One of my businesses is down $400,000 in operating cash flow for the year.
Last year, I delegated too much. I put in place a good manager to lead the company. He did a great job managing our employees and I thought he could do a good job leading the company.
I was somewhat right. Employees are happy. Customers are happy. But, our sales and profits are suffering.
This isn’t an easy business. Changes due the pandemic first benefited us, now they’re hurting us. Our main product isn’t selling like before.
We have to innovate fast with our products and marketing.
Our initial goal is to get back to at least $200,000 per month in net profit. To achieve this, we need about $900,000 in monthly sales.
I’ve been in this situation before. Whenever we must achieve a goal, we can’t settle for barely meeting it – we need to far overshoot the goal.
Step 1: Add Up What You Think it Will Take
For any goal, add up what you think it will take to accomplish it.
In our case, we want to produce $900,000 per month in sales. I start by coming up with ideas to achieve the goal including new products and marketing campaigns. Then, I forecast what It think each can accomplish in monthly sales.
Step 2: Add 20-50% More
Next, I add additional activities to try to overshoot the goal by 20-50%.
In our case, I’ve been conservative in our estimates and added another two initiatives to exceed the goal by 30%.
Step 3: Expect Misses
The reason we overshoot is because there will be misses.
We are often overly optimistic in our assumptions for how easy goals are to accomplish. This is a good thing. If we weren’t, I don’t think we’d ever get started.
However, knowing we are likely overly optimistic, we need to aim to overshoot our goals. When we do, we’ll likely land right where we want to be, at our goal.
Step 4: Succeed Anyway
This same process can be used to accomplish any goal. I used it to gain 20 pounds of mostly muscle. I used it to grow a tiny e-commerce business to $40 million in sales.
Now, I am using it to turn around one of my companies.
You can use it to accomplish almost any goal you want. What do you want to improve?