The Power of Setting Goals

If you started 2024 with New Year Resolutions but have struggled to stick with them, there may be good reasons. Some of the reasons people fail at NYRs may also be why business owners might fall short of their goals. These include things like:

• Too little commitment, not a priority.
• Not enough time or it is the wrong timing for this goal.
• Goal is not clearly defined.
• Experiencing a setback.
• Slower progress than expected.
• Not enough support.?

Defining your business goals, including your objectives around exiting your business, is a first step towards achieving them. But it may not be enough to just define those objectives. The Business Enterprise Institute recommends that goals be SMART, that is, Specific, Measurable, Attainable, Relevant, and Time-limited.

The benefits of goal setting are far-reaching, not only for maximizing the success of your business in the “now” but preparing for your eventual exit in the future. Business owners value goal setting because it provides:

• Clarity and Focus: Goal setting provides a clear direction and focus, helping individuals and organizations align their efforts toward specific objectives.
• Motivation: Setting goals can be a powerful motivator. Defined objectives give people a sense of purpose, driving them to work harder and persevere through challenges.
• Measurable Progress: Goals are often quantifiable, allowing for measurable progress tracking. This helps in assessing achievements and adjusting strategies accordingly.
• Enhanced Productivity: Having well-defined goals promotes productivity by creating a roadmap for tasks. It minimizes procrastination and encourages efficient time management.
• Guidance in Decision-Making: Goals serve as criteria for decision-making. When faced with choices, individuals and teams can assess options based on whether they align with their established objectives.
• Personal and Professional Development: Goal setting fosters continuous improvement. It encourages individuals to acquire new skills, overcome weaknesses, and strive for self-development.
• Increased Accountability: Goals create a sense of accountability. Individuals and teams are more likely to take responsibility for their actions and outcomes when they have set objectives.

Goals and Exit Planning

The Business Enterprise Institute defines three types of goals, including Foundational, Universal, and Value-based. Let’s look at each one a little more closely.

Foundational Goals

Financial security is a?foundational?condition of a successful exit. Your exit strategy is successful only if it achieves your financial goals. You’ll need to define, with precision, the pre-tax, annual income – adjusted for inflation – and you’ll need to be financially independent of your company. For this critical financial analysis, you’ll need the assistance of an experienced financial planner who can help you map out a long-term strategy for maintaining the income stream you need once you no longer own the company.

Universal Goals

Business owners leave their companies under many different circumstances and each owner’s vision of the next chapter of their life is unique. But all have some common objectives when eventually exiting their business. You want to enjoy a certain level of post-exit income, depart when you choose, and transfer the business to the successor of your choice – three goals that are?universal?because almost all business owners seek to achieve them. These goals are not actual needs in terms of your financial survival and therefore give you some flexibility. They are often more than wants, however, and some owners will postpone their retirement or exit to meet them. Base your decisions regarding these universal goals on facts rather than assumptions.

Value-Based Goals

Goals such as creating a legacy, acknowledging employees, charitable giving, assuring family harmony, or considering how your exit may affect others and/or your community may not be on your mind initially. But you may find as you move through the process that there are specific objectives you want to accomplish based on your individual?values?– what’s important to you personally and what your heart leads you to do. That doesn’t mean these goals are any less important than others – they are important to YOU in that they define how you walk away from your company, and that’s what matters. It is suggested that you examine your vision for the company without you and your vision for yourself without the company when considering your value-based goals.

Setting the right goals in the right way is the most important action you can take towards exit planning – and as a business owner in general. Once you go through the initial process you’ll know where you are, where you want to be, and the steps you need to take to get there. A bonus – you’ll have the confidence and motivation that goes along with that invaluable knowledge and having a plan.

Along with your well-defined goals, participation in our Exit Planning Peer Advisory Board (PAB) is a great way to grow your business and work towards the future you envision, while helping business owners stick to their goals, stay accountable, and maintain progress. Contact me for a complimentary consultation regarding your business and exit goals or if you’d like to attend our PAB as a guest.