Your Prime Business Goal

I address thousands of business owners each year. They own businesses in the United States, Brazil, Peru, Africa, and other nations. They may gather in Chambers of Commerce, business associations, international conventions, and other groups. I ask each group the same question "What is the number one goal you have set for your business?"

Sadly, too many small-business owners respond that they have not set a goal. The chaos of running the business, the extinguishing of business brush fires, prevent them from analyzing their business, setting an annual goal, or implementing a plan to achieve the goal. Their plight resonates with many of us, doesn't it? As a result, too many of us frantically rush wherever that day's crisis drives us. We respond to our business storms like a ship without a rudder, then wonder how we arrived at unplanned destination.

Other business owners respond "introduce a new product", "refine our service", "increase traffic to our shop (or site)", "lower overhead"and "stay in business". While I commend those who took the time to plan a goal, I grieve that they missed the prime goal. The goals they set represent means to an end. They cannot survive if they consider these the prime goals of their business.

Let me share the story of Annette who ran a home-based craft business. She set her goal to "triple my sales", a worthy goal. Plus, she accomplished her goal and tripled sales in one year. Unfortunately, Annette failed to do an effective cost analysis of her product. Unknown to her, she lost $1.45 on every $5.00 she sold. So, tripling her sales also tripled her losses and ran her business into $78,000 debt in one year. She not only lost her business. She lost the home that they had mortgaged to finance the business.

The prime goal of any business is to make $XX profit.

Business owners must focus on that prime goal, or lose their business. All other goals or objectives (subsets or small goals that lead to the prime goal) remain subservient to the prime goal "make money". "Making money", however, cannot remain unqualified. You will notice that I qualified my statement with "$XX". Successful business owners not only focus on "making money". They set a goal of how much profit they will earn.

Large businesses calls this weekly, monthly, or quarterly earnings projections. Sam Walton created a worldwide brand by establishing and evaluating daily earning projections. He built systems that gave him the information he wanted every evening. He established 10 rules for business and shared them with every person in the company. Stephen Covey calls this habit of effective leaders "Beginning with the End in Mind".

So, ask yourself "How much profit do I want (plan, need, or desire) to make this year?". If the answer eludes you for even four seconds, to set an amount. Then, post it on your bathroom mirror, tape it to your desk, make it your screen saver, and ensure that you and everyone in your business see it constantly.

After all, that is the prime goal of your business.

Technician, Manager, or Entrepreneur?

Michael Gerber stated in The E-Myth Revisited that most entrepreneurs are technicians having a spasm of entrepreneurship.

Perhaps I can illustrate his meaning. Kay, an award-winning graphic designer, decided to open his own business. As a graphic designer, he decided that he was not making any money unless he was drawing or designing. That goal belongs to a "graphic design technician". Unfortunately, Kay did not see the "accounting manager" role of sending bills and ensuring they were paid. As a result, Kay would not receive money for many of his projects because he either did not send all the invoices or collect on accounts receivable. Why? Because he followed the technician role and not the management role.

SUCCESSFUL BUSINESSES REQUIRE 3 SIGNIFICANT ROLES:
The technician creates the product or service. They are the producers. Without a technician, clients do not receive products or services. They view distractions, like billing or planning, counter to productivity. Technicians live in the "now".

The manager monitors what the business already provided. They are the organizers. Managers create reports to evaluate how much product or service the business provided. They ensure that the business processes accounts payable and receivable. They order supplies to ensure that the business creates enough product or service. Managers live in the "the past".

The entrepreneur envisions the next big improvement. They are the dreamers. Status quo never satisfies the entrepreneur. They see modifications, improvements, and new horizons essential for survival. The past and present bore the entrepreneur. The entrepreneur lives in the "the future".

The three roles tend to irritate each other. Technicians view the manager's reports as non-productive busy-work. Managers view the technicians failure to appreciate the need for organization and reporting as unprofessional. The entrepreneur irritates both of them with their constant changes and pie-in-the-sky dreams.

The challenge for one-person businesses occurs when all three roles must dwell in just one person. One person must live in "the now", "the past", and "the future". That one person irritates themselves with distracting reports, constant constant changes, and inadequate delivery.

Successful business owners either

• Reconcile all three roles, balancing them adequately to keep the company going.
  
• Find someone else to fulfill the roles that do not excite them (possibly hiring, outsourcing, or partnering)
  
• Let the business suffer or fail due to lack of effort in one or two roles

You can learn more about this in the E-Myth, Consulting News, Sources of Light, and other sources.