In today’s issue …
- Goals Increase Your Chance of Success
- 513 words, total reading time less than 2 1/2 minutes
We are big believers in goals. They give people something to shoot for. They provide a basis for planning further investment in your company. And they let you know when you’ve achieved success.
Our experience, though, is that many business owners don’t formally define their company goals. Oh, sure, many have a revenue target in their mind – but is it written down anywhere? Is it broken down into monthly targets? Are actual results reviewed against goals every month?
When an owner does this for his/her business, s/he goes from hoping, to managing. The likelihood of success increases dramatically.
The same thing can happen with your employees. If you provide them with measurable performance goals, they will go from hoping you think they’re doing a good job, to knowing when they’re doing well. And you’ll know, too.
Now, this is not easy with your clerical and support employees. But it’s really easy with your revenue producers, i.e, salespeople and technicians. You can give salespeople a monthly sales quota. And you can give installers a daily/weekly/monthly installation quota.
Here’s how a daily goal for installers might be developed…
1) Multiply your annual revenue target times the % of revenues that will come from labor. Eg, a $2.5M annual revenue goal, with 30% likely to come from labor, equals a $750K annual labor goal.
2) Divide $750K by 12 = $62.5K per month. There’s your monthly goal.
3) Divide $750K by 52 = $14,425 per week. There’s your weekly goal.
4) Divide $14,425 by 5 = $2885 per day. There’s your daily goal.
Already, you are way ahead of having no goals at all. “Install team, we need you to bill $2885 in labor, every day.” They won’t hit the number every day, but everybody will be working towards it and success will become tangible.
But while $$ are a good currency for salespeople, a better currency for installers is hours. So, two more steps to get to a really good daily goal for installers…
5) Divide $2885 by your average hourly billing rate. Let’s say it’s $100/hour… now the goal is 28.85 billed hours/day. Let’s round it to 30.
6) Finally, divide 30 by the number of techs you employ. Let’s say you have 6. The daily success goal for every tech is to bill 5 hours/day.
That was simple, right? And 5 hours/day doesn’t seem a daunting goal, does it? Well, it isn’t easy.
We’re talking 5 hours per day, per tech, 52 weeks per year. With vacations, trainings, sick days, be-backs, and jobs taking longer than they should, 5 hours billed/day is challenging. That’s why, in our dashboard system, 5 hours per tech per day – 60% of the 8 hours you pay them to work – is benchmarked as a really good outcome.
To learn more, check out the recording from the June 7 “1st Friday” webinar, where we discuss this in more detail.
Bottom line: do the exercise; set the goal; share the goal and outcomes with your team. Improvement will follow, guaranteed.