Summary: Let’s talk about one of the best business goals you can set for yourself that’ll push you further to achieve more and to really challenge you
As you grow older, you’ll recognize the increasing value of stretching your body. And as you plan to grow your business, you also should be thinking about stretching – as in your goals.
While entrepreneurs are thought of as a freewheeling lot, that isn’t necessarily the case. Sure, there are some big-time risk takers out there, but there are just as many (if not more) business owners who are unsure of their future or are overly cautious. Let’s start by defining a stretch goal.
Simply put, a stretch goal is a target that might be a bit beyond what’s considered a reasonable expectation. For example, if your business has grown by five percent annually and you expect steady growth, eight percent might be a reasonable stretch. Experience shows that often those stretch goals become achievable. Sometimes market conditions change, other times, the value of a product or service that is slow to catch on is suddenly recognized. And often, entrepreneurs are unaware of the many funding options open to them; securing additional funding to bolster inventory, add a sales team, increase product development or multiple other needs may be the missing key to increased success.
Let’s try a brief exercise on stretch goals that looks two years ahead to 2021.
First, what are your stretch goals in terms of revenue and earnings before interest, tax, depreciation and amortization (EBITDA), as well as the numbers for the most recently completed financial year and projections for the current year? As a reminder, remember that EBITDA measures a company’s operating performance without factoring in tax numbers, accounting issues and financial questions.
From there, describe three things that are hindering your business.
That might entail anything from a weak distribution system to the departure of key management members to a competitor introducing a better product or service to limited inventory. Theoretically, the number of hindrances is unlimited – these are just a handful of examples. Now, what’s a ballpark figure for the amount of capital infusion you would need to accomplish your goals?
All this information, combined with questions used to judge risk tolerance, will enable a lending expert to pinpoint lending options that are best-suited for you.
Remember, the idea isn’t to push you out of your comfort zone. It’s more to show you that, from an outsider’s perspective, you have a chance to make real gains. And it’s about adding clarity to your business goals while removing doubts you may have harbored about your operations going forward.
To further assuage any doubts, “stretchers” can be classified into a few different categories.
Conservative stretchers may be happy with five percent annual growth, while moderate stretchers fall in the five to 15 percent range. So-called aggressive stretchers push for 15 to 25 percent annual growth, a rate that will have those entrepreneurs, by necessity, planning and investing ahead of the curve.
And for those striving to top 25 percent – let’s call them “rocket ship” stretchers — prepare for an exhilarating but potentially bumpy ride.
Has this given you the tools you need to clarify your realistic expectations?
Golf and entrepreneurship seem to go together, so think about this: If you’re on the green, you’ll never sink a putt if your shot doesn’t reach the hole. As long as you hit the ball hard enough, it may go past the hole, but at least there’s a chance it goes in.
Similarly, if you never stretch a bit, you may never reach that potential that may not be so far out of grasp.