What to Research to Set Proper Business Goals
We had just finished our first personal training session and my client was exhausted.
After completing our workout, I followed my similar routine and asked what her fitness goals were. My strategy was always the same, the first workout was a set of standard exercises to see where clients were physically for me to understand their fitness level. When we finished the workout, I would ask them about their goals.
Almost every one of them said, "lose weight." I would immediately reply that losing weight is a result of a healthy lifestyle, however, it is not the goal. For example, one client kept telling me she wanted to lose 15-20 pounds, yet I kept pressing her to tell me her real goal. She was getting married in a few months and purposely bought a wedding dress two sizes too small. Her goal was to fit in the wedding dress and losing weight was a result of reaching her goal. Whenever workouts became tough all I had to do was whisper, "wedding dress" and she would push to finish her set.
Goals are specific and outcomes are general.
Similarly, too many companies move forward with no specific goal of where they would like to go with their business. They usually say, "we want to increase profits!" While there are multiple ways to increase profits, the goal must be focused. Is the goal to reach more people, sell more products, increase margins, decrease the cost of goods, or something completely different? Profits increase when a clear goal is determined.
When it comes to your business goals, marketing must be at the center as your advertising campaigns will be the visual and verbal expression of your goals to your current and potential customers. Refining your goals and marketing efforts should come through discovery research.
Research is the key that many people reject because it is difficult, time-consuming, and most do not have a background in proper research.
I have a unique background with a Master’s Degree in Anthropology which is research intensive, an MBA, and a decade working with clients in human services. Over the years I have developed research techniques that help companies set an actionable goal and then a proper strategy.
First, you need to identify where you are starting, i.e. your research will depend on your business. Are you an entrepreneur, small-to-medium business, or part of a team at a large company? Let’s use the example of a start-up that needs to do research before setting a specific goal. Here are some of the main steps I recommend. Keep in mind there are details within each step, however, this can get you started.
Start with the basics:
- What are you going to sell, a service or product?
- Will you need funding or can you start lean?
- Do you have an expertise in your potential business?
- These are basic questions that many people neglect yet they should be answered.
Move to a market analysis:
- What does the market environment look like for your potential company, i.e. are there potential customers where you want to start your business?
- Be brutally honest when doing market research, just because you think something is a good idea does not mean the market will respond.
- If there is a market, define who they are through a customer profile.
- Look at your direct and indirect competition, if you are selling a product who is your direct competitor and which companies have a product that could be substituted for yours?
- What is the risk of going into business? Look at other companies that have done something similar, did they make it or go out of business? Are there start-ups that you could contact to understand the risks and challenges they overcame?
The market analysis is where most start-ups should stop. I have met people who went through the proper research and found that there was not a market, there were not enough customers to support the business, and the competition was too steep. Yet, they thought for some reason they would succeed . . . they did not.
If the market analysis provides data that suggests moving forward, research a marketing plan:
- Where will you sell? Will you have a retail space, online store, co-op with another business, go to trade shows, etc.? You might want to combine ideas, yet make sure to examine how others have succeeded. If you are selling a service, do you need an office? Could you use a shared workspace or work from home?
- What is a good price for your service or product? Again, do your research. Look online at competitors, go to similar stores, call businesses and ask for their pricing, and find a wholesaler online. I wrote a business plan for a gourmet candy shop and easily found wholesale prices online which allowed us to set a proper pricing strategy.
- Research an initial marketing strategy. I recommend start-ups begin with what I call an “organic strategy,” i.e. start with your network. An organic strategy would include: promoting to your friends, family, and professional network through emails, phone calls, in-person meetings, and a “soft launch party” at a fun location. Besides an organic strategy, research other marketing techniques: email marketing, social media, long-form blogging, website design and optimization, print collateral, pay-per-click, etc. Your research needs to be thorough before moving to your definitive goal and “hard launch.”
The final main item to research is a financial plan:
- Based on your market analysis what are the worst case, most likely, and best case scenarios for your revenue for the first six, twelve, and eighteen months? Again, look online or hire a professional who can analyze the market and other companies.
- What are your capital requirements? Selling a product will likely have higher capital needs than a service. Will you need equipment, employees, contract workers, specialized software, a contingency fund, etc.?
- How long can you go without money? This is critical and a mistake I have seen many make. They think they have an idea that will instantly make them rich, here is a good article that explains the reality of “overnight successes,” spoiler, it takes years.
This is another place where most start-ups should stop because they do not have enough resources to last six months without revenue. If that is the case then save, keep a business small before becoming a full-time entrepreneur, or find a trusted partner.
We can finally set a clear goal when the basics of research are complete. Let’s imagine that the above example did the proper research and found:
- There is a market for their service
- They should target small-to-medium businesses
- They will sell through their website
- There is no need for an office as they will work at client sites
- Their marketing strategy will rely on reaching out to their network, utilizing digital media, inbound marketing, and speaking at local business group meetings
- They have minimal capital requirements and can go six months without having a client and still pay their monthly expenses
Goals can now be set:
- Attain three clients within six months and five within twelve months
- Have $100,000 in billing by the end of the first fiscal year
- Hire a contract worker to conduct administrative tasks
- Go to one networking event each week to build relationships
- Connect with one potential client per week
Notice how the goals are specific and can be reviewed frequently.
More goals could be added, yet one of the secrets to good goal setting is that there should not be too many as your time will become exhausted. Saying ten clients instead of five sounds more impressive, however what about the time it takes to meet with clients, perform billable work, do administrative items, among other tasks? All of a sudden ten clients would not receive enough attention and the start-up’s reputation would sink before it had a chance to rise.
The overall takeaway is that goal setting should be done after proper research which takes time. However, the time it takes to do the initial research is likely the difference between success and failure.
I purposely used an example of a start-up since I have worked with many and the research is somewhat simpler than an established company. Many of the steps are the same for a small-to-medium business looking to grow, introduce a new product, or re-evaluating their current goals and strategies.
I take research seriously as it is the foundation of marketing and developing a business. At Elisha Consulting we enjoy working with start-ups and small-to-medium businesses on market research, goal setting, and then taking goals to the next level of strategy.
Contact us today if you want to take your business to the next level.
For those interested in specific research techniques, I highly recommend:
- Wayne Winston’s Microsoft Excel 2013 Data Analysis and Business Modeling: the best book on how to analyze data with Microsoft Excel.
- Dr. H. Russel Bernard’s Analyzing Qualitative Data: one of the premier authors on how to properly understand qualitative data, i.e. interview responses, surveys, etc.
- Anything by Jim Collins, as he is one of the best business writers when it comes to using verifiable data.
Photo Credit: João Silas