Setting goals in your business is a vital part of making sure that it thrives and takes steps in the direction you want it to.
Setting goals can be simple but breaking them down so that they are achievable is important.
This guide can provide you with the simple steps to make sure you set goals with steps that are actionable, achievable and measurable.
Why not just carry on winging it in business?
If you have never set goals before in your business and you’ve done okay then you might not think it is important, but just imagine how well you could do with a plan rather than winging it.
Business goals and objectives are important and should be established for a number of reasons.
If you don’t define what success looks like, the chances are that your business will never achieve it.
You need goals to measure growth by comparing them from year to year or month to month. If you’re not seeing the results that coincide with your expectations, then it’s either time to adjust your goals or get to the bottom of why you cannot meet them.
Goals are also important because it shows that you’re organized and have a plan in place, which is especially helpful when raising capital for growth. It lets potential investors know what milestones to expect throughout the process of investing into your business.
Goals keep you and your team focused, and provide a clear benchmark against which to measure your success. Clear goals enable you to prioritise the most important tasks and focus on the things that matter most.
Step 1 – Identify where you want to focus on improving in your business
First things first, what are the top areas you want to focus on in your business?
Of course, this does depends on your business, industry and what you want to acheive, but here are some examples to start your mind thinking:
- Improve customer service
- Reduce costs by X%
- Grow sales volume by X%
- Be the first in your industry with a new product or service offering
- Increase employee satisfaction to X%
- Improve customer retention rate by X%
- Reduce company debt to £XX (or entirely)
- Increase profit margin by X%
- Reduce time required for product or service production by X%
Step 2 – Convert step 1 into SMART goals
In order for your goals to be effective, you need them to be SMART.
This means they are:
- Specific – very clear and easy-to-understand.
- Measurable – determined by the numbers or data.
- Achievable – your goals must be realistic, or else you are simply setting yourself up for failure.
- Relevant – each goal should be pertinent and directly beneficial to your business.
- Time-bound – the deadlines must be clear and reasonable.
So for example lets take “Increasing profit margins” from step 1. This is not a good enough goal as it is because it’s far too vague, how do you know when you’ve achieved it and how to?
So let’s create a SMART goal out of it;
“Increasing our profit margins by 10% by the end of 2024 by reducing costs and increasing efficiency”
The timeframe element is important so that you have think about what you need to do within this time to achieve it and break the goal down into milestones or tasks.
So in this example, you won’t increase your profit margins by 10% overnight – it will happen in much smaller increments. Therefore, you should set milestones that will be reached along the way. For example, you might aim to increase profits by 4% by the end of Q1. Then, you can adjust your goals against real-time progress.
Step 3 – Review regularly
It is crucial that you regularly review your goals to ensure they are still relevant and helpful. You may find that the market has changed, or that new opportunities have emerged based on customer feedback which would alter some of your original plans – this means it’s time for an update. Maintaining four or five year goals is a good idea, but you should also create one-year and quarterly plans to ensure your business stays on track.
Step 4 – Tracking Goals
You can’t track goals unless you have something to measure – hence the importance of the SMART goals structure.
So once you have these you can create a scorecard to regularly update with your metrics and track the progress you are making. This makes it easy to see if you need to adjust your tasks and milestones and get back on track to ensure you can still achieve the goals.
Clear goals provide a clear direction for your business and keep everyone on the same page, working towards achieving something that is meaningful and beneficial to all. They can be used as an effective tool when pitching to investors or potential partners to give an idea of how the business will progress over time.
No matter how well your business is doing, there are always areas for improvement and new heights to reach. Setting goals is the first step on the journey to success..
If you would like support in setting SMART goals within your business and setting up a scorecard to track your progress then please get in touch and book a support session with us.
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Thank you for reading this weeks blog – How to set business goals for 2024 and the future… .