Objectives

Chapter 3: Initial Assessment - Page 3.7

Objectives

Objectives are business goals. Set your market share objectives, sales objectives, and profit objectives. Companies need to set objectives and plan to achieve them.

Make sure your objectives are concrete and measurable. Be specific, such as achieving a given level of sales or profits, a percentage of gross margin, a growth rate, or a market share. Don't use generalities like "being the best" or "growing rapidly."

Broad statements like "maximize customer satisfaction" are not serious business plan objectives, because they cannot really be measured. Much better objectives would set measurable goals, such as holding gross margin to 25 percent as a minimum, or selling more than $3 million, or achieving six percent profit on sales and ten percent return on equity.

If less tangible goals are critical to a plan, find a way to measure them. For example, if image and awareness are vital, then plan for statistically valid surveys to measure the improvements in image and awareness. You can also set goals for market share, and purchase research to measure the actual share. Or, if you want to focus on customer satisfaction, plan for a survey to quantify satisfaction or specify numerical objectives regarding returns or complaints.

Palo Alto Software's business resource website Bplans.com offers several easy-to-use online calculators that are excellent tools in helping you to do an initial assessment.

Summary

At this point, you've started a plan.

If you're working on a plan for an existing business, then you've probably covered old ground. Your company already has customers, operates in a known market, and has lived through the evolution of sales and costs and expenses. Still, planning is an opportunity to take a new, fresh look at the business. Change is constant. Your business is changing and your market is changing, so the regular fresh looks are important.

If you're working on a plan for a new start-up business, you've taken important steps towards defining your business, your financial break-even point, and your total potential market.

How does your business look from this viewpoint?
Does it make sense?
Can you make the sales you need to break even?
Is the market big enough?
Are your projections realistic?
Can you bring together the keys to success?

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