WASHINGTON — Setting goals might seem basic to business success, but Hugh Norton, senior director of financial education at Visa Inc., sees too many business owners making critical mistakes that can sabotage their success before they even begin.

“When we make goals, we often make mistakes,” Norton explains during his recent Service Corps of Retired Executives (SCORE) webinar on building and growing small businesses. “And everybody makes these, whether it’s in your personal life or with your business.”

In Part 1 of this series, we explored the financial foundations every drycleaning operation needs. Today, we’ll examine how proper goal-setting and strategic planning can transform a business from reactive to proactive.

Norton believes in the power of SMART goals — those that are Specific, Measurable, Achievable, Relevant and Time-bound. For drycleaning businesses, this framework prevents holding vague aspirations that, ultimately, lead nowhere.

“‘Boy, this year, I’d really like to grow,’” Norton says as an unfocused goal statement. “Well, that’s not specific. It’s very general. Of course you want to grow. But having a specific goal — ‘I want to double my revenue, I want to triple my revenue, I want to increase it by 10%’ — is going to be important.”

The beauty of specific goals, Norton says, is that they can be adjusted.

“You can set a goal and say, ‘All right, I want to triple my revenue this year,’ and then you’re working toward it, and you realize it’s not possible. Great, adjust it. Not a big deal.”

Norton identifies several pitfalls that often derail business owners:

Too many goals — “You started setting goals,” Norton says, “and you ended up with 15 goals that are sort of all over the place.” He recommends focusing on five good, clear goals, rather than 20 peripheral ones.

Goals that aren’t written down — “You have a nebulous goal in the back of your head,” he says. “When you write things down, when you’re tracking it, it helps make it so much more clear what’s actually happening and what you’re actually achieving.”

Going too big without balance — While stretch goals outside of your comfort zone can be beneficial in making progress, Norton says that having only unrealistic targets can lead to feeling like you’re “failing at everything.”

Beyond setting goals, Norton encourages owners to understand their company’s position in the marketplace through product-market fit analysis.

“A good product-market fit is when customers want, and can afford, what you are selling,” he says. Part of this is putting together a proper pricing strategy, and this can vary dramatically by market.

“Maybe it’s a market where people want other people to know that they spent a premium on something,” Norton says. “And so, if your pricing is good and you’re including a good margin, it might still be too low. Somebody might look at it and say, ‘Gosh, that’s probably not very good because it’s not super-expensive.’”

The key is research. “Go out, do research and figure that out,” he says. “Research to understand your customers and your market, properly market and position the product, and then be willing to adjust it.”

Norton views business plans as essential communication tools, particularly for accessing capital. 

“One of the most practical reasons that you want to create a business plan is because this is what’s going to help you communicate what you’re trying to do,” he says, “so that when you want capital in order to achieve your goals, you’re going to have better access to it.”

A solid business plan should include:

• Executive summary — The big picture overview
• Business opportunity — What market needs you’re addressing
• Objectives — Your specific business goals
• Strategies — How you’ll achieve those objectives
• Financial projections — Realistic revenue and expense forecasts
• Vision, mission and values — Your company’s guiding principles

But Norton stresses that creating the plan is just the beginning: “I would schedule time to revisit, reevaluate, adjust and improve. You’re going to go back to it. You’re going to reevaluate it. You’re going to figure out what it needs and you’re going to improve it.”

One area where many businesses struggle is creating effective processes — standardized ways of handling everything from opening procedures to customer service protocols.

“Really, what you should be trying to do is design processes that can help your business work without you in it,” Norton says. This doesn’t mean removing yourself entirely, but rather creating systems that don’t require your constant presence.

“Sometimes the documentation is going to be for simple tasks, like how to open,” he says, “so you don’t have to be there at opening because you have taught somebody. And when somebody new comes on, you already have that process and you can explain it to them. It could be written down, or maybe you filmed it.”

Norton emphasizes that surrounding yourself with the right people — whether it’s employees, consultants or advisers — is crucial for success.

“Are you hiring the people you really want, who you can get along with?” he asks. “Are you hiring for the skills you want? Are you hiring for character? They need to fit not just with the skills that are necessary for the job, but fit with the mission and values of the company.”

This extends to finding mentors and advisers who understand your journey. 

“Those are going to be people in your industry, or maybe outside your industry,” Norton says, “but those who are doing something similar.”

Come back Thursday for our conclusion, when we’ll explore targeted marketing and creating the customer relationships that sustain long-term growth. For Part 1, click HERE.