What Key Performance Goals Should You Set?
Congratulations.
You’ve just started your company. You and your team are excited and ready to go.
You have a grand vision for disrupting your industry and becoming a big success. When you close your eyes, you can see your future company thriving.
There’s just one question on your mind: What do I do now?
It’s sometimes easy to see the successful company you want to be than the fledgling startup you are. And that’s okay because everyone has to start somewhere.
So, here’s the trick:
Keep that long term vision of the big company you want to build, and, at the same time, focus on the short term incremental goals you’re going to need to hit to build your big company.
But I still haven’t answered the question of where you start. You start where you always should start:
That’s right, you need a plan.
I can hear the pundits already. “Plans are useless in startups.”
Nevertheless, we’re going to start with a plan. So develop a revenue plan, by month, for your business.
So, let’s get started.
You’re going to need to gather up everything to do with your company. Let’s break this into two parts:
A. Revenue:
- Your revenue by month
- Your expected revenue by month
- Your current cost of goods (if you are selling a physical product)
- Your future cost of goods
B. Your Expenses:
- Your salaries for each employee, including yourself
- The expected salaries you’re going to pay future employees
- Your rentYour insuranceSubscriptions
- Office supplies
- Advertising expenses
- Travel expenses
- And anything where you are spending money to run your business
A word of warning.
Many people make the mistake of not truly accounting for all their expenses. I think they do it to give themselves the feeling that things are better then they really are.
You can’t make that mistake. You really need to know exactly where you stand. You do this not so you can punish yourself. You do this so you know how to responsibly plan going forward.
Completing this simple exercise puts you ahead of 80% (maybe 90%) of the businesses out there, so congratulations.
Now that you have a plan, you set some performance goals.
Probably one of the most powerful techniques I’ve learned in the past few years is Kaizen. Kaizen is the process of setting short term incremental goals.
Kaizen is so powerful because you and your team can see that it is possible to achieve your goals.
At the beginning your first short term goal might be getting 100 unique views of your website in one month. I know that sounds so low, but it’s where you start.
Then the next month, maybe the goal is 200. And the month after that it’s 400.
The long term goal may be 100,000 views in a month, but getting there step by step makes it doable. You and your team say to yourself, “We can do this.”
For example, I was working with someone whose long term goal was building a $100M/year business. That’s a great goal.
But we started by breaking the long term goal into short term, attainable goals. The first month’s sales goal was $1000. That’s all. But he exceeded the goal.
Then the second month’s sales goal was $3000. And he exceeded that too.
Soon, there was momentum in the company, and the revenue goals kept increasing. Now, he’s well on his way to getting to $100M.
That’s the power of Kaizen. Try it.
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View original answer on Quora.