”. Try this exercise. Don’t be concerned if you cannot complete the exercise in the level of detail suggested. The purpose is to give you a sense of direction – you can fill in the gaps in late.


Defining Targets

What large ambitions – “Big, hairy, audacious goals” in management-speak – do you have for your business?

What are your overall targets:

  • > For year 1?
  • > For year 5?
  • > For year 10?

Can you set more detailed targets for your business’ performance?

Financial

Next year

Next year + 1

Next year + 2

Sales

Gross profit

Net profit

Your own salary

Total promoters/management team remuneration

Customers

Next year

Next year + 1

Next year + 2

Number of customers

Average purchase per customer

Average purchase per customer – units of product/service

Products/services

Next year

Next year + 1

Next year + 2

Percentage of total sales accounted for by each of the business’ top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3

Number of products made/hours of services supplied for each of the business’ top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3

Average cost of each unit of product made/cost of service provided per hour

for each of the business’ top three products/services:

> Product/service 1

> Product/service 2

> Product/service 3

Assets and liabilities

Next year

Next year + 1

Next year + 2

Fixed assets

Cash

Stock on hand

Money due by customers

Money due to suppliers

Total Working Capital

Less Borrowings

Total Net Worth of Business

Equity contributed by promoters and management team

External equity

(External equity as a % of total equity)

Profits retained

Total Shareholders’ Funds

Other measures

Next year

Next year + 1

Next year + 2

Number of staff (including promoters and management team)

New products/services introduced

Percentage of total sales accounted for by new products in first year

New customers won

Percentage of total sales accounted for by new customers in first year

What new customer types can you reach:

> With your existing products/services?

> With new products/services?

What new products/services will you introduce?

When?

What stage are they at now?

What market demand do you expect for each?

What competitive reaction to do expect for each?

Which of the following factors are important to the market? For each factor that is important to the market, what targets will you set for improvement and how will you reach them?

Importance to market

Target for improvement

Method of improvement

Product features

(specify what these are)

Quality of products

Range of products

Customer service

Marketing

Price

Location

Delivery

Image

Other

(specify what these are)

Do you expect important changes in these factors? If “Yes”, what are these changes? How can you capitalise on them?

How will you measure the success of your business in the future?

Every year, you should set yourself targets for the next year, keeping in mind your 10-year plan, which sets out the direction of your business.

Using a road map analogy, the 10-year plan is your destination; the one-year plans are the turns (right, left, straight, short cut, scenic route, stop-over, break for coffee, etc.) that you take on the way. And, just as on a journey by road, you need to check your direction on a regular basis to see whether your plans need adjustment.

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