Corey Adams
It is probably too late already. It is December. Most of our fiscal years are still calendar-based. The good news is that come January 1st, we get to do it all over again. I am sitting here thinking of my yearly goals and how we have hit some and lost some, and more importantly, why.
Many of us start out the year with goals. Some easily obtainable, others that require focus, and yet some more that, in all reality, are unreachable. That is ok, but where many fall flat on their goals is how they are structured.
Goals need to be structured in a way that allows checkpoints along the way. Yes, long-term goals are necessary for all of us, but we often stray from them when we do not have those checkpoint goals built in.
As an example, let us look at a basic yearly number goal. You say you want to complete $2,000,000 in contracts next year. Ok, great! What now? To structure the goal correctly, we need to take the long-term goal and break it down into short-term goals with the long-term goal in mind. This means that we need to do $1,000,000. by July 1st, $166,666 each month, or $38,462. each week. Are you prepared to do that in week 1 of the first quarter?
To break it down even more, if your close rate is 50%, you need to bid $4,000,000 next year, $2,000,000 by July 1, $333,333 each month, or $76,923 each week. But wait, there is more.
If your attraction rate, or lead rate, is 20 per week at an average ticket sale of $25,000, can you benefit from more leads or higher ticket sales? You get the point. Structuring your long-term goals into bite-size chunks can help you identify the tasks that have prevented you from reaching your previous goals.
Goals without structure are nothing more than hopes and dreams.
Another common goal mistake we make as contractors is focusing all of our goal attention to money. Yes, I used money as an example, but that was just the common denominator. Goals need to be set for multiple aspects of a company. Safety, turnover, client satisfaction, material overruns, etc. They all need goals.
The best way to think of these was introduced back in 1981 by George T. Doran in Management Review. We have all heard it, but at this time of the year, it is good to review. Goals must be SMART.
SMART is an acronym for Specific, Measurable, Achievable, Relevant, and Time Based:
Specific. Goals need to be specific. Saying I want to grow next year means nothing without the specific growth you want to see. For example, I want to grow our gross sales by 30% while holding our net profit margin to 15%.
Measurable. If you can’t measure it, you can’t compare it. If we don’t keep score, how do we know if we win or lose?
Achievable. Can you even do it? We all have constraints right now with the labor force, material delays, logistics, etc. Is your goal one you can achieve, or is it just a dream?
Relevant. Company goals must be relevant to the company. You setting a goal of buying a Ferrari next year has nothing to do with your company. Company first, the Ferrari will come. Haha.
Time Based. Yearly goals are the norm, but as we saw above, structured short-term goals are what keep the entire thing moving forward. You have to set goals with a deadline; the shorter the better. It helps fight off the human nature of procrastination and keeps you focused on the end game.
I talk to a lot of contractors that say they have goals. Really, that is great, but how you are going to reach those goals is more important. You need to spend some time investigating, strategizing, organizing, and implementing daily habits that can turn huge dividends in goal achievement.
As the new year approaches, it is time to get ready for it. I hope we all go out and have our best year ever. At least, that is one of my goals.