The Goal & The Gap: How to Actually Plan for 2023
Episode 692: Show Notes
We’re nearing the end of 2022 and auditing season is upon us! The time is ripe to start looking at how you want 2023 to pan out personally and operationally within your business. We want you to conquer the world, so today, we’re going to share some tips for setting yourself up for success in the new year. Although auditing might not sound sexy, it’s one of our favorite things to do. In this episode, we share some of the strategies we’ve used over the years to carry out an effective audit. You’ll learn how best to take stock of which areas need tweaking in order for you to reach your goals in 2023! Bear in mind that this doesn’t have to be your final iteration but making decisions in advance and working backwards from your goal is essential. Tune in to find out how to identify your financial goal and gap, find a plausible method to fill that gap, and reach your goals!
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Setting Financial Goals for 2023
We’re advocates for working backwards, but you can only work backwards if you know what you’re heading towards. The first thing we want to do is dispel a sense of urgency. You don’t need to be rushing toward any financial increase. You only need to adjust according to the cost-of-living changes in your area, but not necessarily beyond that. In the earlier stages of business, we support your goal to double. But when you start making $250k, your day-to-day will change drastically, and with all the unavoidable additions, your capacity decreases. Doubling year over year is unsustainable and failing to do so doesn’t make you any less legitimate a business owner.
The next thing to take into account when setting goals for 2023: focus on one financial goal, and remember, a goal is not an idea! A goal is tangible and achievable. When setting your financial goal, you need to consider what you need financially to achieve the lifestyle changes you want to make personally and the operational changes you want to make internally. Once you have your goal in place, you can work backwards and come up with a financial goal going into next year. To give you an idea of what to aim for, conservative growth beating inflation would be 10-12%, while strategic growth would look more like 15-20%. Anything above that will be intense.
Filling The Gap
Once you’ve identified your growth goal, you need to identify the gap. Calculate the difference between what you made this past year and what you want to make in 2023. Then examine your data and explore how the ramping up of specific areas will affect that gap. You don’t need to come up with a whole new product to fill the gap, you simply need to identify your area of greatest opportunity and pour your energy into that. It might be a matter of a simple pricing adjustment, but if you recognize it to be more than that, reflect on 2022 and calculate your leads and conversions, pitches versus procurements, and everything in between. Look at the strategies you did this year to see which ones you can refine and repeat to turn up the notch for next year (and which ones to eliminate).
What Not To Do
Rule number one: don’t jump to conclusions. Don’t just list your services in a spreadsheet and arbitrarily assign them a number so the total matches the gap you’re looking to fill. You need to consider timing, capacity, the number of discovery calls required to land that number of clients, and everything in between. In fact, for some of our clients, doubling the number of discovery calls could be massively destructive to their businesses. Each business is totally unique and you need to work backwards to fill your gap according to your specific data. There is so much cause and effect involved, and everything needs to be taken into account.
If you are considering adding a digital offer or one-to-many offer, go back and listen to episode 580: “The #1 Thing Service Providers Shouldn’t Do If They Want To Grow.” It’s important to keep in mind that oftentimes our ideas, although exciting, are literally our brains creating completely alternate realities in different businesses altogether. You might consider incorporating them into your existing business, but if you don’t have the pipeline to sell this new stuff, what are you going to do? On a good day, a digital offer only converts 1% of the traffic that it gets. We personally could not survive on a digital offer alone. Our business would go bankrupt! That being said, don’t compare yourselves to others but rather focus on your own data and lifestyle preferences.
To Summarize
Identify your financial goal and gap, then consider different scenarios according to your data. Once you’ve worked backwards, one option will feel “shiny” for you, and will seem plausible given your circumstances. If you find you don’t want to pursue the only plausible option to fill the gap, you’ll need to reassess your initial goal.
Quote This
You can only know how to work backwards if you know what you’re going towards.
Highlights
Setting Financial Goals for 2023. [0:08:17]
Filling The Gap. [0:15:59]
What Not To Do. [0:20:34]
To Summarize. [0:28:52]
Today’s Guest:
Abagail & Emylee
The Strategy Hour Podcast
We help overwhelmed and creative entrepreneurs break down their Oprah-sized dreams to create a functioning command center to tame the chaos of their business. Basically, we think you’re totally bomb diggity, we’re about to uplevel the shiz out of your business.
Key Topics:
Financial goals, Financial gaps, Audit season, Tweak and repeat, Financial planning, Strategy, Planning 2023, Business Planning, Business Growth
