Article Date: 1/1/2014

Financial Foundations
FINANCIAL MANAGEMENT
financial foundations

Set SMARTER Goals

Reach your financial objectives with a more focused approach.

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DAVID MILLS, O.D., M.B.A.

As we begin a new year, many of us contemplate personal and professional goals and objectives, and applying the SMARTER method will greatly increase your chances for success.

Peter Drucker is often credited with developing the SMART criteria, which is often expanded to the more useful “SMARTER” criteria.

Here, I explain how to use this guide when developing financial goals and objectives.

Specific

A goal should be stated in specific terms that are clear to all involved.

For example, rather than the goal that you want your practice to be more profitable, a specific objective is to increase your profitability by 3% during 2014 by decreasing your cost of goods sold by 5%.

Measurable

To help you from straying off track, state the objective in a way that you can measure your progress toward reaching the goal.

For example, if your cost of goods sold (COGS) percentage is slowly increasing, change your purchasing strategies to reach the final objective.

Attainable

It makes little sense to create objectives that might be considered meaningless. The goals you set must be realistically attainable.

Frustration will set in if you set a goal to decrease your COGS by 40% in six months. This goal is almost impossible to achieve without making dramatic changes in your practice.

Keep in mind: the goal shouldn’t be too easily attainable — a 1% change in COGS will have little or no effect on the profitability of your business.

Relevant

The goals we set goals are relevant when they are not in conflict and the timing is correct. For example, it might not be the time to set a goal of reducing frame inventory if you have recently expanded your frame display area by 200 square feet.

Time-bound

Without a target date, a loss of commitment to the objective often occurs. Set specific target dates of completion to help everyone involved develop a sense of urgency.

Increasing your profitability “someday” is not as likely to be accomplished as increasing your profitability in six months.

Evaluate and Reevaluate

This ensures the goals you set continue to meet all criteria. What may have been relevant in January might not be so in July.

Goals may need to be re-worded to account for factors that directly impact the ultimate success of reaching the goal. For example, one of your key employees or associates unexpectedly leaving the practice may have a direct impact on the chances of success in meeting the objectives you set months ago.

Don’t discard the goals — they may only need to be adjusted into more realistic terms.

A SMARTER future

Using the SMARTER criteria greatly enhances your chances of meeting or exceeding your expectations.

Next month, we will utilize the this method to develop attainable goals for your practice. OM

DR. MILLS PRACTICES AT OCEAN STATE EYE CARE IN WARWICK, R.I., AND HOLDS A M.B.A. FROM PROVIDENCE COLLEGE. E-MAIL HIM AT MILLSD@NECO.EDU, OR SEND COMMENTS TO OPTOMETRICMANAGEMENT@GMAIL.COM.



Optometric Management, Volume: 49 , Issue: January 2014, page(s): 58