Setting goals for the new financial year

The new financial year is a time to take stock and refresh your objectives. Here are some tactics to keep you on course to meet your goals.

Goal setting for a new financial year can be challenging. The best way to manage any curve balls is to make sure you have a solid plan for the next 12 months that focuses on achievable business aims without leaving you vulnerable to unexpected events.

Here are three principles to bear in mind when setting and working towards goals.

SWOT and SMART

Most managers are aware of the idea of the SWOT analysis. The plan is to identify Strengths, Weaknesses, Opportunities and Threats (SWOT). There is a lot to be said for understanding what you are good at, where you could improve, where the business can genuinely move forward and what could derail those plans.

When performing a SWOT analysis there’s no point trying to gloss over problems. They’ll only crop up further down the line and the results could be even more devastating than if you try to address them now.

If SWOT is about assessing the past, SMART is about building for the future. Creating SMART goals are about being Specific, Measurable, Achievable, Relevant and Timely.

There is nothing more than common sense in both of these tactics but they apply to businesses both startup and global. Setting SMART goals is about making sure you take an objective view of what is best for your fleet in the coming 12 months.

Get the CFO on board

Much of the friction, particularly in larger organisations, comes from budget allocation. The Chief Financial Officer (CFO) is under pressure from the board to drive efficiency, year in year out. Maximising the working capital is above all what makes the business look competitive and an attractive prospect to investors and shareholders.

There is a growing range of financial instruments managers can use to keep on top of costs. One such is the expenses management system, or EMS.

This is more than just receipts from the corner shop. An EMS is a dashboard that allows managers to see all their budgeting in one place including the terms of payment for various suppliers.

Increasingly too, corporate banks are encouraging their customers to use corporate credit cards for large purchases – in excess of tens of thousands. This is because invoicing terms are traditionally 30 or 60 days but by paying using a corporate credit card it is possible to extend this period, interest free, for a further 30 days at least. This increases the period the business has to recoup that expenditure (through selling its own goods or services) and therefore improves the working capital. Making for an altogether happier CFO.

Set KPIs

In this day and age we are lucky to be able to run our fleets using a number of sophisticated technologies and software. Much of the benefit of these technologies is sold to us on the basis that the results they give are so measurable.

This is great news – to a degree. The problem can be that the results the tech companies are keen to sell us aren’t necessarily the results we need to keep our business on track.

KPIs are Key Performance Indicators. They are the indicators of the performance of our business, not the technologies we use to run it. Losing sight of the real measures of success is easier in larger fleets than small operations. In the latter, the result of any action is so much closer to home. In companies with multiple moving parts, it can be harder to keep an eye on the ultimate goal.

As fleet managers we need to understand what the critical measures are that will tell us if we are hitting our targets for the coming financial year.

The final myth around KPIs is that any successful business has to measure against tens or hundreds of them. In reality just a handful of absolutely critical measurements should be enough.

Be agile

While it’s important to set a goal and not deviate from it, it’s also important how you get there.

We said at the start that, while a business can project its hopes for the next 12 months, there’s no guarantee the market will cooperate. This is why it’s important to allow your business to be agile in the way it tries to accomplish its goals.

Be open to new ideas and put in place a culture that allows for change. This could involve regular review meetings, contingency funds or building in capacity for employees to take time to explore other projects.

Make it clear that any deviation has to be supported by strong business arguments. Employees should understand how to use research to explore and validate new ideas; be able to put forward arguments in a business context and be able to project outcomes according to established business goals.