Early on, most small business owners have easy to define but completely unwritten business objectives. They usually look something like this:
- Sell jobs.
- Complete jobs.
- Get paid for jobs.
- Don’t go broke or get arrested.
After time, assuming you somewhat accomplish your objectives most days, you reach a point where you feel confident you can turn the lights on again tomorrow to give it another go. Congrats! It’s now time to play Level Two Business Owner and build structure. But herein lies the rub: too many owners stay at Level One, focused on busy work, not productive work.
Multitudes of small business owners have a way of being impulsive. (I would dare to say “flaky,” but I want you to continue reading!) One of the main reasons you became an owner is because you didn’t want to be held accountable to anything or anyone as you move forward in whatever direction feels acceptable that day. You lead with your heart and manage with your gut. Truth be told, it’s why you are successful. You are good at it, and this ability to pivot on a dime is critical early on in your business. This consistently inconsistent strategy is also an immovable wall of frustration as the company grows and more employees are involved.
Established businesses need clear and steady planning, goals, and communication to build the structure that allows it to scale for profitable growth.
Simply put, you rely on your employees to know your expectations and to drive activities to help build your business. But if those expectations are not clearly communicated and defined, how will they happen? How will you hold your people and yourself (gasp!) accountable? Worse yet, what if those expectations are communicated but constantly changing? I’ll bet this last question hit home with way too many of you.
At Violand Management Associates, our most successful clients craft one specific tool every year to define, manage, and measure growth while creating clarity and direction for their team. That tool is their Major Business Objectives—statements of work to be completed in the next twelve months that are specific and measurable. Another way to say it is they are a list of approximately three to five most important action items their company will accomplish in the upcoming year.
Major Business Objectives are the steps an organization needs to accomplish to meet a determined long-term goal. They will help track employee and company performance and ensure the business continues to grow and develop. They can address either potential opportunities or potential threats.
There are several types of Major Business Objectives to consider:
- Sales/Growth: specific targets for selling, growing market share, and creating brand awareness
- Financial: typically include profitability, cash flow, debt reduction, and accuracy
- Human Resources: human capital management, staffing demands, compliance
- Operational: new service offerings and increasing efficiency and production
- Social: Community involvement, charity, and company culture
- Technology: procurement and usage
Of course, the owner may secretly have one or two for themselves, such as how to find the time and money to put gas in the boat they bought on a whim last year or figuring out how to get Junior to settle down and show up to work on time without creating family drama that will ruin Thanksgiving dinner.
When creating your Major Business Objectives, it’s important to relate them back to the big picture. Where do you want the company to be five years from now? What will it take in 2023 to get the ball rolling? Identify who from your team will be tasked with managing and performing each objective and then get their input. People are much more likely to buy in and outperform your expectations if they have some skin in the game when creating the Objective.
Next is to break down the Objective into step-by-step strategies to complete throughout the year and to give each an estimated completion date. You may be tempted to put February for all of them, but that’s ridiculous; don’t do that. You still have a business to run and rooms to dry out.
Once you and the employees involved in the planning process have come to agreement on the strategies, then assign responsibilities, dates, and budgets. If everyone feels confident that the Objectives and tasks are both challenging and achievable, implement your tracking measures. Nothing breaks down the process faster than waiting until August to realize something that was supposed to be done in March still isn’t finished.
To help you get started, here are some examples of Major Business Objectives I have seen from other restoration companies:
- Increase water mitigation gross sales by 15% and net profit by 8%.
- Begin offering crawlspace encapsulation in Q3 and complete ten jobs by year’s end.
- Utilize online technical training classes, with all technicians completing the requirements for WRT and ASD Certifications.
- Reduce turn on receivables to an overall average of 30 days.
- Join the Restoration Industry Association and attend two or more functions.
- Reduce overall employee turnover by 30%.
To better understand how to break down an Objective into short-term strategies and tasks, let’s look at the last one on reducing turnover. Strategies may include creating written job descriptions for all current roles in the company, implementing quarterly one-on-one wellness meetings with all employees to discuss job satisfaction and performance, and offering work-from-home options where available.
Major Business Objectives help create the structure that will allow your company to scale for profitable growth. They are strategic, and because they are added work outside the traditional day-to-day responsibilities, they are easily skipped over. This is a mistake. Besides understanding that completing them increases profit, reduces liability and risk, and improves the overall value of the company, remember other unexpected benefits such as building employee collaboration and contributions, controlling costs and budgets, and structuring tasks and responsibilities.
In my role at Violand, I speak to a lot of restoration small business owners who are looking for help. Many believe there is a silver bullet system that will fix everything overnight. There isn’t. Instead, there are step-by-step strategic responsibilities that need to be defined, assigned, and completed which will result in slow but steady progress toward your long-term vision of success. How do you lose 100 pounds? One pound at a time. How do you grow your business? One day at a time.
Major Business Objectives provide you the guidance and direction to reach your goals at a pace that is reasonable, manageable, and most importantly, profitable.