As we begin a new year, many of us are thinking about our New Year’s resolutions and setting personal goals for ourselves. As a business owner, it’s just as important for you to use this time to create business goals as well.
What are business goals?
A business goal is a predefined target that you set for your business to achieve within a specific time frame. Your small business goals define where your business is going and can help create a framework for how to get there.
Business goals can be broken down into two categories: short-term goals and long-term goals.
- Short-term: Short-term goals can be achieved in the near future, within 3 to 6 months. These goals tend to be more concrete and actionable, and can be stepping stones towards a larger goal. Some examples of short-term goals could include hiring more employees, creating an online presence, or growing a customer/client base.
- Long-term: Long-term goals are high level strategic goals that are typically achieved in over a year. These kinds of goals give your business direction and can be used as a framework for your smaller goals. Some examples of long-term goals could include increasing revenue or expanding into a new market.
Why is it important to have business goals?
Having effective business goals is the key to having a successful business. Well-crafted and defined goals have several benefits such as:
- Giving your business direction. Clearly defining your goals makes it easier to complete them. Your business goals give you something to focus your efforts towards and keep you on the right track. Studies have shown that people that write down their goals are 42% more likely to achieve them.
- Aligning your teams. The larger your business becomes, the harder it is to keep everyone on the same page. Having business goals in place can ensure that everyone is moving in the right direction and create accountability for yourself and your employees.
- Making better decisions. When a situation arises and you’re not sure which direction to take, you can use your goals to help you decide.
How to create your goals
When creating goals for your business, you should always start with the end in mind. Picture the outcome you want to achieve. What steps will you need to take to get there?
The SMART framework is proven to be a powerful tool in goal-setting. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. In order to be effective, your business goals should meet all of these criteria.
- Specific: A good business goal is straightforward. What do you want? How are you going to get there? Who needs to be involved? You should know exactly what you want from your goals and have a clear understanding of how you’re going to achieve them.
- Measurable: There needs to be a way to measure the success of your goal. For example, if your goal is to increase your client base, how many are you going to raise it by? 10? 100? 1000? Having a clear measurement allows you to know whether the goal has been met or not.
- Achievable: We are often told to aim big and shoot for the stars. But if you want your business to find success, you need to be realistic with your goals. Is it something you could reasonably achieve given your circumstances?
- Relevant: You should understand how each of your business goals fit into the greater objective of your business. Why are you doing this? What greater purpose does it serve?
- Time-bound: All of your goals should have a time limit for how long you want to spend reaching the objective to consider it a success. Make sure the timeframe is realistic. If you set too short of a time limit, reaching your goals may be too difficult. If your time frame is too large your achievements won’t be as impressive.
Though creating business goals can’t guarantee success, having them set in place can help drive your business in the right direction!
By Michaela Lenahan in Small Business