The Most Practical, Actionable Goal Setting Advice You’ll Ever Get
You Need To Find Your “Most Important Number”; It’s The Missing Link Between Where You Are Now And Where You Want To Be
Let’s talk about goal setting for a minute.
If I ask 100 business owners to tell me their goals for their business, 100 of them will respond in terms of an annual dollar figure: $1 million in sales. $3 million in sales. $10 million in sales. Whatever their number is.
While these goals are commendable, they’re also big, vague, and hard to wrap your brain around. If you’re currently doing $1 million in sales and you’d like to get to $2 million, it’s nearly impossible to see how to get from point A to point B. These kinds of goals are stillborn; they lack power to motivate because they’re too hard to conceptualize.
Which is why I encourage business owners to figure out their MOST IMPORTANT NUMBER instead.
Here’s how it works: Instead of setting the vague annual sales goal, I ask business owners to first tell me all the different products they sell, and what percentage of their business each product represents.
Immediately I zero in on your “bread and butter” product or service, whatever the majority of your sales come from. So next I would ask what the typical sales price and margin is on this product or service, and how many of these you sell in an average month.
Let’s say your answers are: $8,000 sale price, $4,000 in margin, and 5 to 10 a month. I won’t allow ranges for an answer, so I’ll press for a REAL average. Let’s say it comes in at 8.
So here’s what you just told me: In a typical month, you sell 8 of these products or services for a total of $64,000 and a margin of $32,000. This is the baseline.
Now answer this question: To get your business to where it fulfills all your financial goals, how many of these a month would you need to sell? I’m not looking for the “I need to make ten million dollars a year so I can buy a yacht and run amok like a rock star” answer. I’m looking for the “how much do you need for the lifestyle you want and to prepare for a comfortable retirement” answer.
Take some time to think through this and write your answer down.
Notice that I am only asking about the product or service you get most of your business from, not everything. It’s infinitely easier to focus on one thing than on many. By asking this question I am not suggesting that selling other products or services is wrong or a problem, I am simply asking you to focus right now on your ‘bread and butter’ product. Whatever it is, focus on it, and write down your number!
Whatever you just wrote down is YOUR MOST IMPORTANT NUMBER.
It’s the number that your brain can focus on and work to solve. It becomes the simplest of all measuring sticks—in a given month, just compare results vs. your Most Important Number. But we’re not done yet.
This leads to another important follow-up question: Are that many sales even available in your market? When the question is posed this way, it’s a real clincher, because the obvious answer is YES, OF COURSE.
Think about it, how many competitors do you think there are? (a ton) How big is the market? (huge) How many of these are being sold in the entire market every month? (a ton) This all suddenly makes whatever you are currently selling seem very small and insignificant, and opens your eyes to the possibility that more sales are not only available, but that NOT getting more sales is practically inexplicable.
Now answer those questions for YOUR business and YOUR marketplace:
How many competitors do you have?
How big is your geographic market?
How many of what you’re selling are being sold in the market each month?
Back to the example: Let’s say that your MOST IMPORTANT NUMBER is 25. That would be $200,000 in sales, and $100,000 in margin. Now answer this question: If you achieved that many sales, how much of that would you be willing to spend on marketing to achieve it?
Most businesses will spend up to 15% of the SALE price to get a sale, which is an EXTRA $20,400 a month in marketing. This is in addition to the $9,600 ostensibly already being spent to get the original $64,000 in sales. That’s a total marketing budget of $30,000.
I’m not saying an extra $20,400 is available in cash flow to spend on marketing every month. And I’m not saying that even if it were that you’d instantly get to 25 sales a month. BUT you now have a formula for succeeding in your business: Spend $30,000 a month on marketing to get to 25 sales a month. This much is certain: NOT spending incremental dollars on marketing is NOT going to get you where you want to go. And this is the major obstacle holding back nearly every company I ever talk to. Instead of thinking in terms of specific budgets required to hit specific numbers of specific kinds of sales, they have big vague numbers that they have no clue how to get to.
Which leads to the final, all-important question: If you DID spend $30,000 a month on marketing JUST FOR YOUR PRIMARY PRODUCT OR SERVICE, what would you spend it on to get the 25 sales?
I’ll answer that question with several different options in the next blog posting. I’ll also show you how easy it is to get the money—believe it or not, it’s probably right under your nose!
But for now, I simply want you to figure out: WHAT IS YOUR MOST IMPORTANT NUMBER? Knowing this simple number will liberate your brain; you’ll be able to see that your number is not nearly as intimidating as you may have thought. It’s imminently achievable. It will open your mind to possibilities of how to achieve it. It will empower you to create a specific, detailed plan to get where you are trying to go. And it will allow you to narrow your focus to one major thing.
So what is your MOST IMPORTANT NUMBER?
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