Mon 8 Feb 2010
Trifocals: The Importance of Being Three Sighted
Posted by Amy Ford under Small Business, Tips for Startups, The StartUp Blog
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I recently attended an entrepreneurial lecture based on the book “Bootstrap to Billions: Proven Rules from Entrepreneurs who Built Great Companies from Scratch.” One of the panelists posed the idea of being three sighted in your planning process, using short, medium and long-range goals.
Long-range goals: We’ve started with long-range goals first because these articulate your company’s overarching objectives, which come directly from your strategic business plan. These goals span five or more years and provide direction for where your company is headed. After defining these goals, the short and medium-range goals are simply steps in meeting the long-range goals. An example would be starting your own consulting company by the age of 40 or retiring with a net worth of $1.5 million at the age of 64.
Medium-range goals: Your medium-range goals are typically set for two to four years and relate to factors that have the greatest variance over time, such as market size, trends, level of competition, etc. Some examples include introducing a new product, reaching a new market segment, and seeing an aggregate increase in profit of 7 percent.
Short-range goals: These goals tend to range from six weeks to 24 months and are specific actions or activities your company engages in to feed into the medium and long-range goals. They could be retail promotions, targeted advertising campaigns, short-term increased cash flows, etc. An example here would be a new advertising campaign for your product that runs for three weeks using four distribution channels looking to increase cash flows by 15 percent.
As you think about these three areas, remember that effective goals are SMART: Specific, Measurable, Accountable, Realistic, and Time sensitive.
