If you haven’t already set your targets for next year, I am sure you will be thinking about setting them over the next week.

If not, you should be!

At The Growth Academy, everything we do for clients is underpinned by first properly identifying the objective, and secondly, discovering ways to reach and surpass the targets that they have been set. Without a target in place, a lot of time and effort can be wasted trying to achieve the wrong things!

How to Approach the Setting of Targets

Setting targets is one the most important parts of running a business, yet so many people are unsure of how to approach it.

1. What is the business trying to achieve? Is your aim for 2012 to grow, maintain your position in a declining market or down-size to secure profitability and sustainability?

2. What is your average cost of sale? You really need to know this. If your sales costs are 45K a year and you work on 10% margins, then the target needs to be a minimum of 500K. Otherwise even if you hit the target you are barely breaking even.

3. How big is your market and your average deal size? This may sound like logic but you would be amazed. If your average deal is 5K and there are only 40 potential clients in your area, your target cannot be above 200K. And even then, the chances of you selling to all 40 are minimal.

4. How often will you review progress against targets? This is a whole other blog, but accurate pipeline management is essential

5. What other factors are you going to take into account, other than the financial? It is important to keep your sales resource focused and motivated and there will be times when closing the deals become tough. Have more than just financial or revenue based targets in place.

Setting Achievable Objectives is Key

Finally, and most importantly for me, is to ensure that the target enables you to do the things you want to do. Never forget that there has to be a clear objective behind the target. Make sure that if you hit the target the resulting benefits help you to achieve your own personal aims.

I have met too many people who hit targets year after year but never achieve their ultimate goals.

Only you know what the “right” target should be, not the bank, or any other outside influence. Obviously seeking some guidance is beneficial but if there is one decision above all others the business owner should make, it is deciding what his or her targets should be.

2012 will be a great year for many, many businesses, and I am confident that the most successful ones will be ones that have set clear targets and achieved them.

Your Turn

Let me know how you approach the setting of your business objectives and targets. There is plenty of room for discussion on this topic and I’d love to hear your take. Jump in everyone, the conversations we’ve been having here lately have been exceptional and I expect this one to be no different.

I am happy to answer any questions you leave in the Comments box below, by email, Twitter or Facebook.

Other Posts You May Enjoy

• How to focus your sales: 8 key steps to closing deals before Xmas
• What business can learn from football and crowdfunding
• Do consultants appreciate their responsibility to small businesses?

These days, big business and big football clubs are getting themselves into a whole heap of do-do.

Some are on the verge of bankruptcy, some have been bailed out by the state, and some have even called in the receivers.

We may not shed a tear over their demise. But the problem with big constellations imploding is that they usually take down many smaller stars with them.

The supply chain for a club like Manchester City (£195m debt), or a business like Thomas Cook (£200m debt), consists of 1000s of smaller companies that are often well run, tightly managed and not burdened with extra-terrestrial levels of financial borrowing.

Football Business Leadership

The football industry is taking baby steps towards fiscal responsibility and showing leadership in financial controls.

In 2009 UEFA (European football’s governing body) introduced ‘Financial Fair Play’, a canny system to ensure the financial playing field is as fair as possible for football clubs. It is a way to restrict clubs from running up huge debts while trying to “buy” success on the pitch. As a result, clubs are allowed to lose just £38.5m in total over three years.

Financial Fair Play has received a lot of criticism but personally I can see the benefits to football as a whole. Anything that stops clubs coming under risk of financial ruin can only be a good thing.

If it is implemented properly there will be an undoubted period of extreme growth pains. But the clubs will come through it, resulting in the amounts invested becoming more focused on transfer fees, wages and youth development. This will certainly sharpen the minds of the clubs and the club owners.

Surely business can learn from this kind of principle?

After all, while Thomas Cook is allowed to get into £200million of debt, smaller competitors can’t get any lending at all. The smaller travel companies then end up suffering the tighter margins that ensue from the major travel company having immense buying power. Consequently, the smaller company can’t compete and either folds or struggles.

New Media, New Business Solutions

It’s not all doom and gloom for smaller companies. A viable business plan will still attract funding. It may cost more to access but it’s still there in principle.

What’s more, there’s a new kid in town that goes by the name of crowdfunding. Crowdfunding opens up completely new hemispheres of opportunity for start-up and growth-focused companies.

In fact, there is an air of gold rush growing among in the businesses community. This follows the recent success of the Rushmore Group raising £1 million in crowdfunding from Crowdcube. The investment, raised in only four weeks, sets a new record for the largest amount of money raised using a crowdfunding website.

Again,  football has led the way in crowdfunding. In 2008, Ebbsfleet United Football Club was bought by approximately 26,000 people each paying £35. The money was raised online through My Football Club and the club is now controlled and managed by the members (the crowd), even taking decisions regarding transfers and team selections.

As confidence grows in the use of crowdfunding as a sustainable tool for business growth, we can only look forward to a complete transformation in how companies do business as they begin to deploy customers as investors, advocates and brand ambassadors.

Over To You

Do you agree or disagree? All comments are most welcome and I’ll be happy to answer any queries on this piece or on crowdfunding in particular.

Don’t forget to ‘like me‘ (that just sounds so needy – they really need to change that!) on Facebook and ‘follow me‘ for up-to-date breakthroughs on Twitter.

You can also email me on craig.mckenna@thegrowthacademy.com or call me on my mobile: 07717 316 014

Other Articles You Will Like

• The Growth Academy Crowdfunding Site Now “Live”
• How To Focus Your Sales: 8 Key Steps to Closing Deals Before Christmas
• Do Consultants Really Appreciate Their Responsibility to Small Businesses?

But a phone-call on Monday really stuck in my mind.

One of my clients confidently told me he and his sales force had six deals on the table and they were looking forward to closing the deals before Christmas, ready to start delivery in the New Year.

It was all very positive-sounding but it is my role to challenge these things. Unfortunately, as it turned out, only two out of the six deals on the table are realistically going to close before Christmas.

This isn’t the end of the world at all. The other four will close early 2012 and at least he can get his sales force to plan effectively and either

1. look for more deals, or
2. allocate his resources differently.

But it could have been bad news.

Qualifying a prospect is probably one of the most important elements for you and your sales force, especially if you are a small business.

If you don’t qualify a prospect, you will waste time trying to sell to people who don’t have the right buying signals in place.

Focusing only on the right prospects will always give you a mental advantage. Why? Because you get in to the ‘win-win’ habit every time.

The 8 Key Steps to Closing Deals Before Christmas

The 8 key stages can easily be remembered with the term SCOTSMAN with each letter representing a stage.

(S) Solution - Have you clarified if your prospect understands what it is that you wish to sell them. What is your solution and why will it work for them?

(C) Competition – Are you aware of any other sales force competing with you to sell to your prospect or for the money they may use to buy from you? Your competition could be internal as well as external.

(O) Objective – Have you a clear understanding of what your client is looking for and why they are in the market? What is important to them now and in the future? Do you improve their services or processes, or do you save them money?

(T) Time scales – Have you clarified what time scale the prospect is working to? Can you deliver within that time scale? Does the time scale work for you? Is there a timing factor that could be used in your favour, for example a financial year end?

(S) Size – Is the potential size of the deal worth the effort needed to win the business? Have you a clear picture of the size of the deal? Is it smaller than ideal but could open doors? Is it too big and may have a detrimental impact on your business?

(M) Money – Does the prospect have the money in budget to pay for your solution? If they don’t have a budget, can they find the money or do you need to consider walking away?

(A) Authority – Are you speaking to the decision maker? The person who ultimately will sign the cheque? Are they even aware that you are speaking to their company? It is no longer imperative  to deal with just the decision maker, there is a value in dealing with another contact within the business but very few pieces of business are completed without the main authority signing off on it.

(N) Need – Does the prospect actually NEED your solution? Very few deals happen in the current climate without a clear need. There are many reasons why they may need your solution and it is key that you find out which one is relevant and focus on it.

Sales To-Do’s

If you can answer ‘Yes’ to all the questions about qualifying prospects, then your chances of closing deals are extremely high.

Very few deals will actually happen if one or more of these 8 key stages are missing, and the time you may waste on chasing shadows can never be taken back.

It can be very seductive to get sucked into thinking that every deal will happen. There is a sort of comfort in having a large pipeline that “could” close.

But I would encourage you to qualify properly and allow yourself to focus only the deals that have a chance.

You are always better off closing 3 out of 5 good prospects.  If you try to close 2 out of 10 prospects, your focus and resources will be stretched thin.

History of Crowdfunding

Scottish business starts ups are feeling the pinch in the credit-crunch years: forecasts are gloomy and financial spirits are low. But lo, what happens when the global markets take a dive? Entrepreneurs, new technology and great new ideas start bouncing around, gaining momentum and catching the public and financial imagination.

Crowdfunding is the new kid on the venture capital block, and it’s set to revolutionise the way businesses are born and businesses are grown.

It’s not a new idea as such. Crowdfunding’s roots lie in the old cooperatives where communities clubbed together to invest for the benefit of the community.

One of the earliest crowdfunding ventures was the Irish Loan Fund, set up by famous satirist, Jonathan Swift in the 1700s to provide loans to low-income families during the famine. Micro-finance evolved from this in the 1970s and has been rapidly adopted for social enterprises.

For example, Dr Mohammad Yunus was awarded the Nobel Peace Prize in 2006 for transforming a tiny project – giving $27 to 42 women – into the Grameen Bank: a bank that now has 8 million borrowers, with 97% of the money going to women-operated businesses.

Crowdfunding Platforms for Social Business

Over 55 business professionals attended the last one and the feedback has been brilliant.

“I was very impressed how that although there was a relaxed atmosphere there was enough structure to ensure it was a great night” – Hugo Balfour-Melville, Honister Partners

“It is rare that you see such a diverse attendee list and so many different personalities in one room, yet it worked really well.” – James Hanlon, MHD

“What an excellent panel, some great topics covered. I can’t wait for the next Business Mixer.” – Cat Cripps, Wildcat Solutions

The Business Mixers have proven to be rare events which attract investors, start-ups, University spin-outs, high growth companies, graduates, professional service companies and sme’s together, which creates a fabulous buzz and leads to some unique and great connections.

The format will be exactly as before; informal, social networking with top class business experts sitting on our panel and inviting questions from the floor. This is a great opportunity to spend some quality social time with all those faces you see at the other networking events as well as meet some interesting new faces.

The October event is at The Rutland Hotel on the Thursday 20th October from 530 until 8 and booking soon is strongly recommended as interest is high and we have already sold more than half of the available tickets! There are great concessions for anyone booking multiple tickets, so get together with your colleagues or bring your customers along with you! There have been a number of companies who have used the Business Mixer evenings as an opportunity to entertain their prospects or clients so the variety of attendees is rarely seen at a business event.

The panel for the 20th July will include Alasdair McGill, MD of Freelance World, an excellent accountant but now very much a successful entrepreneur building a great fast-growth accountancy business. Alasdair has a wide ranging and deep understanding of what makes a business work; Kevin Ashcroft, founder and MD of OCD Ltd, an IT support and infrastructure company based out of Glasgow. After leaving school with no qualifications and starting OCD at 20 Kevin has a great story and some invaluable business life lessons to share; Cameron Thomson is currently working with business leaders through Footdown but Cameron has extensive experience of working with companies seeking investment and finance and as a gatekeeper for the investors looking for companies worthy of their investment, this is area where we expect most of the questions for Cameron will be aimed; Gavin Oattes works alongside Alan Burton who was on the panel at the Summer Mixer and he is also a director of Tree of Knowledge, they both appeared on Dragons Den last year and although they didn’t secure funding they received fantastic feedback from the Dragons and their business has moved forward in brilliant style anyhow and there is undoubtedly a brilliant future ahead of them. Gavin is a top class presenter and trainer and although the company is on a high now he has a number of war stories and experiences that will make a valuable member of the panel.

Tickets are available from Imogene at The Rutland Hotel on imogene@therutlandhotel.com or on 0131 2219978 and cost £25 (£20 if you quote The Growth Academy) or you can get 3 for £60 (£50 if you quote The Growth Academy).

My team is Newcastle United, and has been since I attended Kevin Keegan’s first debut as as a player when I was 10 years old. It is an “interesting” time for Newcastle, when isn’t it to be fair? I am not a fan of Mike Ashley, the Newcastle owner, I think he lacks the style and decorum that a man of his standing should have but he is a successful business man and he is blatantly trying to run Newcastle United as a business and he has proven in the past that he knows how to run a business. The discussion of whether anyone would like Newcastle United ran like a Sports Direct outlet, with its stack em high and flog em fast approach is irrelevant. The discussion on whether he should have bought the club in the first place is irrelevant, as is the discussion on why such a successful business man could even consider buying a club without carrying out full due diligence is also now irrelevant. He is the current club owner and he has bought the right to do what he wants with the club. Over the past few years he has put money from his own pocket, a significant amount, into the club to cover instalments on transfer fees for players who were signed prior to him taking over the club and to cover a massive wage bill which he inherited. It is expected of him, as a business owner to cover any losses that the business he owns may make, yet when he then tries to introduce measures to prevent the club making a loss he takes stick!

The burning question is around the £35million received for Andy Carroll.

The fans want to know where it has gone? Assurances have been made on many occasions that the whole amount would be re-invested into the business/ club but there is a massive debate and a huge amount of scepticism whether it has been or ever will be. I am not a finance expert but I have had a close look at the information that is available and with some “educated” guesses I have tried to work out where it has or will be going. I am also going to try and keep this very simple and I am also well aware of the stick I will receive!

Mike Ashley’s right hand man, Derek Llambias has made it clear that the football club would be allocated a budget for playing staff each year and that the club were working to a five year plan. This is supported by Alan Pardew being brought in on a  five year deal, and the new players signed being given five year deals in the main. The practise of giving a division of a business (the team) a budget is completely normal practise and in the non-football business world it is an absolute necessity.

I have no idea what this budget is, but if I was to use the last available figures published the expected revenues into the club will be around £80million based on comparisons with other clubs in the Premier League. The aim of any club to stabilise has to be to keep the spend on the team, including wages and transfer fees below 60% of the turnover of the club on an annual basis. That would give Pardew an annual budget of £50mill to spend on wages and transfers and at the end of December 2010 the wages alone at Newcastle were £47million, which would have left him only £3 million to spend the following year.

This is where I need to try and keep it simple. When the £35 million came in to the club for Carroll, the management team will have had some decisions to make. It could be argued that there was already £3 million available, add the £35 million from the fee and then factor in the savings on not having to pay Carrolls wages (apparently £1.5 mill a year) it would have given Pardew £39.5 million to play with. If was to go out and sign 2 x £10 million pound players who would demand wages of £65,000 a week plus a £5 million player on £35,000 that would in effect have cost £34 million including wages just that season and would have blew the whole budget for the following few seasons without any further additions.

Since the club sold Andy Carroll, there have been various comings and goings and new contracts issued to key and promising players to secure their futures. My estimate shows that the wage bill will have gone from the £47mill to £51mill a year. Tiote, Ben Arfa, Williamson and Ferguson have all signed new deals and Cabaye, Ba and Marveaux have come in all of which will add to the wage bill. I appreciate that Carroll, Campbell, Nolan and others are now off the wage bill but a conservative estimate still shows an increase up to £51mill after all the recent activity.

If the annual team budget is around the £50 million mark and the wage bill is now running to £51 then it is entirely understandable why Pardew would be looking to use some of the £35mill to increase his annual budget over the remainder of the five years. I would hope and expect that when players like Alan Smith and Xisco are off the pay-roll that will release move room to move but until they are moved who knows? It is estimated that they are both on about £3.5 mill a year, so if they were moved on it would have a significant impact on the resources available to the club. There is also a huge debate why Newcastle haven’t tried to buy Charles N’Zogbia from Wigan, with a transfer fee of £9mill and a first year wage cost of £3.25 mill + agents fees to be paid it just isn’t good business for the club with the players already at the club such as Jonas, Ben Arfa, Ferguson and Marveaux who can all play his position!

I can see where the £35mill has is being “visibly” spent, I can also see why Newcastle fans won’t like the way its being spent, and why Newcastle fans won’t trust the men making the decisions, but personally I believe they are doing what is right for the club as a business and the rest of the clubs without mega rich owners will have to do the same at some stage.

None of this answers the question of why won’t Ashley spend any of his own money on the club? It definite questions the ambition that he has for the club but is there anyone out there that thinks that if Pardew had spent £35mill on transfers this summer then Newcastle would have been in the Champions League next year? If not, why risk the future of the club for a short term failure? Isn’t that what Freddie Shepherd tried and failed with?

The Business Mixer events have proven to be the only event where investors, start-ups, University spin-outs, high growth companies, graduates, professional service companies and sme’s all come together to create a fabulous buzz and make some great connections.

There will be only be 4 business mixers annually, two held at The Rutland Hotel in the West End of Edinburgh with the other two being held at Hawke and Hunter in the East End of Edinburgh, so the focus is very much on quality not quantity!

The format will be exactly as before; informal, social networking with top class business experts sitting on our panel and inviting questions from the floor. This is a great opportunity to spend some quality social time with all those faces you see at the other networking events as well as meet some interesting new faces.

The Summer event is at The Rutland Hotel on the Thursday 28th July and if you click here for the Business Mixer Flyer PDF you will see all the info needed. Booking soon is strongly recommended as interest is high! There are great concessions for anyone booking multiple tickets, so get together with your colleagues or bring your customers along with you to save some cash!

This is a great opportunity to spend some quality social time with all those faces you see at the other networking events as well as meet some interesting new faces. There have been a number of companies who have used the Business Mixer evenings as an opportunity to entertain their prospects or clients so the variety of attendees is rarely seen at a business event.

The panel for the 28th July will include Michelle Rodger of Tartan Cat, a business journalist and PR expert; Simon Campbell of Sandpit Ltd, travelling up from London to be with us on the evening Simon has had great success with a number of ventures and is now making huge strides in bringing the latest cutting edge SEO and Social Media tools to the market; Biju Krishnan, a highly successful entrepreneur who has developed a reputation as a very creative business builder with his private dentistry practise and is about to embark on a couple of very exciting opportunities; Alan Burton, a director of Tree of Knowledge, Alan and his co-director Gavin appeared on Dragons Den last year and although they didn’t secure funding they received fantastic feedback from the Dragons and their business has moved forward in brilliant style anyhow and there is undoubtedly a brilliant future ahead of them.

There will be three prizes awarded, each a prize will be a one hour Skype consult by The Growth Academy managing partner Craig McKenna. These can be used for consultation and advice on any topic linked to your growth. You would be welcome to give the prize to a client or associate if you didn’t think it was ideal for you.

In order to qualify for the competition all you need to do is Retweet this post is you are an existing follower or become a follower of craig_mckenna if you aren’t.

The competition closes at midnight this Friday (27th May) and the winners will be drawn over the weekend and announced next Monday (30th May) before 530.

There seem to be more and more consultants kicking about these days, as well as professional service companies who “claim” they add consultancy value within their offering. This isn’t a bad thing, after all I am a consultant. Although I try to deliver in a different way it would be hard for me to deny that I a consultant. Enough about me…

I have debated with some associates and clients over the past month or so where the duty of responsibility sits in a buyer/ supplier relationship and opinions always vary and the conversations have at times become a little heated.

It appears to be a very grey topic to most and there are many varying shades of grey but I see it very black and white when it is within a small business scenario and the small business is engaging a consultant/ professional.

I genuinely believe that the duty of responsibility in the small business scenario firmly sits with the consultant/ professional. Without being disrespectful the majority of micro/ small businesses use consultants because they just don’t know what they need to do. My clients come to me because they are not sales people, and they will go to accountants because they are not finance experts, they go to lawyers as they don’t understand the law. I am sure you get the picture.

The consultant/ professional is the perceived expert, they should assume the duty of responsibility and they should take that duty seriously. Far too often I have come across companies who have “invested” a significant amount of money in “experts” who were there to help their business, yet the money has been wasted. I have challenged some of these “experts” and they respond with such sound bites as “they didn’t tell me what they needed properly”, “well it isn’t my specialist sector”, “they needed more help than the budget allowed”. Pathetic.

If you are a consultant/ professional you need to be aware of the possible challenges that come from working with the smaller businesses. They come to you for help as they have no other route to help, they would prefer to find good quality help for free but there is none. They will find it hard to source the funds to pay your invoices, the project will require you to over deliver and they will trust your advice and guidance and they will follow it, if you are wrong they will not know until it is too late for them and you are long gone. If you can’t or won’t accept that, then steer clear and allow them to spend the little amount of funds that they do have somewhere they will see a return from and on someone who cares about what happens to them after you have taken your cash and moved on.

There a load of great people out there working in this space, and they know who they are. They will also know this is not aimed at them.

I suspect their will be fingers out there that potentially will point this blog right back at me, I sincerely think there won’t be and I sincerely apologise if there is!

Comments obviously welcomed…

The part that intrigued me though was the fact he has was an accountant by trade and that Sir Alan Sugar felt that he had tried too hard to not be an accountant, Sir Alan went on to state that Edward should never be ashamed to be an accountant!

Personally I don’t think he appeared to be ashamed of his profession but when I thought it about more it did look like he was trying very hard not to be the “stereo-typical accountant”.

This got me thinking, how many stereo-types do we have in business?

Photo-copier salesman wearing white socks? Lawyers being boring? Nurses being naughty? Footballers being flash? Models being dumb? All of these terms are both negative and inaccurate, very un-politically correct and inappropriate.

Is it any wonder that Edward tried very hard to avoid being badged as the “accountant” in the show? He wanted his other skills to be seen at the fore, but he obviously and blatantly over compensated.

I know a number of accountants who are striving to be viewed as “non-typical”. They are maintaining all the great stuff that comes with the historic view but adding to it to make a better all round experience for their clients. Freelance World, Finance Cornerstone, Gordon Rigby at 80/20, Number Crunchers, Martin Robertson Associates…..the list could go on for a long time. These are all guys who are superb at the day to day functions of an accountant but add so much more.

What is “your usual” accountant? Is the stereo-type close to the reality?

Elaine Clark of www.Cheapaccounting.co.uk writes ” The stereo-type accountant would be a bespectacled person, often male, sitting at a large desk in a leather chair counting! Dull in personality, never a laugh departs their lips. Driving everyone to distractions with their analysis of every cost they live a dull life, wear unstylish clothes and are devoid of personality.”

If that is close to the reality I can understand why Edward is as keen to distance himself from the accountancy world as they seem to be to distance themselves from him!

“But are the accountants that you know really like that? How many times have you uttered the words “you’re not a typical accountant are you?!”” continues Elaine.

She is right, that is a question asked more and more these days and by the looks of the way the accountants I know are heading there will be a new stereo-typical accountant soon enough and that is a badge that most accountants will be proud to wear.