‘A business is like an automobile: It has to be driven in order to get results.’ – B C Forbes
Taking this even further, in order for the automobile to be driven for performance you also need to know what gear shifts to make and when.
For me, Forbes’ analogy means that to drive a business to get results, we need to break down the goals into relevant, measurable and clear milestones – the what, the when, the how much and the why.
So what does this look like? It will come down to the type of business you’re running. For example, for a professional services business with a goal/target of making $90,000 revenue per month, this could be broken down to look like this:
- Previous reporting has shown that the average project value is $13,500.
- To reach the target we would need to complete approximately 7 projects a month/2 per week. This information will help with the scheduling of new projects.
- Then work out the key milestones of project, and the resources required at each stage of the project. For example, if the project value is $13,500 and the average hourly charge out rate is $165 per hour, you’ll need approximately 80 hours of staff resources per project, and a total of 560 productive hours to complete all projects for the month.
If your full-time staff work approx. 152 hours a month with 80% or 120 productive hours, you’ll need 5 full-time staff to complete the projects.
The most important part of breaking down targets is understanding the drivers of your business. This way, you can apply consistent framework so that the milestones are clear and relevant to the team.
Another fundamental element of success, when growing a business using targets, is ensuring that you undertake regular tracking and measurement of key milestones. This provides visibility over the progress and can provide vital information about problems that arise, productivity, assessing results before the target is reached, whilst the milestones can still be controlled.