How to Quickly Stress Test Your Interior Design Firm
I have seen it before. We go through a goal setting process and then move forward without continually checking to see if the goal is truly attainable and realistic. Maybe you have heard of SMART goals: specific, measurable, attainable, realistic and time bound. Today we are going to talk about stress testing our goals to check for attainable and realistic.
On the podcast and other blog posts we have spoken repeatedly about creating goals and metrics to measure to them. This has focused on the M in the SMART goal setting system, measurable. Another area we really need to dive into is the attainable and realistic parts. You may have heard it said before, just because it can be done does not mean it needs to be done.
Everything is a tradeoff. If we work more hours, we have less time for our personal life. If we reduce our markup percentage, we need to charge more for service or sell more products. Everything is a tradeoff of some type. And the question becomes, what are we willing to do to get what we want?
Don’t let this question throw you. It is not meant in a bad way – it is simply asking, what are the boundaries or thresholds that we have created to work within?
To begin, let's look at how we take a goal or set of goals and do a stress test.
Create a SMART goal.
Start with the goal you want to achieve. Write it down and make sure you have mentioned all 5 parts.
Specific: very clearly defined goal. Anyone should be able to read it and know exactly what you are trying to accomplish. No vague communication.
Measurable: The goal should have a metric attached. Some way to measure progress and goal completion is necessary. If you cannot measure it in some way, how do you know you have attained it?
Attainable: Can your goal even be done? Is it possible at all? If not, redefine the goal.
Realistic: What are the chances of this goal being able to be done? Yes, it is attainable, but are you sure you can do it? We want at least an 85% on realistic to be viable.
Time bound: When is the end date for this to be accomplished? Points to you if you also have progress goals with dates attached.
Define resources needed.
Now that you have a clearly defined goal, what are all the resources needed to accomplish this goal? Do you currently have them or do they need to be purchased or acquired? What will this take and are you able to get these resources by the dates necessary for the goal to be accomplished?
These are a lot of questions. I know! But hear me out, if we don’t ask the hard, tough questions early on, we will stumble later in putting the goal into practice. Stress out the goal early on. This is the part of the planning process where we take the goal and break it apart and really start looking at what it will take. This is the “how do I get it done” part.
When we are thinking about resources, one of the challenges is that we create a goal as if all the resources are already in place. Many times, they are not. You may need a skillset that your firm does not have, or money you have not yet earned or saved. If the plan does not allow for you to acquire these resources and make that part of the process, you will fall short when they are actually needed and not available.
Define what it will take to accomplish.
If we don’t have the resources above, how do we get them? Are our teams dedicated to the commitments necessary to accomplish the goals? Is there a time frame where we will lose steam and no longer be focused? What are we willing to do to make this work? What are we not willing to do? What is needed to manage this goal?
Now we continue to stress the idea of our goal. Being focused on a goal is one thing. Being focused on the same goal for a long time can wear on our nerves and our commitment. We must be focused on the commitment to do what it takes – and willing to actually do what it takes to get the outcome we desire.
It can be easy to lose steam as we go through the year. If we only make our plans working at full throttle, all day, every day – we are setting ourselves and our firms up for failure. Because no one can do that. Business has an ebb and flow. While you and your team work hard every day, you know that some days and weeks and months are much more productive than others.
We need to take our best days and our worst days into account when we are planning. Find the medium ground. Perhaps, use that to plan with some spurts for overachieving. If your average billable hours a week is 18, consider not building out your financial plan requiring you to work consistently at 24. Even though you can…you most likely won’t.
Do the math.
There is always a calculation of some type with each goal. This could be dollars and cents or time. We must look at the true cost to achieving what we want.
I have set goals before and realized that while I could attain the goal, the cost to my time away from other pursuits was not worth it to me. Or my health might be more important, and I would lose time working out or managing my diet as closely as I needed to.
Review your goals with everything in mind.
Remember, again, everything is a tradeoff. When we are well meaning in our yearly planning, we can create goals in isolation or as a best guess or best plan. The realistic part must take over here. It will be detrimental to only plan for the best. Consider the worst and then look somewhere in the middle for realistic. If you can plan this way, when you overachieve (which happens quite often) it will feel amazing.
Now, don’t think that I am telling you to set your goals low. I am not. You can still be aggressive and of course create your BHAG (big hairy audacious goal). But every goal cannot be a BHAG. If so, you and your entire team will be exhausted.
Let me tell you how I see this concept of stress testing work out in business and with my clients consistently. We make yearly financial plans and set goals. These goals, if not attached to budgets and monthly metrics are just a stab in the dark. We must make decisions that feed these goals. You have heard it said on this podcast, every choice leads you to profitability or away from it. The same holds true for any goal you set. You are moving towards them or away.
So, when I see these goals and maybe the markup on the product is low, it puts the burden on the business to charge more for labor and service. When we look at what that will take each week in billing with the staff available, we see that it cannot be accomplished. While another company may be able to make this work if their inputs of overhead or staff are different, it may not work for Company A.
All your goals must work together. They cannot be opposite or fighting for resources. If your team member (or you) has the equivalent of two 40-hour work weeks to get something done, everything won’t get done.
Stress test your goals. Pay close attention to the attainable and realistic portions of the goals. Look at multiple goals together to ensure you are not fighting against your own company and stressing everyone out – including yourself.
The ultimate goal is to do what we love and are called and equipped to do, while making a living to care for our families and the families of those we employ. If we do that and are exhausted, burn out our employees, and serve our clients terribly – something is wrong.
I invite you to listen to my masterclass that focuses on reclaiming your time, paying yourself more and growing your team intentionally. We have custom resources for interior designers at www.scarletthreadconsulting.com/aim-masterclass or under the resources tab. Learn to strategically manage your firm, beginning with your goals to attain what you are working for and scale your interior design firm for success. Create your goals thoughtfully, because profit doesn’t happen by accident.