Goal setting and time planning go hand in hand. I don’t believe you can effectively plan your time without goals. And, I don’t believe you’ll ever achieve your goals without effectively planning your time.
Since numbers are easier to work with than ideas, I’m going to demonstrate how time planning and goal setting work together to help you achieve your financial goals.
The same system can be applied to any other goal you can measure with numbers, but this is the easiest way to demonstrate it.
First of all, determine what your financial goal is going to be. If you want to earn $60,000 next year, you’ll need to know exactly what you have to do to get there. This can be done with a simple graph shown below.
Year Month Week Day
Financial Goal $60,000 $5,000 $1,200 $249
# of Sales 120 10 2.4 .5
# of Presentations 360 30 7.2 1.5
# of Contacts 1,800 150 36 7.5
In order for your small business to make $60,000, you’ll need to be on track with earning $5,000 each month. Assuming you take a two-week vacation, that breaks down to earning $1,200 per week. Earning that $1,200 each of the 50 weeks of the year will let you truly relax and enjoy your two-week vacation.
To see how that breaks down to what you must earn each day, let’s take 365 (days in a year) and subtract weekends. In our example, I’m assuming you work 5 days per week. That leaves 261 days per year for you to work. However, that’s not true in that you are likely to celebrate various holidays and, don’t forget your two-week vacation. So, let’s take away 10 holidays and 10 vacation days. So, now you have 241 days per year that you are out there face-to-face with potential clients. Dividing 241 into $60,000 shows us that you must earn $249 each day you work. Now, if you take longer vacations or personal days or sick time, you’ll have to rework your figures here to stay on track.
You know how much income you generate from each sale on average. Divide that amount into your $60,000 goal, then across the month, week and day columns. This shows you how many sales you need to make each day to earn that $60,000.
For example, if you earn $500 per sale, you would need to make 120 sales per year, which averages 10 sales per month, 2.4 sales per week or about half a sale per day. So, if you didn’t close a sale yesterday, you’d have to close one today to stay on track.
Next, we consider your closing ratio. Your closing ratio is determined by how many people you must present your product or service to before you get a closed sale. If you close one out of every 3 people, then your ratio is 1-to-3. So, if you must make 3 presentations to get one sale, how many do you need to reach your 120 annual sales goal? 360 presentations.
If it takes 5 contacts to make 1 presentation, you’ll need to contact 1,800 people this year to achieve your goal. That boils down to just about 7.5 people per day.
Now, as you plan your time to accommodate your goals, is it feasible for you to make 7.4 new contacts each working day? Probably not… so you have two choices:
1) you can lower your income goal, which doesn’t sound like much fun, or
2) you can improve your skills so your ratios are better and you don’t have to meet as many people to make the number of sales you desire.
Knowing what you must do each day to achieve your larger annual income goal helps you direct your time to what will really matter most in your small business.
This same system can be applied to saving or investing your financial resources for retirement; a special family vacation; or any goal that can be broken down mathematically. Once you get a handle on this system, you’ll find you can even apply it to your exercise routine and other aspects of your physical health. If the small steps are well taken, the journey will reach a successful end—the achievement of your goals.
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