Setting SMART Business Goals
We all know the importance of setting goals, but what types of goals should you set? How do you measure them?
Running a small business means learning how to keep track of your successful and not-so-successful ventures. For many, that means setting goals and striving to achieve those goals. The simple act of goal setting can help move something from a vague desire to an actionable plan. In other words, setting smart business goals actually helps you move in that direction.
What if you don’t know where to start when it comes to setting business goals? We’ve got you covered. Business pros recommend setting goals that are specific, measurable, achievable, relevant, and time-based (SMART).
This SMART framework will help you determine which goals you can realistically accomplish. You should also make sure you set a timeframe within which you want to complete your goals. The proverbial ticking clock with help you stay on track and keep the momentum moving forward toward your end goal.
1. The Basics: How Do You Set Business Goals?
Think about goals you may want to set, then ask yourself if they make sense based on the SMART framework. You should strive to make your business goals as specific as possible. Don’t just say you want to increase sales – say you want to achieve a set amount of sales within the next six months.
Also, setting the goal alone isn’t enough. Once you have your endpoint, you need to lay out a plan to get there. Say you want to set a goal to expand your business by 30%. You’ll want to set goals to secure funding, hire more employees, increase your production, and find a larger lease space. You’ll also want to give yourself a deadline by which you should accomplish each piece of the larger goal. These smaller goals make your larger goals seem less daunting and more achievable.
2. Dollars and Cents: Setting Sales Goals
Certain business goals should be precise and quantifiable, like sales goals. All sales goals should start with a baseline. In order to know if your sales numbers are growing, you’ll need a snapshot of where you are right now. Ask yourself the following questions to set a sales goals baseline:
- What’s the average number of monthly customers?
- How much is your average sale?
- Have your sales figures increased or decreased over the past year?
Once you’ve answered these basic questions, then you can expound on where you want to go from there. You can opt to set a goal to make a certain dollar amount in sales each month. Or, you could measure sales growth as increasing total sales by a certain overall percentage. Alternatively, you could set a sales goal to sell a certain number of a new product.
No matter how what sales goals you set, you’ll want to measure the progress.
Most pros advise breaking down sales goals into smaller goals, such as weekly or monthly goals. Measuring sales goals in smaller increments can give you real time feedback on how your sales numbers are adding up. You can then make business adjustments accordingly to boost sales, rather than playing catch up at the end of a lackluster sales quarter.
3. Measuring Other Goals
Sales numbers easily lend themselves to goal setting and concise tracking. But what about measuring other business goals? What if you want to revamp your production method, offer a new employee development program, or change the way you hire new employees. You can’t pull those measurements from accounting software, so how do you deal with those?
For that kind of goal, the best way is to set a deadline (plus smaller intermediate deadlines) and then record the progress you make along the way. You can do something as simple as mark your progress in a journal. There are also programs like Evernote or Goalscape that can help you track your goals and can even send reminders to help keep you on track.
Meet Your Small Business Goals
Learning how to set goals and then work toward those goals is an important skill for any small business owner. The SMART framework of goal setting can help you create, track, and strive toward your goals by helping you create an action plan for your success.