In a previous article, I discussed how to win in business, using sport as an analogy.
In this article I want to take a closer look at defining the profit target that allows you to work out when you’ve won.
Of course you could just pull a number out of the air. How about £200K per year, so that’s £1 million in 5 years?
But why £1 million, other than the obvious reason that everyone wants to be a millionaire. Don’t they? Do they, really?
So here’s an alternative suggestion.
- Make a list of all the things you’d like to have, places you’d like to go, people you’d like to meet, things you’d like to do and see.
- Next, put them in a rough date order: 1, 2, 3, 5, 10 years. What things are you going to want to do in retirement? And what provision do you need to make for those retirement years: pension, carers, residential care and nursing?
- Of the things you’d like to do this year, how much disposable income do you need to have on top of what you’ve already got to enable you to do it? That’s your profit target for this year
- Of the things you’d like to do in 2-10 years and in retirement, work out how much disposable income you’ll need in years 2-10 and in retirement for all those goals to become a reality. Add on say 5% for every year out you go because today’s money won’t be worth as much in the future. In simple terms that’s your profit target for those subsequent years.
How much do you really want those things on the list? Will they inspire you every day to hit your profit target?
Even coming second in sport usually results in you scoring some points, rarely do you score nothing. And so it is in business. Setting your sights on the goal will result in you getting at least some of the way there.
OK. So that’s how to win the game. Now we need a scoring system for the game…