Philip Walcoff - "The Fast Forward MBA in Business Planning for ...

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Philip Walcoff - "The Fast Forward MBA in Business Planning for Growth"Page 95tive. Stretch a little and allow yourself the room to really make this company of yours an exciting andrewarding place to be five years from now. In deciding the proper level of goal setting, it is worthwhileto reflect on the previously cited David Hudson Burnham and what he suggested about goal setting atthe turn of the century:Make no little plans, they have no magic to stir men's blood.In today's business world, which is reflective of participation by both genders, it's more appropriate tosay, "no magic to stir one's blood." The point is, don't set five-year goals that are too easily achievable;they won't "stir your blood."An example of stretching is in the setting of your five-year revenue goal. If you are currently a $2-million business, establishing a $3-million 5-year goal may be shooting too low. Considering inflation,this figure may not be large enough to instill excitement in you or your employees. Doubling in 5 years(approximately a 15 percent annual growth rate), resulting in a $4-million 5-year revenue goal, may bemore appropriate. Note the use of the term may be, because your market, resources, and your ownpersonal objectives need to become part of the equation.Revenue GoalsThe five-year revenue goal supports your mission statement's commitment to continued growth of thecompany. As an example, if you are a $5-million company today, setting a goal of $10 million in annualrevenue in 5 years might be appropriate. This doubling in 5 years represents an average annual growthof approximately 15 percent. A more conservative annual growth rate of 10 percent would result in 60percent growth ($8 million) in 5 years.Your five-year revenue goal reflects your annual revenues (or in some cases, annual sales) at the end ofthe fifth year from the fiscal year in which you are writing the plan. Forfile:///C|/Documents and Settings/gasanova/Local Setti...orward_MBA_in_Business_Planning_for_Growth/e-book.html (108 of 219)16.02.2005 13:54:23
Philip Walcoff - "The Fast Forward MBA in Business Planning for Growth"Page 96example, if you are writing this plan in your fiscal year 1999, the five-year goals should reflectperformance in your fiscal year 2003. An example of a five-year revenue goal is as follows:• Total annual revenues—$40 million by 2005By client area:Fortune 500 companiesFederal, state, and local governmentInternational$18 million$18 million$4 millionBy business area:Information systemsData management software productsSpecialized technology trainingConsulting (advisory services)$20 million$4 million$8 million$8 millionIn this example, the company provides computer system support services and products to its clients. Its5-year $40-million revenue goal is expressed in two different ways: (1) by client area—who they willbe selling to (large commercial companies, government organizations, and international companies andgovernments), and (2) by business area—what they will be selling (systems, products, training, andconsulting). In addition to what you are selling, business areas might be represented as operatingdivisions of the company, separate geographic entities, or different product or service elements.Defining Revenue Goals for Each Element of Your Businessfile:///C|/Documents and Settings/gasanova/Local Setti...orward_MBA_in_Business_Planning_for_Growth/e-book.html (109 of 219)16.02.2005 13:54:23
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Philip Walcoff - "The Fast Forward MBA in Business Planning for ...

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