September 22, 2019
Goal Setting – Ensuring Success
Did your business meet its last year goals? If so, congratulations! If not, why not? Is it because they were unrealistic, unmeasurable, ill defined, or worst yet, because you didn’t have any?
b2b Solutions works with a wide range of c-store retailers from single store operators to some of the major oil companies. We have found that almost all like the rapid pace of the business. However, successful c-store retailers also take the time to set goals and develop plans to achieve them.
How do you increase your chance of success last year? The first thing you need to do is review what happened. See what went right and what didn’t. For example, did your overall sales meet your expectations? If not, was it due to poor sales in a specific category, several categories, or just poor performance overall?
Once you have determined what happened, it’s time to figure out why. Did a competitor open nearby, was there a change in ownership of one of your competitors, did someone remodel and out position you, did they change their pricing strategy on a category or did you makes changes within your business that negatively impacted your sales? The answers will help form the basis for developing your goals for 2006.
When setting goals remember some basic guidelines. Goals must be:
Goals must build on one another rather than conflict each other. While it is possible to have the dual goals of reducing shrink and increasing sales, they can easily conflict one another.
For example, we have a client that sells higher end car models. Sales dramatically increase when the models are displayed so that customers can pick them up and examine them. However, this also means that there is an increased risk of shrink. After testing in a store, he determined the potential increase in sales more than offset the higher risk of shrink.
Many of b2b Solutions‘ clients tell us that they want to increase gross margin next year. Good goal, but the devil is in the details. First question we ask them – as a percentage or in dollars? (FYI – we urge all our clients to measure gross margin in dollars.) Then we ask what categories, which items and how much?
You have to have systems in place to measure your progress towards your goal (or let you know when you have reached it). For example, having a goal of achieving a 1.5% shrink means having not only a P&L that has a Inventory Shrink line, but having the processes in place to accurately measure and report shrink.
Another example is clients who want to increase their cigarette sales but they only measure is in dollars. That’s a very easy goal to achieve – simply wait for the next price increase. If they truly want to increase cigarette sales, then a system has to be in place to measure sales in terms of units – packs and/or cartons.
Related to time
Is this something that you want to achieve in three, six, nine months or by year end? If you don’t set a timeframe and hold yourself accountable, you are really not setting a goal, but expressing a wish.
Don’t set yourself up for failure. Setting “stretch goals” is not uncommon in business, but setting goals that can not be reached is a waste of time. Worst yet, they create a climate of failure and frustration.
For example, a fairly common goal is to increase foodservice sales. However, in most cases this requires additional capital be applied. Don’t set a goal to increase this category unless you have the ability to fund it and the expertise to accomplish it.
Once you have goals that meet these basic criteria, you must then develop a plan to achieve them. You must answer the who, what, where, when, and how? Too many companies that actually set goals fail to develop a plan to support those goals or fail in the execution of their plan. If you do all three you will have a more successful year.
- Senior Management