How to Set the Right Business Goals to Scale Your MSP
Goals. We have meetings to discuss them, meetings to set them, meetings to track progress, meetings to evaluate them. Sometimes we even plan retreats and getaways to dedicate full days to looking at how they can drive our teams, initiatives, and planning.
In fact, every organizational management book stresses the importance of goal-setting. But, goals are worthless without understanding why they work and what you can achieve with them!
But, before you dive into the goals your business should be aiming for, it’s important to look at benefits any business can realize with the right goals. To start, organizational goals work to define the strategies needed throughout a company’s entire structure. Executives and management define and champion those strategies and goals themselves.
Then, team goals influence the processes employed within those teams. And finally, there are individual goals which help to define workdays and dictate areas of focus for individual employees. As you can see, there’s a structure to goals themselves, and team and individual goals should be working to see the realization of the larger business goals. Therefore, it’s important to plan accordingly.
- What are business goals?
- Why business goals are important
- Setting outcome and process goals
- Choosing between outcome and process goals
- Why business goals are important for MSPs
- How to choose the right goals to scale your MSP
- How to track your goals using BG's goals and dashboards
What Are Business Goals?
Simply put, business goals help establish the priorities for a business. Your organization should anticipate being able to meet your goals over a set period of time, and be careful to not set the bar too low, or choose something unattainable. In fact, it’s important to set S.M.A.R.T. goals (Specific, Measurable, Achievable, Relevant, Timely) even at an organizational level. These goals should be big enough that each team can see its role and can identify the goals they’ll need to reach to make the larger goal possible.
For example, your MSP may set a goal of $10,000 Net New MRR each month. In order to facilitate that, team goals should contribute as well. What would contributing goals look like across marketing, sales, and customer success teams?
As we all know, MRR doesn’t just steadily build. In fact, customers are often in flux and one occasionally slips through the cracks. Therefore, the customer success team goal might be to keep churn at five accounts or fewer each month.
For the sales team, they’d need to calculate how many new accounts they need to reach the goal. Let’s say they need 10 new accounts at $1,000 MRR each to reach the $10,000 Net New MRR goal. However, we also want to consider organizational alignment. In other words, if the customer success team has set a churn limit of five accounts, the sales team will need to close 15 new accounts to be on the "safe" side and mindful of potential churn.
At the same time, the marketing team would need to focus on the number of demo requests that must be driven to the sales team in order to close these 15 transactions. If sales closes 50% of the demos and upgrades sent their way, then for the sales team to close 15 new accounts, marketing must send them 30 demo requests.
No matter what your organizational goals are, once you’re able to get all of the moving parts within your business aligned and working towards the same big-picture target, you’ll find that your business will thrive!
Why Business Goals Are Important
There are a variety of reasons business goals are important. Not only do they provide direction for each team, but they allow everyone to plan. As in the example above, without the larger business goal, each of those teams could create goals that don’t support one another, or the larger business. However, there are other benefits as well.
Business Goals Help to Create Focus and Engagement
In order for almost any organization to reach lofty targets, there has to be laser-like focus at all levels. Goals help clarify that focus and define what you are truly after. In fact, by outlining both your process goals and outcome goals (we’ll cover these in detail later in this post), you’ll ensure that your company is headed in the right direction and focused on the steps that will get you to your desired results.
It’s also important to note here that goals provide task direction. During downtime when your team is looking for an action to take, task-oriented goals provide a blueprint for meaningful action. Across dozens or hundreds of employees, this targeted focus has a compound effect that drives organizations forward.
Further, given that each team and each individual has a role in achieving both team and business goals, they are more likely to be invested and engaged in the process.
Business Goals Help to Facilitate Accountability
Having goals in place is not enough to guarantee success. A certain level of accountability needs to be maintained to ensure that goals are being met and new goals are being created to replace them. That’s why you must have a cadence for checking in with individuals and teams — it’s a vital part of keeping the motivation flowing across your company. Let’s face it, we all perform at an increased level when we have people we respect holding us to a higher standard!
By encouraging accountability within your organization, your chances of success in completing small process goals and larger outcome goals are improved. Additionally, the accountability factor that’s tied to cadence is a two-way street: It highlights success and also sheds light on failures.
Setting Outcome and Process Goals
In most organizations, goals can be broken down into two categories — process goals and outcome goals. If you aren’t sure of the difference, here is an easy way to remember them:
- Outcome Goals - What you want to achieve
- Process Goals - The steps or actions you must take to help you attain the outcome goal
If you’ve read Traction or are familiar with EOS (Entrepreneurial Operating System) Worldwide, then think of your scorecard as your process goals. Your company priorities, or outcome goals, are what they refer to as rocks — these are must-have goals destined to get completed due to their importance. Rocks may be company-wide or individual goals. Their scope isn’t what defines them; their importance is.
For instance, let’s say you have a goal of obtaining 10 new paying clients in a given month. This is a perfect example of an outcome goal. However, landing those clients is outside of your control because whether or not you are able to sign those clients depends upon a myriad of other factors including competition, scheduling issues, and yes — even a bit of luck.
That isn’t to say that you shouldn’t set an outcome goal for yourself. They are, after all, the end desire you want to achieve. However, it’s better to set goals that aren’t dependent upon forces outside of your control. This is where process goals come into play.
Process goals are smaller, step-oriented goals that help you build toward your big picture aspirations. These are goals that are completely within your control and as a result, are actionable and clearly defined. Your goal post for success should be clear.
Using our previous example to sign 10 new clients in a month, your process goal might be to call 20 people per day from your prospect list. This smaller, action-oriented goal is the driving force behind landing those clients because if you’re able to hit your daily goal, then you’re actively pushing toward meeting your larger outcome goal for the month. If you’re not able to land those 10 new clients, you should go back and decide how to alter your process and what your new daily goal should be.
It’s important to remember that one type of goal isn’t better or more important than the other. Process goals and outcome goals work together. Stress the importance of pairing the two in order to instill commitment and focus among your teams.
Choosing Between Outcome and Process Goals
Having an understanding of when to use outcome or process goals is the critical first step toward actually achieving them.
Every company has an outcome goal in mind: It’s what they’re striving for. Once you have your outcome goal dialed in, start by breaking it down. What are the actual steps that will need to be taken in order for you to achieve that outcome goal? Don’t worry too much about complete accuracy at this point, as the process goals can be changed later when you have some data to work with.
Once you’ve broken down your outcome goal into all of the individual steps that you will need to take to achieve success, you can begin crafting and assigning those tasks to the appropriate teams and individuals that will complete them.
Using our previous example of closing 10 new clients, there are many tasks that you may need to tackle, in order to accomplish this outcome goal. Your process goals may include:
- Making sales calls to prospects
- Ensuring that your prospect database stays refreshed with new contacts
- Putting together proposals for interested prospects
- Researching and understanding their business
- Drafting a suitable contract for your partnership
Once you have outlined the processes required to reach your outcome goal, you can then break them down into more specific tasks. For example, “making sales calls to prospects” would become “make 25 sales calls to prospects each day.” This helps to draw a firm line between success and failure and provides a measurable goal for whoever ultimately is assigned the task.
How to Monitor and Manage Your Goals
Both process and outcome goals need to be tracked and evaluated weekly. Perhaps your initial goal of 25 sales calls per day turns out to be a little bit ambitious, and 15 turns out to be more reasonable. Or, maybe your sales team is capable of making more calls than originally expected. You could find that your entire outcome goal of signing 10 new clients that month is too lofty and needs to be altered.
Goals can be changed. The important thing is to make sure that you are constantly evaluating your efforts to reach them and tracking your success!
Why Business Goals Are Important for MSPs
Like any other business, MSPs need goals to help set a direction for the future and establish the best ways to facilitate growth. Further, goals shared across the organization ensure alignment and can improve productivity, moving the needle on KPIs. And, the right goals can help an MSP scale strategically, improving service options, boosting customer satisfaction, and allowing teams to identify appropriate market opportunities to aim for.
While many companies are eager to grow, and grow quickly, there are significant dangers to growing too fast. Any business, especially one that has a foundation in service, must grow at a steady pace because SLAs matter and meeting them impacts customer retention, relationships, and churn.
How to Choose the Right Goals to Scale Your MSP
No doubt you’re itching to grow if you’ve successfully gotten off the ground. The fact that the MSP industry is poised for significant growth likely means you want to capitalize on that too. However, growing too fast and for the sake of growth alone (without goals) could ultimately be disastrous. So, how do you choose the right goals to scale your MSP?
1. Start With Process Goals
No doubt the start of your business included a lot of trial and error, particularly in relation to the processes that move a lead to a customer, and a customer to a satisfied customer. However, it goes beyond that.
Before you start adding in more clients, you want to make sure that all parts of your business from administration and marketing to customer success and service have tested processes that will provide the stability you will need to grow.
2. Set Attainable Goals That Allow You to Scale
As noted elsewhere, while growth is the goal, explosive growth has the potential to overwhelm the services team and that could hurt service quality that enabled you to get there. The key to sustained and successful growth is scaling. Runners don’t go from a 5k to a marathon in a month, nor should your business.
3. Look At Ways to Grow Recurring Revenue
Successful MSPs have a majority of their revenue stemming from managed services rather than product sales or partnership programs. So, when setting outcome goals, consider MRR growth as a goal, and align your teams, as in the example at the start of this piece suggests. Getting all teams on board with an MRR outcome goal is one path to sustained and successful growth.
4. Assess Customer Distribution
In an ideal situation, you’ll have a good number of customers who are providing you revenue rather than a smaller number of existing clients who are contributing the lion’s share of your revenue. In looking for an area for growth, you may want to consider looking at how you balance this.
Successful MSPs have their revenue streams more evenly distributed. In fact, your strong business becomes significantly weaker if just one of those large customers goes elsewhere. In this case, you’ll want to choose an outcome goal that enables you to find the kind of clients that stabilize your revenue and business.
5. Assess Resource Utilization
Prior to setting any goals for growth, you need to know where you’ll need to scale and gauge what you can afford. That means you’ll need a complete and full understanding of how all of your resources are currently being used before you can assess whether you can afford, in terms of time and money, to grow a specific service or take on the clients you’re targeting.
Similarly, don’t add team members until you need them. Grow as you need rather than as you want.
6. Track Your Metrics
If MRR is the primary revenue stream for a growing MSP, then tracking metrics, especially those that relate to your SLAs and customer satisfaction, becomes crucial. Knowing where you stand in terms of a reliable revenue stream as well as in terms of service quality enables you to retain the customers who build reliable MRR. Additionally, those metrics will enable you to establish both the process and outcome goals you need to set to grow.
How to Track Your Goals Using BrightGauge's Goals and Dashboards
Speaking of assessing resource utilization, knowing how your team is spending time is vital to your growth goals. Therefore, any tool you can add to your arsenal to ensure your team is working efficiently and effectively is a boon to your business. And if that tool enables you to establish goals, track metrics, gauge progress, and share all of that information with the people who need it most, wouldn’t it seem like a wise investment?
BrightGauge’s solution offers all of those capabilities and more. By facilitating goal setting and then providing the tracking tools you need, you can keep your business, your teams, and your individual employees focused and aligned. If you’re ready to grow your MSP in a scalable and sustainable way, then you need the tools to facilitate that.
Get in touch with the BrightGauge team today to discuss how we can help!