A part of business planning, goals help you keep on the right track and give you additional motivation to continue working hard. While making profit is the ultimate goal for any business, achieving that requires strategic planning and setting specific workable milestones.
- Goals give direction for your business and help you make accurate everyday decisions.
- They are a practical motivator to continue your efforts even when you suffer setbacks.
- They help you plan for the future.
Short term objectives and long term goals
Both short-term and long-term goals are equally important. Long-term goals cover a period of 5 to 10 years while short-term goals can have monthly or quarterly milestones. Staying focussed is so much easier if you have short term goals to work towards. In essence, these short term goals form the stepping stones for your longer, more difficult goals.
Lacking goals to focus on often form the difference between success and failure for small business owners. In order to make your goals an action plan for desirable results and success, SMART goals are the key.
• Specific: Vague goals like ‘earn more profit’ or ‘win more business’ do nothing to add value or help towards achieving your targets. Instead, be specific: a percentage increase in profit, number of clients, or number of investors can be a specific goal.
• Measurable: Any goal should have a measurable outcome with numbers to help you keep track. Most financial goals can be measured against previous year’s figures for accurate understanding.
• Attainable: Unrealistic expectations and goals can easily end in disappointment and lack of further motivation. Statistics from professional organisations for your industry or your competitors’ growth figures can help keep your goals realistic and attainable.
• Relevant: Your goals should consider the current market climate and conditions. For example, a high revenue growth might not be feasible during a recession, or when you are entering a market with a large number of competitors.
• Timely: Every goal should be time-based. Breaking down a yearly goal into monthly or quarterly increments makes it appear more attainable and gives you a sense of achievement when you reach it.
Tips for effective goal setting
Goal setting can be really challenging for most, but the results are really worth it. Here are some tips to make the process enjoyable and effective:
• Do an honest evaluation:
Look inwards and think about the direction you want to take your business. Then identify your biggest challenges, and how you can overcome them. Think of where you want your business to be in five years, and come up with steps that can help achieve your targets.
• Write down your goals:
Validate your goals by writing them down. Break down your long-term goals into short, measurable milestones. Make a large chart or print out your goals and post it where you can see it.
• Consider your budget:
If your goals require considerable investment, make sure that your budget can support them. Once you have considered your budget, you might find that a goal is not realistic, that it requires more time to achieve, or that you have to achieve additional financial goals before going for it.
• Make goals your priority:
If your business is in the development stage, it can be hard to find the time necessary for goal setting and keeping up with them; your day-to-day routine might take up all your time. In this case, it might be helpful to keep apart some time at least once a week to evaluate and strategize. Some entrepreneurs even work this into their schedule so that they don’t forget about goals.
• Ask a partner or trustworthy friend to hold you accountable:
Even an occasional question might be enough to keep you on track and focussed.
Effective business goals help you benchmark your success and help you push yourself to succeed. Make goal-setting an integral part of your marketing strategy and celebrate each milestone as you reach them.
So what goals have you set for this financial year?