May 4, 2020 Comments Closed

Five Business Goals You Should Set and Track 

Posted by:CLIFTON WARREN onMay 4, 2020

Most businesses understand and appreciate the importance of goal setting and planning.

Unfortunately, many interpret this as little more than reviewing the previous year’s results and projecting forward into next year.

Everything has changed

While there’s appears to be light at the end of the tunnel, business for many won’t ever be quite the same.

Some of your clients may be gone for good. What you offered before may not be needed anymore. You might surpass your previous results, but still have declining profitability and little to no improvement in long-term value.

On the plus side, there will be big opportunities if you can see them and can take action.

You have a choice

You can either sit around and wait for business to get back to “normal” or you can start to plan and take action.

This may soon be the start of your new financial year; or the half-way mark. Either way now is the perfect time to update your, strategy, and goals.

Top performers understand that to produce superior growth results – and do it consistently – they need must implement of variety of tactics during the year.

As you establish and/or update your plans, here are five sales metrics you should set and closely monitor:

Productivity Goals

Revenue per employee — net revenues divided by the total number of FTE employees.

Compensation per employee — total compensation divided by the total number of FTE employees.

Spread per employee — total revenue per employee minus compensation per employee.

Stability Goals

Current ratio — current assets divided by current liabilities

Receivables/payables ratio — a lower ratio represents more timely collections of the amounts due from clients.

Aged receivables — measures the length of time that receivables are past the due date.

Profitability Goals

Pre-tax profit/loss — net revenues minus total expenses.

EBITDA — Earnings before interest, taxes, depreciation, and amortization.

Efficiency Goals

The percentage of time professionals spend on:

Training, and professional development

Soliciting new business

Servicing existing accounts

Revenue Goals

Renewal revenue: presented as a percentage of the prior year’s total revenues.

New Business revenue: presented as a percentage of the prior year’s total revenues.

Organic growth: total revenue growth from the previous year.

Using these metrics will equip you with valuable information, putting you in a much stronger position to formulate and execute the right strategies for the year ahead.

The best measure the right things and to see clearly what needs to be done in your business during the year to do it.

Do this and you will be well ahead of your competition, and on your way increasing the long-term value of your business.

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