In this session of the Dan and Matt Podcast we discussed the importance of setting SMART goal for yourself and business. Having SMART goals is important first step in the transition of any business from day to day survival to growth and prosperity.
Items mentioned in this Podcast:
1. Free Project Management -?https://app.asana.com
2. Website Building Tool -?Weebly – The Easiest Way To Create A Website – http://www.weebly.com
Matt: Welcome to the Dan and Matt podcast. Now, this is our first ever episode of: The Dan and Matt podcast. So, before we get started I’d like to thank you for listening, and for people that have gone back to listen to our first podcast, welcome and thank you for starting with us. Now, before we get started, I’d love to explain the reasons behind starting this podcast, but before I do so, I’m going to introduce Daniele Lima to the podcast as well.
Dan: Good morning Matt and welcome to everybody.
Matt: So for people that don’t know me, my name is Matthew Pollard and Daniele and I started this podcast specifically to help business owners or potential business owners with their sales and marketing strategy. But also their business strategies because with that, if additional sales come through, a business can collapse. And also, without structure in a business, the marketing and the sales don’t know where they’re heading. So before I get started, I just want to highlight that the core purpose behind this podcast is specifically to help business owners and we’re going to do our best to hold nothing back. And I’m going to ask, if anybody has any questions throughout any of these podcasts, feel free to email us, finding our email address on our website through the “contact us,” page on danandmatt.com. But during these episodes, we will be talking about a lot of concepts and we hope, and it’s our soul and belief that you will be able to apply these directly to your businesses. Now, primarily, we wanted to focus these podcasts in the world of sales and marketing. But as all business owners realise, without having business goals to know where you’re heading and why, it is very hard to set your first marketing strategy. And then your sales scripts and strategy after that. So we wanted to talk to you primarily on the setting of goals today. Now Daniele, why is it so important that business owners have goals?
Dan: Well Matt, essentially we have got, literally hundreds of years of experience in business documentation that shows us, the businesses that perennially do well regardless of geography, regardless of market, regardless of economic conditions, the ones that do well are the ones that set their goals. The ones that fail are almost exclusively the ones who didn’t have goals, who didn’t plan. So it’s a very clear cause and effect relationship.
Matt: Look Daniele, that makes perfect sense because the more and more that I consult with business owners, I tend to find they keep saying to me, “I’m stuck in the day to day, I go to work every day, I do what I do. Sometimes I make money, sometimes I don’t and regardless, I don’t feel like I’m heading anywhere. I got into business to get that quality of life that, as a person taking that risk definitely deserves, but I don’t feel that I’m getting anywhere.” And what I, I guess you’re saying is without goals, it’s very hard to know where you’re heading and set plans to do that.
Dan: Yeah, absolutely and it’s not just very hard, I’d say it’s impossible. I mean, when do you know if you’re doing well? When do you know if you’re not doing well? It’s a virtual impossibility and ultimately those businesses are doomed to fail.
Matt: Ok, and look I agree with you and especially with, I mean whether people believe there is a global financial crisis or whether the economy is struggling, the fact of the matter is 95% of businesses fail within the first five years and then the future for those other businesses seemed bleak. Without making plans and making goals, you’re just setting yourself up to fail. So today, we’re going to be focusing on something we call and the rest of the people that are big in goal call smart goals. Now anybody that’s heard of smart, today we’re going to be focusing primarily on the first
five letters, however Daniele will also be introducing at the end of this session, two additional letters, or we’re going to call smarter goals, to allow you to really drive your businesses forward. Now, first I guess the main thing we need to do is define what this word smart means. So Daniele, I’ll get you to take us through each and every letter and then we can further break down what each one of those is for and key points behind them and what happens if you don’t utilise that letter as we move forward.
Dan: Yeah absolutely and in fact as you said that Matt, I’ve got a fantastic real world example that I’d love to share with our listeners a little later as to what happens if all five aren’t present. But we’ll leave that for the moment. The five letters in smart stand for specific, measurable, achievable, relevant, and timely.
Matt: Ok specific, how do you know what a specific goal is? I mean, if I just set a goal to make a million dollars before the end of the year. Is that a specific enough goal I’m trying to make a specific amount of money?
Dan: Yeah look that is, it’s a finite amount i.e. I want to make a million dollars and you know exactly what’s required to achieve it. Putting it another way, if I asked you the question Matt, “What does success look like?” You’d say, “Well, I’ve got zero today, by the 31st of December I need to generate a million dollars. So it is a very specific objective you’ve set then.
Matt: So I guess though, if you’re looking at, “I want to make a million dollars,” without anything else around it, that’s just a wish really isn’t it?
Dan: Exactly. It’s incomplete. It may not be wrong, it may be the perfect goal for your business, but it’s incomplete.
Matt: Ok, so let’s look at the measurable element then.
Dan: Yeah, the thing is, if you want to achieve something, it’s got to be measurable. You’ve got to have a tangible way to show whether or not you have achieved that thing. So for example if in a business you’re wanting to increase your sales to a million or by a million, then if that is measurable – which is the second component. Because basically we have the ability to monitor, to track what revenue stream comes through the business. So it’s definitely specific and it’s definitely measurable.
Matt: Ok, so for those listeners who are out there thinking, “Oh a million dollars turnover, oh I’d love to, or profit – I’d love to do that, I’d love to make a million dollars. But at the moment, my business is lucky to make 30 or 40 thousand dollars.” Or, “I’m just about to start a business, that’s kind of a hard goal for me. We’re going to be moving in to some, I guess the next steps that allow you to pick more achievable goals. Dan: And that’s spot on Matt and I mean you’re absolutely online here, how achievable is it that if you’re, you’ve pre-empted there by saying it’s a new business. Well, very few
new businesses, which by definition are in the first year of operation actually make money. Forget about make a million dollars, the majority of businesses in their first 12 to 18 months don’t even break even. Because they’ve ploughed so much money into investment and set up costs that even if they’re earning money, they’re not even breaking even on their investment. So if you’re a new business, then making a million dollars may be unrealistic.
Matt: So what you’re suggesting, I mean let’s really tap this back into the smart concept, the third letter is achievable. So you really need to be looking for goals that you actually can achieve. It’s great to set yourself stretch targets, and I’m definitely one to set stretch targets. But you’ve got to make sure that they are achievable. As a new business, setting yourself an unachievable goal is setting yourself up for failure. It not only won’t motivate you, but it also will make sure that you’re not having your sights on goals that are achievable for yourself and things you really should be striving towards.
Dan: Yeah, and that’s particularly relevant in the first stages of a start up business. Now, you mentioned earlier the mortality rates of start-up businesses. And this is globally, it doesn’t really matter what country we’re talking about. And it’s possibly in part because people are unrealistic about the objectives that they’re setting. In simple words, they’re not achievable. So Matt, for the sake of this example that you wanted a million dollars in your first year. It may be that you’re dealing in a market like selling exclusive motor vehicles. So if it were that sort of a market, I’d say you’d get your million, because they’re worth about half a million each. But if you’re in a hamburger store or something a little more modest, it would be quite difficult to achieve.
Matt: So the most important thing, and I think that this is – I guess we want to set this as a base line for all of our podcasts moving forward. Is that we want to sit and we want to be able to give advice that makes people able to directly apply it to their business. And setting unrealistic goals or goals that are just too much of a stretch target, it doesn’t set reasonable expectations, and we really want to make sure, right throughout this podcast we’re setting reasonable expectations for you. So that you believe in the information that we’re giving you and you believe that if you follow the steps that we give you, you’ll lead to business success. We’re not going to be a podcast that just tells you, “If we do what we tell you, you’re going to be a millionaire by the end of the year.” Because it’s unrealistic, most people that start a business, as we said 95% of businesses fail within the first five years. And I think a lot of that is due to the fact they set themselves unrealistic targets. So I’m going to quickly back step for a second, to go back to specific and say, let’s pretend we’re a business that’s just starting out. What type of specific goal should we be looking at to start off Daniele?
Dan: Well you should have specific goals on just about everything Matt. You should have goals on your revenue streams, you should have goals on your expenses, you should have goals on market share. You should have goals on which products are going to sell and to what extent. You should have goals on target market that you’re going to attract etc. There’s virtually nothing you wouldn’t have a goal on. If you’ve got a website for example, you would have goals on how many people you want to hit that homepage. You’d have goals on all your social media platforms etc. So, early on in
particular you would want some very robust goals around all operational aspects of your business.
Matt: So we’re not just setting a goal of a specific of a specific amount of money that we want to make and putting that in a silo with nothing else around it. There needs to be other specific goals around to attribute to that financial goal. Now obviously we’re not saying a million dollars now, but we’re looking at setting all these specific goals that total in a profit at the end of the year, or a break even or at least whatever your goal is. Is that correct?
Dan: That’s spot on. It’s got to be much broader than just revenue.
Matt: Perfect. Now the next thing is, let’s look at measuring. So we’ve just set all of these goals. We have to make them measurable. So how do we go about measuring certain goals and why is it so important to measure them?
Dan: Yeah well, the thing is, the way we define it ensures that we can measure it. So for example, I’ll give you an example of something that’s, I think a bit of a silly goal. If we’re having a workshop, now I could say, “Well our goal is to have fun today.” Well that’s all well and good but what does that mean? I think when someone says that, frankly it’s a bit of a cop out. Because it’s virtually impossible to measure it, therefore by definition, whoever’s running the workshop can’t fail. You understand what I mean?
Matt: So we’ve got to make sure that the measurable part holds us accountable for something?
Dan: Exactly. And it’s when you get someone who runs a workshop that says, “Look, this is what today will look like. Within two hours of now when we finish, you will be able to do these things.” Now that is something worth hanging around for. And then at the end of the two hours, you know within yourself as a participant, “Yes, I have learned to do those things.” So we’ve measured it and we’ve been able to say, “That was a success.”
Matt: Ok great. So we’ve covered specific and measurable I think in a lot of detail. Now, I think we’ve also looked at achievable because we found that the million dollar target perhaps isn’t achievable. But what other things should people be thinking about when they’re looking at achievable? Because some people I honestly believe undersell themselves Daniele. I believe that they go, “Oh, well you know I just like to be able to find a few customers.” Or, they’re still unsure if people are gonna want to buy off them. Or, because they have an issue with sales and marketing and broaching that, they undersell themselves in what they could potentially achieve. Other people have unrealistic goals and set themselves million dollar targets and are setting themselves up for failure. So how do we set achievable goals?
Dan: Yeah, I think the key to it is you’ve got to go to them, to the industry data, the market data and look for, right, what is the market worth in terms of dollars and cents? How many competitors are in the market? What is the growth rate of the market? Historically over the last few years, over the last twelve months, perhaps the last quarter Etc. What new players are looking to enter the market? When you put all these factors together, and a lot of this stuff of course, Matt as you know, will be the backbone of the swat analysis, the opportunities and threats. In that they are external information that relate to the market and no doubt we’ll cover the swat analysis off another day. You’ll give yourself a very good feel for the market and what would be realistic within the dynamics of that market currently.
Matt: Ok perfect. And I need to be specific, it’s not just a purely financial goal specific. A lot of times you want to set yourself achievable goals. And look let’s use the website for an example. Because become perfectionists when they’re setting goals. Like I want to have a fully equipped website that has podcasts on it, has “contact us” pages, maps for my business, all of my products listed on it. Perhaps, to set yourself an achievable goal, maybe just to have a welcome page, a contact us page, and a list of your products to start. Your second achievable goal could potentially be adding a bunch of other things. But don’t have – even though a goal is achievable, set yourself baby step or minute achievable goals along the way to your main achievable goal as well. It’s also very important to do that.
Dan: Yeah look, I totally agree with that Matt. It’s about incremental advancement and I mean you’ve called it baby steps but I think people understand what you mean that in the scenario you just outlaid there. For example, we’ve set up the website. We may not have an e-commerce set up at the moment, but perhaps people can email us in the first instance and we can email them back some bank details and they can direct debit money or we’ll work something out. But with a view to setting up Paypal or some other payment gateway in the very near future. So you’re right, these things can roll out gradually and as long as you’ve got the main things upfront, then the other stuff will eventually come through.
Matt: Definitely and I think just the pure nature of setting a goal of having a website means that you’re stepping in the right direction. Because most businesses, as I’m sure you know Daniele, they talk about one day having a website, or they’ve been meaning to get a website. But it’s never set as a smart goal, it’s just set as one day in the future nice to have concept and that will never find fruition. So setting yourself achievable goals along the way instead of these stretched or unachievable goals is very, very important.
Dan: Well it’s funny you say that, because as we speak, in Australia 43, 43% of small businesses don’t have a website. Which I find staggering, that in 2014 almost half of all small businesses don’t have a website.
Matt: Unbelievable result. So anybody that’s listening that is in that percentage, maybe that should be one of your goals? Now I definitely don’t want to say that starting a website is what we’re about. I mean, we’ve focused on this purely as a concept for the help of this discussion. But I really want to make sure that you’re setting yourself goals in every part of your business. And that, moving onto the next word relevant to what you’re trying to achieve. So Daniele take us through relevance.
Dan: Yeah look, relevance is as the name suggests, it’s about setting objectives that are related to the type of business you have. So for example. If I want to sell online, keeping this theme going a little bit longer, then of course it will be relevant for me to have objectives that relate to a website. It will be relevant for me to have, “How many hits did I have on the site? How many, what was my bounce rate? How many times did someone buy? What was the average spend of someone who bought etc?” So those objectives Matt, they need to be relevant to the type of business that you run.
Matt: So if I’m in a business that doesn’t really have a specific product or service that could be sold online, the relevancy for me having a website may not seem something that’s important. However, we may just want a website just so if people log online they see we have presence and know that we’re a business that can be trusted. It’s and artefact that our business could be there for a long period of time, as opposed to a fly by night. Therefore, the relevancy may just be to have a website that looks professional, that’s simple, basic and a few pages up there.
Dan: Yeah a bit of increasing awareness and substantiation as you say, but probably not one of the core features.
Matt: Yeah, exactly right and I think it’s very important that people sit there and continuously make sure that they don’t get grandeur in their ideas. Because people can Sometimes say, “Oh I’m going to get a website. If I’m going to have a website, it’s going to be this grandeur thing. And again, the relevance, also the achievability of it, but also the relevance – it’s just not relevant to what you do.
Dan: Absolutely. So yeah, irrelevant to what you do, that’s the key.
Matt: So for people that I guess are looking to build a website, and I’m just going to say this simply, just because I know we’ve focused on it. If people go to a website called www.weebly.com, it’s a very simple – I’m not going to give you anything like an affiliate link where we get paid for you doing it, I’m just suggesting it because it’s a website that you can get a few pages of content through drag and drop, nothing more complicated than Microsoft Word, to set up a basic website. For that 42% of people that don’t have a website, it’ll take you less than two hours. Probably it’ll take you less than half an hour if you’re proficient on computers. And you’ll have a website up straight away. But I just wanted to take that as a side note, and now we’re going to move on time based. Now Dan, talk to me about time based and why that’s important?
Dan: Yeah look, every objective has to be timely Matt, because for example you might say, “I want a million dollars.” Ok, great, but what is that? In a month? By the end of the year? In ten years? ?Obviously it’s unrealistic for a start up business to have a million dollars in less than a year for most businesses. But if you said, “I want to be earning that by the end of the fourth year,” then it’s quite realistic, depending on your market. So we really need to put a time frame on these things to again add greater levels of credibility to what we’re trying to achieve.
Matt: Look, I agree with you and I guess I want to really point out here that I think this is the most important. Once you’ve got goals set, time based is of finite importance. Because I believe that most of my success and people – I mean look, I’ve just turned 30 and most people always say to me, “How is it you’ve achieved what you’ve achieved in such a small amount of time?” And the answer is, “Not only do I set myself goals, I hold myself accountable via time frames. And those time frames are short in a lot of cases. I set myself stretch goals and I book them miles ahead, but also I set myself small minute tasks, and every time I plan myself a goal, I say, “Ok I want to achieve this grandeur thing,” or, “I want to achieve this achievable thing in the period of the next three months. But here are all the little goals in the meantime that I need to achieve and I book those tasks in my calendar. Not when I’m going to do them, but when they are due.
Now there’s a lot of software out there that help you do project management and one of them is called www.asana.com. It’s a free software, that’ll help you project manage your goals and set yourself due dates. But it’s not even required in my view at the initial stages. If you’ve got Microsoft outlook or a calendar on your phone – I mean a lot of people have got iPhone’s or I believe Daniele, you’ve got an android phone. And you can set yourself lots of tasks, with times in them. And it pops up on my phone. “You were supposed to have had this task achieved and it’s due in one week.” All of a sudden, I’m now thinking, “Oh, I’ve got to get that done,” or, “It’s due in two days,” or, “It’s due in a months? time.” But by setting yourself time based goals, you start heading towards business success. Because it’s forcing you to create action. And time based goals, creating action is the most important thing in my view to business success. Because as we said, people say, “I’m one day going to get a website, I’m one day going to do this.” Without time based goals, it’s always going to be one day.
Dan: Yeah totally, it’s the thing that brings it all together isn’t it?
Matt: Definitely is, definitely is. Now, we’re getting on with this podcast now and we are going to try to keep all of these podcasts to around 25 to 35 minutes so that we know that people are busy and we know that people want to get that information and get running with it right away. So, Daniel take us through, for the people that are still listening with us, and for those people that are listening, we really appreciate it. Daniele, take us through the additional two letters, smarter goals.
Dan: Yes I will do. And if time permitting Matt, I’ll also give a quick example at the end of what happens when you don’t have a smart goal.
Dan: Now, the two letters I’d like to add Matt are an e and an r. Now the e is ethical. Because nothing in the traditional smart goal has really referred to the ethics of setting goals. And I think more and more we’re becoming a business society that understands that we’ve got social, environmental, ethical concerns and we really need to make sure that whatever our goals are, they’re in alignment with societies needs and the benefit of the community. And that’s something that’s never been addressed before, but I think it really needs to be woven into the fabric of our goal setting.
Matt: Definitely, definitely. I mean, I’ve seen a lot of businesses that are, I guess use manipulative tactics or that don’t have the society needs in mind and as a consequence their staff are constantly moving on and they have issues. I guess with government agencies perhaps or even legislative bodies. Just because they’re not ethical in their business trade and customers can see that as well. And it’s important that I guess they focus on making sure that it’s ethical, not just for their business prosperity but so that their values are aligned with their business as well.
Dan: Yeah. I totally believe that. And the last letter Matt is an r and r is for recordable. And here it’s very sad, but a lot of the businesses that do run into trouble, especially the SME’s, the smaller businesses. They just don’t record the outcomes of what they actually achieve against their budgets and their pre-chosen objectives. So they never end up doing a gap analysis, and they never end up looking at where they’re not meeting those objectives to make those number of minor or major adjustments to put them back online. So I think that’s equally critical.
Matt: Definitely. I know a lot of businesses do get lost and because they’re – you’re right, they’re not planning in the right way. So that’s definitely important Daniele. Dan: Yeah, and look, honestly I’m really keen to give you a very quick example here. People might think, “Oh well, we know the big businesses do this well, but the smaller ones may not.” Do not assume that. I worked for various large companies but one that I’ve personally worked for, now I won’t mention them, because it’s not about injuring anybody. But I remember some time ago, I was in sales at the time Matt, I was a territory manager. I was in charge of a large territory and I’m pleased to say that I was the number one ranked salesperson in the country with a growth of my product of 40% over the year before. Now, the problem was that even though the market was growing at 20% and I was growing at 40%, which is 200% what the market’s doing, which is why I was number one. The actual objective that year was to grow by 80% Now just take that on board for a minute. The market’s growing at 20, I was growing at 40, but the company wanted 80.
Dan: Now clearly, it was totally unrealistic and what it ended up doing was just devastating the morale of every salesperson in that team. So that’s just a simple example of what happens when even one of the five aren’t done properly, that the objective is essentially useless.
Matt: Look, definitely and I mean, this is definitely the same in a lot of big businesses and a lot of small businesses. Unless they set appropriate goals that fit with what they’re trying to achieve and I guess that are achievable for people, it’s just – they just don’t work. And look that’s a wonderful example Daniele so thank you for sharing that with us.
Dan: Yeah, it’s a – well it was a painful example, because that year I worked my heart out, got to the number one spot and basically achieved 50% of budget.
Matt: That’s horrible mate, that’s horrible. And look, I will make one point though and when you said that a lot of people say, “Well corporates do this really well.” You’re right and sometimes corporates can make mistakes, but the difference between corporate and small business is they spend time working out goals. They may be wrong sometimes, but at least they’re setting them. Where small businesses tend to be very busy in the day to day constantly trying to make money, they lose site of where they’re trying to go. Because they don’t set goals. So even, and I would say, even at the reluctance of successful goals for corporate, because they’re at least setting them, they’re causing action to move forward. And that is a big benefit to any business.
Dan: Yeah, that’s true certainly.
Matt: So, with that, we’ve been talking now for nearly 32 minutes, so I think we’ll wind this podcast up. But Daniel, thank you very much for your time today.
Dan: Always a pleasure Matt.
Matt: Now, on this podcast, and this is our first podcast. We’ll be offering some notes which could be links to some of the things that we’ve mentioned over this site. There wasn’t too many mentioned today. We mentioned a free project management tool and a website building tool. As I said, I’ve given you the web addresses, so feel free just to click on those links directly. But there’ll also be links available on our show notes at danandmatt.com. If you got to the, I believe at the moment it’s called the blog section, but it will probably become the podcast section very shortly. You’ll be able to find those links there as well so that you can get them exactly correct. But for today, thank you very much for sharing this 32 minutes with us. Thank you for lending us your ears and we’ll be with you with our next episode very shortly.