SMART is an acronym. A client, new in business, has set himself a goal to achieve a sales total of $500,000 within five years. If this target is to be workable, it should conform with the SMART acronym which is:
Specific
You know exactly what the goal is – $500,000 of sales.
Measurable
The goal is not vague. It can be measured and therefore achieved.
Achievable
Is $500,000 of sales realistic? It should be reasonably hard to get but not impossible.
Results orientated
Is it aimed at producing results? The object is to increase income and by achieving the sales, this client who provides services, will achieve an increased income.
Time framed
It’s no good setting a goal of $500,000 of sales, which you might achieve at any time. The target is five years. This helps focus the mind regularly on making changes to get there on time.
Whenever we meet this client, we find out how he is going towards his target. Since he is providing services, he has run out of personal working hours. If he could produce 2000 chargeable hours per year using his own efforts, (a near impossibility when you have to allow for marketing and admin time) at $150 per hour, he would hit a ceiling at $300,000 income per annum. He must now employ staff or contractors.
We monitor the profitability of the business to ensure these people are adding to the bottom line, not taking away from it.