Tips for Setting Better Business Goals
Learn how to create better business goals that can help you guide your company.
Setting business goals helps you figure out which direction your company should be headed.
Active and affirmative language is key when writing your goals because it impacts how you perceive them.
To make your goals reachable, make sure they are SMART (specific, measurable, achievable, relevant and time-bound).
If you want to take your business to the next level, setting the right goals could be the key. While creating the right goals for your company can be a challenge, the best ones can make all the difference in your growth.
Obviously, hard work is required to build your business, but you also need some direction. Setting strong, attainable goals is a good place to start. Read on to find out about different types of business goals and how to set them.
What is a business goal?
A business goal is very different from a New Year's resolution and has way more money riding on it than a gym membership fee. Business goals are objectives tied to the vision you have for your company and the achievements you want to accomplish. They may pertain to the whole company, certain departments, specific groups of employees or other areas of the business. Depending on your purpose, the goals you set to help your company progress can be daily, quarterly or yearly objectives. If you've created a business plan, you may have already mapped out your goals as action strategies.
When setting business goals, it helps to be SMART, as in the goal-setting acronym that stands for "specific, measurable, achievable, relevant and time-bound." According to Angela Civitella, certified business leadership coach and founder of the firm Intinde, SMART business goals can be extremely effective.
Here are some pointers on what it means to set SMART goals.
Specific
When setting a goal, it's important to know exactly what you hope to accomplish and what actions you must take to reach your objective. Let's say you want to improve your business revenue – these are some of the specifics you would want to decide as you set your goal:
The dollar amount or percentage of revenue growth you want to achieve
A deadline for when you expect to reach the objective
Which department or individuals would drive this process
What steps they would take to work toward this goal
What resources you would need to allocate to help your staff meet this objective
Measurable
Measurable goals use metrics such as dates and numerical values to track your progress toward your goal. This approach not only encourages you to focus on the end goal, but also helps you evaluate how your efforts are helping you accomplish your objectives, which can help you stay motivated. In the above example, your measurable goal might be to increase your sales by $5,000. You might decide that this should happen in a month, and ask each member of your sales team to follow five extra leads a week.
Achievable
For a goal to be achievable, it must be realistic. For example, a goal to make $1 million in one day probably isn't attainable for most of us, and setting such a goal would be setting yourself up to fail. Even though your goals should require you to expend extra effort, they should be reachable.
Relevant
A relevant goal is one that matters to your business – it should make sense and meet your business's needs. Referring again to the example above, would increasing your revenue make a difference to your business? Of course! However, not every business goal needs to be about revenue.
"If one of your big values is to serve others to the best of your abilities, then merely setting a revenue-based goal isn't going to be enough to motivate you," Heather Moulder, executive career and personal leadership coach at Course Correction Coaching, told business.com.
Time-bound
A time-bound goal has a deadline for the work you intend to do. When there isn't a time limit, it's hard to measure your progress. Deadlines can push you to action and help you work toward your goals efficiently.
What are examples of business goals?
Knowing what a good goal looks like can help you model your own for your small business. Let's say you want to increase revenue through the introduction of a new service or product. Moulder said this goal is purposeful and beneficial to your company because it would help you better serve your clients and improve customer satisfaction. It would also mean taking on more responsibility for the launch of your new product or service, so you would need to prepare for the time and resources that entails.
Business goals can also be about your employees. If your objective is to improve or expand your employees' skill sets, you can do so through actionable items, like creating a committee to hire a professional instructor for the training courses. Then, the objective would be to train the employees for the next six months. When they complete the course, you can measure their skills by assigning tasks based on what they've learned.
How do you write a business goal?
It's one thing to have general goals in mind, but you need to put pen to paper. Writing your goals down is very effective. In the Self-Development Secrets survey by Harvard Business Study, 83% of respondents did not have any goals, 14% had unwritten goals, and 3% had written goals. While the group of respondents who had unwritten goals was 10 times more likely to succeed than those with no goals at all, the 3% with written goals was 30 times more likely to succeed than those with no goals.
"The physical act of writing down a goal makes it real and tangible," Civitella said. "You have no excuse for forgetting about it."
Here are two tips to help you write effective business goals.
1. Write in an active style.
The language you use when writing your goals impacts how you perceive them and whether you get them done.
"As you write, use the word 'will' instead of 'would like to' or 'might,'" Civitella said. "For example, 'I will reduce my operating expenses by 10% this year,' not 'I would like to reduce my operating expenses by 10% this year.' The first goal statement has power, and you can 'see' yourself reducing expenses. The second lacks passion and gives you an excuse if you get sidetracked."
2. Narrow down what's important.
Make sure your goals are important to you and your company. Ask yourself, "Does this goal motivate me?"
"If you have little interest in the outcome, or they are irrelevant given the larger picture, then the chances of you putting in the work to make them happen are slim," Civitella said. "Motivation is key to achieving goals."
There is such a thing as too many goals. Make sure you only write down items that are extremely valuable to your business. A long to-do list with only two items crossed off can cause feelings of disappointment and frustration, which can add to your demotivation and be incredibly destructive, Civitella said.
"Ask yourself, 'If I were to share my goal with others, what would I tell them to convince them it was a worthwhile goal?'" she said. "You can use this motivating value statement to help you if you start to doubt yourself or lose confidence in your ability to actually make the goal happen."
What are different types of business goals?
Four types of goals are especially helpful in the business world. Read on to learn more about each of them.
Activity-based goals
Activity-based goals require you to perform certain tasks or activities. For example, you might set a goal to make 20 client phone calls each week.
Process-based goals
Process-based goals require you to focus on internal processes, strategies and behaviors. "Some examples would be resetting business policies for better efficiency or developing a new training program for staff to help their communication with customers," Moulder said.
Outcome-based goals
Outcome-based goals focus on the results of your efforts. You may have less control over these results if they're based on consumer or client behavior. "An example of this would be to get 10 referrals from existing customers," said James Pollard, owner of The Advisor Coach LLC. "You can't directly control whether or not they give you any referrals, but you can influence the process by asking."
Some goals are a hybrid of process and outcome goals, explained Moulder. For instance, a service-based business might set a goal to implement a new staff training program in order to improve customer service. The process portion of the goal is implementing the training program. The outcome is improving customer service – which you could gauge by a reduction in service cancellations or an increase in repeat customers.
Personal goals
Personal goals are those that business owners set for themselves. These may be related to maintaining or improving your health, work-life balance, or professional development. Knowing what you want for yourself is just as important as understanding what you want for your business, because your personal goals affect how you run your company.
Why is setting goals important in business?
We set small goals in our everyday lives, such as making it home in time for dinner or eating salad for lunch. Goals are vital because they give you and your business direction. Without them, you may stagnate or fail to perform at your best.
Without goals, it's hard to measure your business's success, which makes it difficult to recognize what aspects of your business are doing well and where growth is needed. Objectives and a mission statement also keep you and your team aligned. When everyone knows the purpose of the company and how their roles contribute to the mission, it improves morale, which contributes to higher productivity.