Category Archives: Major projects

Day 2 – Strategies

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Business Strategies vs Goals. Why You Need Both!

Strategy Defined

What is a strategy?  How does it compare with or relate to a Goal?  Which comes first, a goal or a strategy?  Can you run a business without a strategy?  Without Goals?  Is this post about an academic issue that only applies to Apple and Boeing?

On day one I laid out the basics of goal setting.  It is a pretty big deal to really sit down and figure out what matters to you personally, and what your major goals are for you, your family, and your business.  Some folks are afraid to do this.  Some just can’t seem to find the time.  Some seem to feel that goal setting is not important.  I make the claim that goal setting is the most important thing you will ever do to effect the success of your enterprise.

In case you have set your goals, what next.  I know that for me, there is a tendency to immediately go into action.  But going off half-cocked will undermine much of the benefit of having set goals in the first place.  Do I mean by this, that if you set goals, but don’t follow through with strategy and tactics, then don’t bother to set the goals in the first place?  Not even close!  Goals are the most important, then strategy, then tactics.

Back to the original question:  What is a strategy?  A strategy is the meat on the bones of the goals.  It is the how of the what.  Each goal should be taken individually from the top priority to the least.  How can the company most effectively use the resources available to it to accomplish the goals.  If the goal is to achieve an increase of 20% in sales, how will the company do that.  Possibilities could include a larger territory, new products, increased prices, more sales units or dollars per invoice, more dollars per client per year, more expensive products, more sales people, etc.

An evaluation of the choices should result in realistic approaches.  If there isn’t much money to spend, then it might be better to increase prices, or to work harder to increase the average ticket, neither of which requires any expense.  However, it is important to also measure the likelihood of success of each strategy as you determine which to follow.

At this point you might have a sheet of paper or a spreadsheet with a set of goals, and each of those goals has a list of strategies under it.  You might also include a dollar amount that can be invested in each.

Let’s use one of my clients, a New York City School offering Acting Classes as an example. The example is fictional even though the company is real.
We will assume that enrollments are steady, and income and expenses are good, with the owner able to pay himself well. But the owner has set a goal of increasing total sales by 20% in 2015. He also wants this to result in a 20% increase in take home pay.
The goal is now in place. What will the strategy be to accomplish the goal. There are numerous possible ways to achieve the goal:
  • Raise prices – Obvious concern as to whether sales might drop
  • Increase class size – What will cost of acquisition be for additional students. Benefit is that if classroom will accommodate more and if teacher can handle more, there is no incremental cost.
  • Add more acting classes – Same issue regarding cost of acquisition. Might be additional cost to rent more studio time and or teacher time.
  • Sell materials or services to current and past students – no idea if the materials will sell, but cost to produce is low, therefore low risk. Selling services has no risk.
Can you come up with other possibilities?
Hopefully you can see that this process is anything but academic.  If you think it is, tell me in the comments.

Buying a Home

Kitchen remodel in Dallas

The purchase of a home may be the biggest goal you will ever set

No matter what stage of life you find yourself, your first home purchase or your next home purchase is very likely on your mind. Fully 68% of the population lives in a home they own. Very few live in a home that they inherited or paid for with cash they had just laying around. The vast majority of home owners had to carefully plan for every aspect of the purchase from finding a down payment to making the mortgage.

Setting goals and planning for a major project

  1.  Get all players on the same page. You don’t want to get 500 miles down the road just to find out your spouse had a completely different destination in mind. New home? Custom? Remodel? Tear down? How many bedrooms? Neighborhood? Etc.
  2. Research to determine if the dream you arrive at is realistic. What does a custom home in Dallas cost in the neighborhood you care about? Call a mortgage broker and find out what the payments will be and what the down payment and other costs to move in will be.
  3. Once you know all the major costs and resources necessary, set a realistic time table to achieve the goal. Get all players to agree to the all aspects of the plan.
  4. Break the plan into components and have various team members work on the things they are best qualified to further research or execute. Have regular meetings designed to report on progress so nobody feels left out or surprised at any point.

When we purchased our last home, my wife looked for the house, I worked on the finances.  She checkout out furniture, drapes, and appliances. I looked into movers.

When we remodeled our kitchen and added a sun room, I did most of the research on the options available, while my wife provided the details of what she wanted the final product to look like. We both sat in on all meetings with potential  contractors.

What would you add to my suggested approach?  What successes have you had using a different approach?