Why set 3 Year Goals?
You should have already identified the purpose behind your business which should be aligned to what you are passionate about. You may have a big dream or more concrete overall goals to where you would like to take the business. Examples include team prosperity, growing it to sell, changing the world with a new idea or something that you can pass on to future generations. This article explores how you can set 3 year goals that will help you achieve your dreams in the long term.
This reason why you need such a longer-term view is so that you make the right choices now that will take you to your dreams.
Setting your 3 year goals is about making progress to achieving your goals.
A shorter-term objective of 3 years focuses your acquisition of knowledge and competence and helps you organize your time and resources so that you can make the most of your time working on the business.
By setting clearly defined goals, you can measure and take pride in their achievement. You will also see progress on what can seem a long journey and provide opportunities to celebrate success along the way. This also boosts your confidence as well as those around you.
So how do you set your 3 Year Goals?
Your 3 year goals need to motivate you and your team. They also need to be SMART.
SMART goals should be:
Specific means that you should have a clear idea of what success looks like. It’s when you can celebrate the completion of a project, task or goal.
Measurable means being able to measure whatever it is you are trying to achieve. For example, sales revenue is often used as a Smart objective because you know when you have achieved that value of sales.
Attainable means that you should be able to achieve that goal in the timescale that you have set. So if you are looking to grow your business within 3 years you need to have idea of whether your projected growth is really attainable.
Relevant means that it is important to you. Working towards a chosen goal often means making choices, is the goal important enough to you to help you make those hard choices that will inevitably arise?
Time-limited so that you know what success should look at within a specific time frame. With 3 year objectives, there is an obvious time limit. For the growth of a business, a 3 year time limit is sufficiently far off so that you can’t easily predict what will happen but not so far off that it is difficult to see how you would achieve it.
Once you have identified your 3 year objectives, you need to write them down and share them with your team or people who need to know so that they can help you towards your goal.
For your 3 year business goals, I usually frame them to include how much sales revenue and profit you want to make at the end of the 3 years. I also include the main products and services, to which customer segment and which geographic area.
So a widget making company, selling nationally to large blue-chip customers might state their 3 year goals as: In three years’ time, we will have sales of 2 million with a profit margin of 10%, selling our top line widgets nationally to blue-chip customers.
This then would be communicated across the business so that everybody is clear on what the company is looking to achieve. For smaller companies, net profit is often replaced by gross contribution as that is more under the management’s control rather than net profit which is usually managed by the accountant to present the right numbers in the audited accounts.
Personally, I would review your 3 year goals every 12 months around December so that when you come back from the holidays you are reinvigorated for the tasks for the next 12 months to get you nearer to your longer-term goals.
So here is your takeaway from reading this article.
- The first is to think about what turnover you would like in 3 years’ time. It’s worth noting that if you can achieve 20% growth year on year you will double your business over a 3 year period.
- Secondly, think about your profitability. Can it be improved? If so, include this in your objectives.
- Thirdly, think about what you want to focus on over the next 3 years. What is your most popular and profitable product or service?
- Who are you going to sell to? Who are your most profitable customers?
- Think about geography? Is this important to you? If you wanted to expand geographically what do you need to do?
Finally, write these down and talk to your team and get their input and agree 3 year goals that will motivate them and kick start growth in your business.
Thank you for reading this article.