How much money do you want in your bank account?
Author: Russell SmithAugust 7, 2012
If you’ve ever partaken in goal setting you would probably have come across SMART goals. SMART stands for Specific, Measurable, Achievable, Realistic and Time-frame.
(By the way, if you’ve ever wondered, as I had, the difference between achievable and realistic then try this….it is possible that I could win the Triathlon at Rio in 2016? It is achievable but is it realistic? Well, I would be 39, have never done a triathlon before and am not keen on cycling so it is probably not realistic, although it is achievable!)
Here’s a good goal to test out SMART goal setting. How much money do you want in your bank account?
Start with the reality principle – what’s the reality? How much have you got in your bank account now? How much will you have at the end of the month? What is the level of cash that you usually have in your bank account?
Now, how much do you want in your bank account. Pick the number, is it achievable? I’m sure it probably is. Is it realistic? How much time do you need to devote yourself to this goal? If it is not realistic, lower the amount. I’ve heard it said – there’s no unrealistic goals, just unrealistic timescales. Give yourself plenty of time to achieve the goal.
You’ve done the easy bit, setting the goal, now comes the harder part – how do you plan for it to come true. Remember, we’re talking about cash here. This is about how much you are going to physically have come into your bank account and how much expenses is going to go out. The expenses should be fairly easy to predict, the income less so.
Any cash goal like this will live and die by the level of sales and the level of collections. Therefore the cash goal starts with a sales goal. To be continued tomorrow…