Tag: Setting

Rules to Setting Business Goals and Objectives: Why and How to be SMART

We all know that nothing runs without a plan, and a plan cannot run without having its objectives set.

That applies to any kind of plan, whether we’re talking business or personal finances, university degrees or NGO programs, website promotion or weight loss.

Setting objectives and milestones is of crucial importance for any planning activity and is the core of its success, or failure.

Knowing how to set objectives is not exactly rocket science in terms of complexity, but any strategist should know the basic rules of how to formulate and propose objectives. We will see in this article why objectives play such a major role within a company’s planning and strategic activities, how they influence all business processes, and we will review some guidelines of setting objectives.

The Importance of Setting Objectives

One might wonder why we need to establish objectives in the first place, why not let the company or a specific activity just run smoothly into the future and see where it gets. That would be the case only if we really do not care whether the activity in discussion will be successful or not: but then, to use a popular saying, “if something deserves to be performed, then it deserves to be performed well”. In other words, if we don’t care for the results, we should not proceed with the action at all.

Setting objectives before taking any action is the only right thing to do, for several reasons:

– it gives a target to aim to, therefore all actions and efforts will be focused on attaining the objective instead of being inefficiently used;

– gives participants a sense of direction, a glimpse of where they’re going to;

– motivates the leaders and their teams, since it is quite the custom of establishing some sort of reward once the team successfully completed a project;

– offers the support in evaluating the success of an action or project.

The 5 Rules of Setting Objectives: Be SMART!

I am sure most managers and leaders know what SMART stands for, well, at least when it comes of establishing objectives. However, I have seen some of them who cannot fully explain the five characteristics of a good-established objective – things are somehow blurry and confused in their minds. Since they can’t explain in details what SMART objectives really are, it is highly doubtful that they will always be able to formulate such objectives.

It is still unclear from where the confusion comes: perhaps there are too many sources of information, each of them with a slightly different approach upon what a SMART objective really is; or perhaps most people only briefly “heard” about it and they never get to reach the substance behind the packaging.

Either way, let us try to uncover the meaning of the SMART acronym and see how we can formulate efficient objectives.

SMART illustrates the 5 characteristics of an efficient objective; it stands for Specific – Measurable – Attainable – Relevant – Timely.

1. Be SPECIFIC!

When it comes of business planning, “specific” illustrates a situation that is easily identified and understood. It is usually linked to some mathematical determinant that imprints a specific character to a given action: most common determinants are numbers, ratios and fractions, percentages, frequencies. In this case, being “specific” means being “precise”.

Example: when you tell your team “I need this report in several copies”, you did not provide the team with a specific instruction. It is unclear what the determinant “several” means: for some it can be three, for some can be a hundred. A much better instruction would sound like “I need this report in 5 copies” – your team will know exactly what you expect and will have less chances to fail in delivering the desired result.

2. Be MEASURABLE!

When we say that an objective, a goal, must be measurable, we mean there is a stringent need to have the possibility to measure, to track the action(s) associated with the given objective.

We must set up a distinct system or establish clear procedures of how the actions will be monitored, measured and recorded. If an objective and the actions pertaining to it cannot be quantified, it is most likely that the objective is wrongly formulated and we should reconsider it.

Example: “our business must grow” is an obscure, non-measurable objective. What exactly should we measure in order to find out if the objective was met? But if we change it to “our business must grow in sales volume with 20%”, we’ve got one measurable objective: the measure being the percentage sales rise from present moment to the given moment in the future. We can calculate this very easy, based on the recorded sales figures.

3. Be ATTAINABLE!

Some use the term “achievable” instead of “attainable”, which you will see it is merely a synonym and we should not get stuck in analyzing which one is correct. Both are.

It is understood that each leader will want his company / unit to give outstanding performances; this is the spirit of competition and such thinking is much needed. However, when setting objectives, one should deeply analyze first the factors determining the success or failure of these objectives. Think of your team, of your capacities, of motivation: are they sufficient in order for the objectives to be met? Do you have the means and capabilities to achieve them?

Think it through and be honest and realistic to yourself: are you really capable of attaining the goals you’ve set or are you most likely headed to disappointment? Always set objectives that have a fair chance to be met: of course, they don’t need to be “easily” attained, you’re entitled to set difficult ones as long as they’re realistic and not futile.

Example: you own a newborn movers company and you set the objective of “becoming no. 1 movers within the state”. The problem is you only have 3 trucks available, while all your competitors have 10 and up. Your goal is not attainable; try instead a more realistic one, such as “reaching the Top 5 fastest growing movers company in the state”.

4. Be RELEVANT!

This notion is a little more difficult to be perceived in its full meaning; therefore we will start explaining it by using an example in the first place.

Imagine yourself going to the IT department and telling them they need to increase the profit to revenue ratio by 5%. They will probably look at you in astonishment and mumble something undistinguished about managers and the way they mess up with people’s minds.

Can you tell what is wrong with the objective above? Of course! The IT department has no idea what you were talking about and there’s nothing they can do about it – their job is to develop and maintain your computerized infrastructure, not to understand your economic speech. What you can do it setting an objective that the IT department can have an impact upon, and which will eventually lead to the increase you wanted in the first place. What about asking them to reduce expenditures for hardware and software by 10% monthly and be more cautious with the consumables within their department by not exceeding the allocated budget? They will surely understand what they need to do because the objective is relevant for their group.

Therefore, the quality of an objective to be “relevant” refers to setting appropriate objectives for a given individual or team: you need to think if they can truly do something about it or is it irrelevant for the job they perform.

5. Be TIMELY!

No much to discuss about this aspect, since it is probably the easiest to be understood and applied.

Any usable and performable objective must have a clear timeframe of when it should start and/or when it should end. Without having a timeframe specified, it is practically impossible to say if the objective is met or not.

For example, if you just say “we need to raise profit by 500000 units”, you will never be able to tell if the objective was achieved or not, one can always say “well, we’ll do it next year”. Instead, if you say “we need to raise profit by 500000 units within 6 months from now”, anyone can see in 6 months if the goal was attained or not. Without a clear, distinct timeframe, no objective is any good.

Improved Time Management Includes Setting Three Priorities

Everyone is looking for ways to improve time management. Whether it is the management of an organization looking for business improvement or an individual looking for ways to better spend their time, time management is important to both. Better time management can be achieved if goals have been set and then all future work is prioritized based on how it moves the individual or organization towards meeting the goals.

Many time management priority methods exist. The most popular ones are the A, B, C method and number ranking according to order in which tasks should be done. Both methods encourage looking at things that move one closer to meeting important goals as the highest priority to set. Things not related to goals would be lower priority. Here is a description at the three priorities and how they relate to general time management practices.

  • High priority items (rank A or 1) are those tasks, projects, and appointments that yield the greatest results in accomplishing individual or organizational goals. For individuals, this could be related to goals of career advancement or small business growth and ties directly to promises made to customers or co-workers, or it could be unrelated to the job such as more family or leisure time goals and promises. For organizations, this would likely be related to increased profits, new business, key projects, and other strategic business items. High priority items should be the first work planned for each day and blocked into a time that falls within the individual’s peak performance period.
  • Medium priority items (rank B or 2) are those standard daily, weekly, or monthly tasks, projects, and appointments that are part of the work that must be done in order to maintain the status quo. For individuals, this would relate to getting their standard work done, and might mean going to scheduled family or outside group activities as expected. For organizations, this is every day business items like project meetings, cost reduction, as well as regular administrative, sales, and manufacturing work. Medium priority work is scheduled after or between high priority functions, because this work does not require high levels of concentration, it can be done during non-peak periods as long as it is completed on schedule.
  • Low priority items (rank C or 3) are those tasks, projects, and potential appointments that are nice-to-do, can be put off until another time, and will not directly affect goals or standard work practices. For individuals, this might mean learning a new skill or starting a new hobby that may seem like good ideas but are not directly related to most desirable personal goals. For organizations, this could be purging old files or evaluating existing work processes that currently run smoothly enough.

It does not matter if time management priority methods like A, B, C, numbering, or simply marking high, medium, low using a personalized coding or coloring method. It only matters that the practice has no more than three priorities used in moving closer to meeting important goals. More than three priority levels can bog the time manager in the process of prioritizing rather than doing valuable work.

Whether organization management or an individual looking for ways to better utilize their time, time management is important to both. Anyone looking for ways to improve time management, will benefit from establishing and following a priority setting method for completing work towards accomplishing goals.

7 Simple Steps For Setting Up A Successful Business

There are basic things one must know before setting up any business in the world- in Africa, America, Asia, Europe and Middle East. These are indispensable facts and truths that must be followed religiously or as Doctor’s prescriptions. Any neglect in any of them lead to failure or many never allows you to start up any biz. These simple steps are outlined as follows:

1. Identify The Needs. Every business provides solution to the needs of their customers. These solutions could be in provision of goods and services. Everyone under the Sun has one need or the other and is looking for solution. And as you identify the needs and provide the solution, you will be rewarded in cash most times, thus you are already in business.

2. Identify Your Passion. There many needs around us, but sometimes difficult to identify. To do this therefore, ask yourself these following questions, what do I love doing? What is your hobby? Singing, baking, serving, teaching, etc. whatever you love doing without stress or much supervision, or much planning is your hobby. There are people that want to enjoy for money, so give it to them and make some money.

3. Training. Training involves learning to know what you love to do more effectively and efficiently using the latest technologies and methods. Training brings out the best in you and sometimes identifies your passion and the needs around you. It is the acquisition of knowledge and wisdom is the right application of knowledge. So training makes you wise. How much training do you have? Get trained today to enjoy tomorrow, scarify your time and money today to earn more tomorrow. Get more training today in whatever field of your endeavor… or neglect it and regret tomorrow. Technologies are changing and improving daily- improve alongside through training. Are you computer literate? Do know that money than half of the world’s money is made via the internet/computer. Ignorant is terrible, get trained today.

4. Capital. This is one of the greatest factors that determine the setting up of any business. Most business could not take off due to lack of it, or could not expand and continue due to inadequacy, and sometimes its surplus leads to lack of proper planning and mismanagement. There are various ways to raise capital to start business listed below: i. Personal savings. ii. Savings and cooperative scheme. iii. Daily contribution and savings scheme (Isusu or Akawo). Iv. Family and friends contributions. V. Loans from banks. Vi. Partnership.

5. Location of the business. The type of biz you want to start will determine its location. The factors that determine its location is but not limited: Nearness to raw materials, Nearness market/customers. A farm biz will not be located at the center of the town but in the village where there are plenty farm land. While an internet/computer biz will be located in the center of the town with internet facilities.

6. Socialization. Every business grows as a result of the product/services and the customers. A business transaction is complete when it gets to the final consumer. Training makes you an expert while socialization links you to your potential customers. Make friends always, have a functional phone line (24/7), an active email account (free), connect to face book and twitter (free), let many know what you do, use bulk sms to advertise your products and services.

7. Honesty and Integrity. Skill and training takes you to the top while honesty and integrity keeps you at the top. One thing is to start a business; another thing is to keep that business. Deliver what you promised on time, never short change anybody. Bad news spreads faster than good news, so be careful and courteous with your customers. Maintain a high level of integrity and be sure to make it. See you at the TOP.

Setting Up a Textile Business: A Success Story

22 years ago, when Joseph Rotich resigned as an Information Technology manager, who would have thought that he would one day own a multi-million textile company in Eldoret, Kenya. “Square Deals Uniforms Limited”, the company that has grown over the years to such a level that it can now compete with the top entrepreneurs of the region, is estimated to be worth Sh30 million.

Leader’s vision is one of the most essential qualities that could be attributed for a success in business and entrepreneurship. If there is a sentence that could sum up Rotich’s vision, it is this one of his quotes:

“We have to monitor each other and change the quality of the product to suit customers’ needs otherwise you will be left behind if you don’t adapt in business.”

When an entrepreneur starts talking about setting up a business, the first question he is asked, is: “Where did you get the inspiration to start this business?” Let’s read further and learn the answer to “what was the inspiration behind Rotich’s endeavor?”

Following back the chain of events that led to the formation of the leading industry–known for its designs and supplies of finished uniforms to schools, factories and hospitals as per the order–to the dream that began in 1970s, Rotich got the idea of textile industry from his father who was running a flourishing tailoring business those days.

While reading about his success for the first time, at this point I was wondering why things aren’t adding up? How could a man with the dream to start a textile industry, suddenly change his mind and move on to pursue a career in IT. Rotich puts it this way: “Though I had yearned for tailoring, I decided to take up an IT course but in my mind I knew I would come and start a textile industry.”

In 1981, he got employed at Revatex as an IT manager, after serving the company for five years, he started his own boutique. With a will to strengthen her husband’s small business, his wife, who was a textile tailoring lecturer at a university, resigned from her job and joined him soon after. Rotich explains it as: “Since she was an expert in tailoring, she considered strengthening the business and she had to resign to assist me. The pay for lecturers by that time was also little.”

In 1989, Kenya Industrial Estate funded the expansion of industry and facilitated the purchase of more machines. The industry that started as a boutique with 20 sewing machines, now has more than 50 sewing machines, with over 70 employees. Rotich proudly states: “I started with a small network of clientele as per their order but, now my sales volume has increased even reaching customers in Nairobi.”

According to Rotich, perseverance and passion are the key qualities of a successful entrepreneur. He wants people to learn from his experience if they want to make a significant contribution toward driving Kenya to prosperity and success.

If there’s anything else other than the spirit and attitude of an entrepreneur that could be held responsible for his success, it’s the potential that particular business/industry holds. Textile business is very profitable as there are a lot of options to explore and exploit to one’s benefit. Rotich’s success story tells us that starting a textile business requires careful preparations and proficiency of relevant knowledge and skills. If you are seriously thinking about it, you need to decide how much investment you could make, you need to look for a feasible location and make yourself aware of the prevailing competition in that particular region. Following paragraphs are going to pour some more light on some of the things that need to be considered before you set up your own textile business.

Looking for a feasible location involves looking for a place that has got enough space for the required machinery and labor and making sure that the location being chosen satisfies the ventilation requirements of the textile industry. Without ventilation, toxic materials involved in the processing of fiber and dust from the fibers may cause pollution and may damage the health of workers. For storage of textile rolls, storage space is required, you should make sure whether the place has enough storage space. While you make deal with the owners of that location, don’t forget to ask them about the lease terms they can offer and that what utilities are covered in the same deal.

If you want to generate big income and huge profit, start at a location with less competition. Seek the advice from other business owners with the experience of working in the same industry. While you do that, make sure that you seek the guidance of entrepreneurs and competitors outside your region.

While investing for the equipment, look for the suppliers that offer good price as well as reliability. Make sure that they offer solid warranties and are capable enough to supply troubleshooting and maintenance facility in case of equipment failure or break down. In order to prevent a situation where you run out of all the budget, plan beforehand and while you do that, take into account all the equipment maintenance costs, operating costs for at least one year, labor cost, and etc.

No business is free of risks, so is the case of textile business. While Rotich’s success story presents textile business as a profitable venture, it may prove to be a very bad experience for someone who is unaware of the risks involved. Starting a business with not enough funds to invest is like digging your grave with your own hands. One of the options that may be considered in such circumstances is that of franchising; it allows you to work under the security and stability of a known brand and have exclusive right to sell the product and make good income in very short period of time. In the same way, you can compete with other entrepreneurs from the platform of the established brand.

Setting Up a Rice Milling Business in India

In India, rice is cultivated on a mass scale. Rice is one of its most important dietary staples and more than 65% of its human population relies on rice for its daily food requirement. The rice crop occupies more than 37% of the total crop area in India and accounts for almost 44% of all the food grains produced in the country.

An integral process of rice production is rice milling. And just like in any nation where rice is produced on a large scale, rice milling has been around for a very long time in India. The need for milling arises because paddy cannot be consumed in its raw form and requires suitable processing.

Owing to this huge global demand for rice, rice milling, today, is a fast-growing agro-business which you can successfully leverage for financial benefits. However, being a commercially profitable business, setting up a rice mill requires extensive knowledge and capital.

If you can manage to arrange the capital requirement, you must read further to learn how to set up a rice milling industry in India:

1. Decide the rice milling type: One pass, two step or commercial: The one pass process is one where husk and bran layers are removed in a single pass. The two step process does it separately; it requires traditional machinery and equipment and is mostly done for consumption within the local community. Commercial milling is an extensive process which requires the use of modern milling machinery. It is done mainly with a view to export the produce. Unlike the two processes mentioned above, it involves a number of processes:

  • Pre-cleaning
  • De-stoning
  • Removing husk
  • Husk aspiration
  • Paddy removal
  • Polishing
  • Whitening
  • Grading and separating
  • Blending
  • Mist polishing
  • Weighing and Bagging
  • Storing

2. Gain knowledge: learn from the experts: Before you plunge into rice milling business, it’s important for you to take a look at the environment and understand the important facts about rice milling industry in your area. Learn the pitfalls and challenges involved, have a feel of the different processes involved. Basically, learn as much as you can in the shortest time span.

3. Devise a business plan: A lot of factors are into play and you cannot enter this competitive industry without a detailed strategy. Since you’ve already acquired the basic know how, now you need to put everything into a plan. Clearly mention your business’s aims and objectives, p&l analysis, projected earnings, target market, staff requirement, competition, etc. All in all, keep a tab on everything required to get you up and running.

4. Obtain permits and licenses: To actualize the rice milling venture, you need to obtain certain licenses from the Government of India. You need to:

  • Register your business with Registrar of Companies
  • Registration with Udyog Aadhaar MSME
  • Factory license
  • Obtain Consent to Establish and Operate from Pollution Control Board
  • Obtain license as per Rice Milling Industry Act, 1958
  • VAT Registration

One must also comply with ESIC and PFA registration for the employees

If you wish to export, you also need to obtain Import-Export Code

5. Acquire land: Get your hands on a suitable location which is easily accessible.

6. Buy and Install equipment: Some of the machines in use today are:

  • Rice cleaner
  • Rice de-stoner
  • Rice Husker
  • Colour sorter
  • Paddy separator
  • Rice polisher and whitener
  • Rice grader
  • Dryer, etc.

Since it solely depends on your requirements and business scale, it’s best to consult a rice milling expert. They will also help you set up the machinery.

The final step in starting a rice milling business is acquiring the raw materials and starting with the production. Since it’s important to maintain production all through the year, it’s important that you receive guaranteed supplies. You can:

  • Start with your own rice farming
  • Buy from suppliers, i.e. farmers or farmer markets
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