One of the projects I have been working on extensively towards the end of 2019 was, helping two shareholders of an SME reconcile their very different objectives with their business. I entered this process to provide the guidance both needed to find a mutually acceptable way to progress. It was apparent to me that both parties already had a clear picture on what their goals were, both short and long term which made the job easier. In my experience that isn’t the case as often as you may believe.

One of my roles is helping business owners plan for the future, setting their goals, helping them achieve them, but I often have to start with establishing some idea of an end goal which we can work back from. Without an end goal, it’s almost impossible plan properly a future for the business and the owner that works for both. In this article I discuss goals and end goals. What they may look like and what the differences are, As usual I try to bring in some examples from my experiences.

Are goals fixed?

No. Not over longer periods. Not from the perspective of a business owner. The first thing I’ve noticed as I’ve been consulting for years is they change over time. A thirty something business owner will likely have a different end goal than a fifty something for example. Age brings experience and life changes such as children, maybe grand children, perhaps other businesses and therefore changes in priorities.  I make two points here. The first, Don’t think at any one point your goal will remain the same for life. It won’t. You change, your life changes, your business changes. So will your goal as a result. My second point is in the majority of cases your business goals will be impacted by your personal life. Unexpected personal circumstances  will either create, or sometimes force changes to your business goals. The birth of a child is an obvious one. It may change your working hours, motivation and financial position. As you get old you see more mortality unfortunately. This often changes peoples perspectives on what is important.

Supporting SME owners with these changes as they occur, and planning for them, should be in the business consultants ‘skills locker.’

Goals and End Goals

Let’s look at a couple of examples of common goals and then differentiate them to an end goal.

Goals are often financially driven. “I want my business to turnover £X” or “I want to make £Y” (Profit). Simple and easy to measure. But I don’t deem that an end goal. It’s a stepping stone on the way to an end goal, or a facilitator, but not the end goal itself.  I’ll discuss more below.

A slant on the above I have seen in the past would be a measurement of financial performance by a metric such as employee numbers. So revenue (or profit) per employee for example. This is sometimes useful if the owner is trying manage resources, and is careful with expenditure. Again though, while it’s useful (I’d argue alongside other measures) it’s not an end goal.

It’s also common in smaller businesses too see more ‘lifestyle goals’ such as “I would like to earn enough to be comfortable.” Whiles there are pros and cons to this sort of aspiration (I can hear the arguments against now) I actually like a lifestyle goal! It’s definitely not a measure commonly used by fast growth businesses there are arguments for lifestyle goals to be part of the business, and these arguments are gaining more traction every year in my opinion. However, it’s clearly not an end goal.

What’s the difference?

The first difference is in their state. Goals are temporary. Goals have an ‘after,’ they can have a ‘next goal.’ The end goal will be final in some way. It ends or significantly changes your relationship with your business. It’s the final step in moving away from your business, possibly to retire, to focus on another venture or to spend more time with loved ones. The end goal is planning for how that happens, when that happens, and what benefits it brings whatever it may look like. Another way to look at this are goals are the stepping stones towards an end goal.

Another difference is in value. To you. This is important. Not delivering on a goal, say missing your revenue target for a year, is a pain, a hinderance. It’s not pleasant, but it’s mainly temporary. There is an opportunity to correct or adjust in the following twelve months. If you miss your end goal, or don’t have the right pieces in place that can have a life changing impact.

One example I’ve seen in recent years, I was approached to consult with the owner of a manufacturing business with revenues of £3m. The business had a strong finances, an excellent client base, forward order book and cash in the bank. The owners (two) had exit on their mind, but fortunately in the future. My assessment was initially it would be a struggle to sell as a going concern for one reason. The owners were the business. They handled the key clients. They lead innovations in the manufacturing process. They drove the business goals directly. They managed the 40 or so staff directly, made all key decisions. If the owners exited the risks to the businesses on going success were significant. In my opinion so significant any offer would be conditional on a long retention post purchase, or a significant reduction in value. By putting a management team in place and delegating major tasks the ownership, would likely see the businesses valuation increase by hundreds of thousands of pounds. In this case this was the difference between retiring post sale in their forties, or having to continue working elsewhere if the business was sold. As I said, life changing.

Takeaways

  1. Don’t confuse goals and end goals. If you don’t have any ideas on what the end goal may be try to form one.
  2. Do not undervalue the end goal. It may seem like many years away, but getting your business ready for your end goal can make an incredible difference and it can take years to get right.
  3. Remember as you gain age, experience and life evolves so will you. Try to build in some flexibility.

Useful Links

If you run a small or micro business and wander how this could apply to you get in touch or read this Working with Smaller Businesses – here

An article on change – here

Article on scaling up – here