“If you aim for nothing, you’ll hit it every time.” These wise words from the famous author, salesman and motivational speaker, Zig Ziglar, are precisely why we must set clear, specific goals. Nearly every plan, budget, and proposal start with goal setting and establishing focus. In business, the next recommendation is to make a profit. The rest of the plan then details the programs to achieve that end.
It seems simple enough, right? However, the process of setting goals is far more complicated and can facilitate the remainder of a planning process.
A key issue in developing business and personal goals are the parameters. Even in sports, where the general goal is winning, there are complexities. For example, the goal of minor leagues is more about preparing players for the majors than winning every game. And in little league, things like development, training, participation, and teamwork can be as important as winning.
Goals also operate within the context of other needs. What are the opportunity costs of other activities? What are the costs, investment requirements, and rewards of an effort? What are the social, legal, and environmental considerations? How important are issues like innovation, time, safety, culture, and the whole group in an effort?
Here are some recommendations to consider in developing goals:
Exploring and understanding profit can add dimension to your goal setting. There is more than one description of profit. Some include: long-term profit, short-term profit, cash, present value on investment, profit before or after depreciation, interest or other factors, and expected value discounted for risk. Understanding profit and investment requirements also differ for service, retail, manufacturing, technology and other types of companies.
To compare varying goals, let’s look at small business entrepreneurs and venture capital investors. The small business entrepreneur is mostly concerned with earning enough cash to pay bills and stay in business. (If you recall, 90% of small businesses go out of business within five years.) Venture capital firms are looking at multiple investments and expecting that enough will make significant profit in a few years to more than cover the unprofitable ones. Even the venture capital business has changed dramatically in the last few years. Initial investments are smaller and for shorter periods, profit expectations are more carefully reviewed, and growth expectations are more reasonable.
Measurement is a critical aspect of goal setting. What, when, how and criteria of how we evaluate an effort are critical in decision-making and goal setting. For example, we debate the potential and impact of a recession. However, there are several different ways to measure it such as length, type, impact, etc. Measurement can also be considered from an absolute or relative perspective. In little league, showing up is frequently considered excellence. Improvement from a weak team can also be considered excellence while winning a championship is expected from the best teams. So, knowing what your measurement parameters are is key. Consider cooking, for example. We know measurement is critical, but when a recipe calls for a pinch, dash, shake, and smidgen… what exactly does that mean? It seems like only grandmothers really get it right.
Don’t forget about bias. Bias is, perhaps, the biggest culprit in distorting the development of goals. For example, when evaluating performance, profit can reduce the importance of variables like quality, customer service, logistics, etc. Bias can also cause issues because many non-quantitative goals are more difficult to measure. For example, sports teams generally focus on winning rather than development, culture, or team concept, which may be more important. Look how many teams in various sports have failed by trying to hire super stars and ignoring other requirements for winning.
Timing and time parameters are crucial. Long-term versus short-term is the most frequent difference. However, periods of time are also important. For example, the stock market has been highly volatile in recent years. 2020 and 2021 saw significant gains, 2022 saw significant losses, and 2023 appears to be regaining much of those losses. Goals will vary depending on whether you need cash immediately, are saving for your retirement, investing for inheritance, or any number of other needs and the timeline they require.
Flexibility is key. Businesses are subject to more radical change and need to build adaptable mechanisms into their processes. As we face more uncertainty and instability, we need to focus on changing and simplifying processes to reduce the risks, and our goals must align accordingly. Strategies like pivoting and develop/test/measure/adapt need to be built into our organizations.Examine alternatives and change when necessary. Reevaluate a system that isn’t working and set new goals that will yield worthwhile measurements.
Human and cultural factors must also be considered. How important are excellence and change in our processes? How much innovation effort is in our programs? How complex or detailed are our goals? And keep in mind that customer, supplier, and employee satisfaction can dramatically affect results.
The debate of pursuing improved excellence versus change is affected by a number of issues. We need to understand how problems affected by goals versus tactics can require different solutions. The most frequent issue with change is insufficient support and operations. For example, excellence in quality, delivery, and customer service are even more important during periods of innovation. As change is inevitable, organizations simply need to understand their new environment and execute fundamental change.
Make goal setting a priority and communicate your goals to those involved. Be certain to understand the varying needs of different situations. Use clear and simple measurement tools, and be sure to utilize the process for improvement, rather than criticism. And remember, we set goals to make progress, and even if we don’t achieve what we set out to accomplish, we still end up further along than where we started. So, stay focused on your goals, make them work for you, measure your growth, and keep moving forward.
Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. We guide your plans for business success and unlock your profits.Our strategy includes clear steps, and over 150 free articles and templates to facilitate your efforts and guide your process. We’re here to help you get on track and stay there as you move forward.We welcome comments, suggestions, and questions. You can write us at: bshlensky@startupconnection.net or call at 914-632-6977
It happens to all of us. Suddenly we have more aches than normal, less energy, and our memory isn’t what it used to be… Getting older comes with both opportunities and challenges. And, if you’re in the aging population, you’re definitely not alone…
In fact, there are currently 55.8 million Americans who are 65 and older (up from 39.6 million in 2009). And this population is projected to reach 80.8 million by 2040 and 94.7 million by 2060. All but a tiny percentage of them live in non-institutional settings.
Since 1900, the percentage of Americans age 65 and older nearly quadrupled (from 4.1% in 1900 to 16% in 2019), and the number increased more than 17 times (from 3.1 million to 54.1 million). The older population itself has also become increasingly older. For example, there are almost 7 million people over 86 and the segment will continue to grow.
In the U.S., there are 73 million baby boomers between 60 and 80 years who have had a primary impact on our culture. And they have about $140 trillion in wealth that will be passed on in the next decade or so. While much of it belongs to the top 1%, it will still impact many lives.
Despite the size of this population, it seems they are frequently overlooked in many instances. Whether you fall into this category yourself, have a relative who does, or are just wondering how knowing more about this topic can create new opportunities for you or your business, there are a number of issues to consider.
For instance, one of the challenges of getting older is balancing the opportunities to live a full life with the demand of managing the needs brought on by aging. Some specific examples are as follows:
In the future, retirement will be increasingly dynamic. Older people will likely have different part-time gigs and find other ways to stay happy and engaged. For example, leisure and entertainment among the elderly will increase.
Many important aspects of old age are overlooked by Americans, such as transportation, increased health needs, social life, and small tasks that may be difficult or impossible. Older people are also more frequently targeted and vulnerable to scams.
The aging population is dramatically impacting our culture. Politicians, religious leaders, business leaders, etc. are all getting older. Thus, change, energy, and growth can all become more challenging. For example, approximately 47.5 million people worldwide have dementia—a number that is predicted to nearly triple by 2050. Our tools and willingness to identify and treat dementia are generally inadequate.
Getting older does not mean the end to fun, excitement, or other normal aspects of life. Physical touch, hugging, and even intimate relationships should not be discouraged. For example, an aid in a retirement home entered a room where a couple were enjoying a relationship. He left and asked his supervisor what should he do. The supervisor answered, “Be quiet, shut the door, and leave them alone.”
Goals for older people are evolving. On one hand many elderlies are living fuller lives and entering retirement homes later. On the other hand, for those whose health issues are more prominent, the shortage in remote care, home care, and social workers complicates matters.
Maintaining a healthy lifestyle can dramatically improve health, the aging process, and help us all live full lives. This includes exercise, not smoking, moderate drinking, improving diet, maintaining relationships, and avoiding stress.
A lot of planning, expenses, and decisions go into caring for an elderly family member. There is a tremendous need for both family and professional caregivers, especially when there are major health concerns. This may require a customized approach such as balancing healthcare decisions, care plan adherence, and medications. General tasks associated with the day-to-day care of a loved one can be stressful and expensive.
So, how does all of this impact you? Do you see any opportunities where you can make improvements personally or to your business?
The fact is we need to place more focus on how the 65+ population impacts our society, systems, and economy. In general, more management, awareness, and programs are required. As this population continues to grow, and because we’ll all eventually be a part of it, we should be properly equipped to deal with aging ourselves and knowledgeable on how this group thinks, acts, evolves, and affects our systems.
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. For more information, please visit our website: https://www.startupconnection.net/
Have you ever met someone and, after they introduced themselves, you forgot their name within seconds? Why does this happen? Why does so much information go in one ear and out the other? Are we at capacity and simply cannot retain any more data? Or are we too distracted thinking about what we’ve going to say next? Why are we not listening to each other?
Listening is key for communication and building positive relationships—both personally and professionally. When we improve listening, we improve our interpersonal connections and our collaboration skills.
When it comes to getting others to listen to you, think about how you are presenting the information and how you want it to be received. Consider factors like timing, delivery, and environment. When, where, and how are you telling someone something? In general, the audience, whether on the Internet or in person, forms perceptions of a presentation in the first 90 seconds—that gives you a small window to capture their attention and make a good impression. Environmental issues can be the most ignored factor in communication. For example, if you’re giving a presentation in a room that’s too hot or has a lot of distractions, your audience is less likely to retain what you say.
Additionally, when we engage others genuinely, they are naturally more inclined to pay attention. Too often we underestimate the power of a smile, a kind word, an honest compliment, or the smallest act of caring. The most effective tool to enhance listening that I use is the “out of the box” approach of “FOOD WORKS.” Fruit and penny candy are truly unheralded aids in making a great presentation.
Here are some specific suggestions to help improve our own listening as well as get others to effectively listen to us:
Have a clear focus especially with regard to goals. Time frame, perceptions, quantity versus quality, topic, and especially the sharing of goals can critically affect listening. Providing an outline is helpful so people can see what will be covered and can easily follow along.
Don’t ignore bias. Whether we admit it or not, we all have biases. And it’s a huge problem when it comes to listening. Analysists love to discuss mathematical formulas and measurement in affecting bias; however, most bias (especially in small businesses) is simply human. For example, our most recent experience, preferences, and desires can have a significant impact on what we hear.
Be willing to hear both sides. It’s important (and frequently imperative) to take risks in order to expand, grow, and adapt. By listening to the real benefits and potential consequences of actions, you may be willing to take more chances. Additionally, this will help you make more informed decisions overall.
Don’t assume people know what you’re talking about. For example, common business terms like Gross Profit, EBITA, Clicks, Conversions, Fixed Costs, and Investment may not be understood by some of the audience.
Be clear and concise. Simplify wherever possible and focus on factors that really affect your presentation. The audience will lose interest if the presentation is too long, complex, or poorly communicated.
Be the expert. If you’re not confident in what you’re saying, you’re more likely to communicate it wrongly or ineffectively. Make sure you know what you’re talking about.
Prioritize openness. Does the listener trust what is being said? And does it cover relevant issues? When we share information openly, we establish a sense of trust.
Actively look for ways to improve. Discuss challenges and opportunities. For example, if miscommunications are happening, find the source of the problem. Is it coming from the presenting side or the listening side? You can then implement supportive strategies.
Understand the audience and diversity. Demographics are affected by age, location, socioeconomic status, race, gender, etc. Current events have certainly affected trends for many minority groups. Staying up-to-date on your target audience, the issues they face, and their habits will help improve your awareness and communication.
Listening should always be a priority. Understanding the purpose, content, and importance of communication can help you improve outcomes. You should also consider your own listening process. The next time you catch yourself asking someone to repeat their name or find yourself zoning out during a presentation, ask yourself why? Figure out where the communication failed and learn from it. Maybe the speaker wasn’t being clear or maybe you’re someone who needs to take notes or repeat a name out loud in order to retain it. The more you understand your own communication strengths and weaknesses, the better equipped you’ll be to listen and be heard.
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. For more information, please visit our website: www.StartupConnection.net.
Have you ever assessed your decision making process? What are the factors you take into consideration? Too often, we neglect parameters and this is a mistake. Parameters must be included in our decision making in order to improve results.
What do I mean by this? Well, understanding risk, rewards, and the importance of various issues can help guide your decision. This includes both analytical and social issues. The realities and changes in parameters like populations, the economy, political environment, and social values should all be reviewed and considered regularly. The most important thing to keep in mind is that many variables are changing faster and more often than ever before. So, not only do you need to understand parameters, you need to keep up with the latest ones!
And while that may sound daunting, it’s the way it’s always been—change is inevitable and we must embrace it. So, don’t allow fear, uncertainty, or tradition to prevent you from trying something new.
For example, here are three different well-known approaches to decision-making. Which one are you and is it working for you?
Nike’s advice: JUST DO IT!
Steve Jobs: “Because the people who are crazy enough to think they can change the world are the ones who do.”
Traditional ideology: “We have always done it that way.
Now, here are some considerations to help improve our understanding of parameters and inform how we approach decision making to get better results:
Not making a decision is a decision. If you see the right choice and fail to act on it, that’s a mistake. For example, lots of people think about quitting their jobs, but few actually do. Similarly, we talk a lot about things like health, weight loss, reducing stress, saving money, and being more supportive, but seldom do we take action.
We assume cause and effect when the relationship can be spurious. One of the oldest questions on cause and effect is the proverbial chicken and egg issue. Statistics and other details make it very easy to assume that a relationship among factors is a straight line. However, most relationships involve a variety of factors, as shown in the chart below:
Analytics can produce better results, but intuition, risk, and low probabilities can be effective. We all know the lottery is a bad bet, but some people do win. Similarly, many billionaires like Gates, Bezos, and Jobs have achieved fame by pursuing high risk and out of the box alternatives. It is the outliers that create much of the innovation, excitement, and change in our society.
Forecasting parameters can improve decision making and identify great alternatives. What are you forecasting and how will it affect your actions? For example, the pandemic has altered time perspectives in developing and analyzing forecasts. 2019, 2020, 2021, 2022, and 2023 all have different parameters and need to be considered as such.
The biggest problem with parameters can be bias. Most bias, especially in small businesses, is simply human. Your assumptions, analysis, and data can all unknowingly affect assumptions. Analysis of different age groups like millennials and baby boomers can vary simply by using different starting and ending birth years.
One crucial aspect of parameters is risk and outcome, which are greatly affected by probability and information. Predicting results where there are significant and consistent historical data can be fairly simple; however, predicting results for new programs or with little or inconsistent data requires developing educated estimates.
Beware of confirmation bias. Don’t we want to believe that our ideas are terrific, and thus, focus more on their potential for success? Of course, we do. The challenges associated with the ideas are sometimes given a smaller amount of our attention; it’s just human nature. We bias our analysis towards successes and tend to ignore negatives. One business that has benefited greatly from this concept is the casino business.
Organizations need to be open to measurement and feedback. Observing, understanding, and sharing financials, operations reports, and sales reports are the first step. A management style such as “walking around” and checking in with employees can be priceless.
At the end of the day, you can improve assumptions, results, effort, and process by simply knowing your parameters and understanding the use of analytics and intuition in your decision processes. As the saying goes, “A chain is only as strong as its weakest link.” Make sure to figure out where your weak links are as well as your strengths.
Contact us for a FREE evaluation and get an alternative perspective on your business. We’d love to help you identify ways to adapt to current trends. No one has time for BS—so we’ll cut straight to the point and answer any questions you have. Reach us at:
Dr. Bert Shlensky, President of StartupConnection.net, has an MBA and PhD from the Sloan School of Management at M.I.T. He served as the President of WestPoint Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. More than 2,000 clients have benefitted from his business acumen over the course of his long career. He now focuses on working with select startups and small businesses. Please visit our website: StartupConnection.net for more information.
Establishing the value of your business investments can be difficult. While well-known valuation methods can give you a rough idea, ultimately your business is only worth what someone is prepared to pay for it.
In 2001, there were over 1,000 public offerings. Few flourished and several lost much of their value or went out of business. The culprit seems to have been excessive forecasts and losses in addition to a decline in the economy and tech forecasts. Greed among many of the participants, including prominent venture capital and investment banking firms, was also a significant factor. As a result, there were few new issues in 2022 and they are only now starting up again in 2023.
In contrast, there are over 1 million new small business startups since the pandemic. While many have achieved their goals, a significant number of them never really became significant or will exit the market within 5 years. These are mostly individual or small entrepreneurial efforts with expectations of less than a few hundred thousand dollars in volume. Their goal is to provide income, growth, and a better lifestyle for the entrepreneur.
These differences illustrate the need to understand goals and parameters when analyzing the value of your business or stock. For example, retirees building a nest egg for their heirs have quite different perspectives from families who need their wealth to fund their own retirement. Additionally, much of our country’s wealth is concentrated in 5-10% of our population. Thus, in 2002, much of the tech stock decline had minimal impact on wealthy individuals while affecting the income of retirees with investments of less than $100,000.
A critical and frequently overlooked factor in evaluating investments is risk. Investors seem to be willing to take higher risks in order to get higher returns. Much of the debacle with the 2001 new issues was due to funding extreme forecasts with high risks. Venture capital firms do mitigate some of the risk by funding many deals and only needing a few successes. In contrast, most individuals are more risk averse, especially people planning retirement.
Tools and criteria to evaluate businesses greatly affect valuations as well. Long-term versus short-term, fixed versus variable streams of income, risk, growth versus income, and earnings can all affect perspectives. Just consider the variations in value between your home, a fixed pension, and tech stocks.
Special features like skilled employees, intellectual property or other special strengths of your business can increase investment value. A few years ago, “tech” was almost holy as an investment. Basic industries like autos, housing, retail, and utilities may have significant fluctuation as they are experiencing little long-term growth. In contrast, A.I. and electric cars seem to be the major hot industries today.
There are several standard techniques that can be used to provide a benchmark to determine the value of your business investments. Using different valuation methods can help you come up with a range of valuations for your business. Values are also affected by social, economic, and psychological environments. For example, values of sports teams have experienced unimaginable growth because of the desires and wealth of many billionaires.
Measures like P.E., present value and discounted cash flow are generally considered the standard for evaluating investments. One of the advantages is they can be analyzed to consider factors like annualized returns in order to compare investments. For example, growth companies will expect higher P.E.’s than stable companies.
Profits and cash are critical factors in evaluation particularly for small entrepreneurial companies. These measures need to be mitigated by benefits, taxes, and investments not apparent in cash benefits. For example, a significant advantage of many tech companies is the minimal investment aside from people and marketing. Thus buildings, factories, equipment etc. are not required. Even manufacturing is frequently contracted out to reduce investment and provide cheaper sourcing. Many public companies have also modified disbursements to owners. In particular, stock buy backs rather than dividends allow more flexibility and tax benefits.
The value of assets and liabilities in your investment is a critical factor in your valuation. These values can be significantly different from book value and need to be considered Real Estate valuations, and the ability to borrow money at reasonable interest rates is a critical consideration.
Startup or entry costs are also significant aspects of valuation. The valuation includes the costs of purchasing assets, developing products or services, recruiting and training staff, and building up a customer base. For example, a pharmaceutical company might want to choose between buying a biotechnology business and investing more in its own research and development operations.
Different industries also have their own rules of thumb that can be used to calculate a value of your business. For example, many retail businesses are valued as a multiple of turnover. Other common valuation methods are based on the number of customers, clicks, or the number of outlets. Industry rules of thumb like these are often used in sectors were buying and selling of businesses is common.
In summary, valuing your business and investments involves a number of considerations. What are your goals, constraints, risk levels, and alternatives? Plan ahead – the more time you have, the easier it will be to show your business in the best possible light. Sort out systems – strong management information and operating systems give the purchaser confidence that there won’t be any unpleasant surprises. Structure the transaction to maximize the price, process, and requirements. Consider issues like taxes, timing, and operations that can have an impact.
Dr. Bert Shlensky, president of Startup Connection, prides himself on his ability to define what is unique about each and every business. He works closely with individuals to develop a personalized approach that targets specific areas of concern and offers solutions based on his 40+ years of experience. His team of experts will address your particular needs while working to save you time and money.
When you want to stand out, reach out to Bert for the tools that will build your “sticky” brand. My focus is on understanding and analyzing your dilemmas and challenges, so your company becomes profitable faster.
Call (914) 632-6977 or email me at bshlensky@startupconnection.net. Don’t leave without signing up for our useful free eBook!
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