Tips for Setting Business Goals
Whether you are a startup or a scale-up, small business or medium business, you need to know how to set business goals. Why? Because goals keep your business moving forward. If you want to know more, read on to learn tips on setting EXCELLENT business goals.
When you were in school, you were given papers asking, “What do you want to be in the future?” or “What is your goal in life?” Then, you go and write: “to be a doctor” or “to be an astronaut.”
In high school, these questionnaires help determine your career path. It’s like a compass or map for a journey ahead that will help you accomplish your dream or your goal.
It’s the same with business goals. These goals are something that a business anticipates accomplishing.
It can be a goal for the entirety of the company, or goals set by the department, per product, individual employees, or customer. Business goals do not have to be specific; they can be broad outcomes that a company wishes to achieve.
Unfortunately, a lot of people mistake business goals for objectives. These two may be related to each other, but they are not the same.
Business Goals vs. Objectives
Business goals and objectives can only be the same, right? You need to achieve goals, and the same goes for objectives. However, these two differ in various ways.
Compared to objectives, goals are more generally defined and are set as long-term markers. Objectives are more specific and carefully measured steps to achieve a goal. You can accomplish an objective in weeks or months. However, a goal takes years to accomplish.
Business goals define the “what” about your business, while objectives define the “how.” Take an online retail clothing business as an example:
Goal: What is your goal? To own a physical store
Objective: How can you achieve this goal? Increase product quality, increase sales, and invest in marketing to afford commercial space
From what you can observe, a business goal gives direction, all the while the objective presents a clear, actionable outline of the steps you need to take. So basically, the objective needs to tie together with your goal to take action.
How to Set Business Goals
We just set the record straight between goals and objectives, as well as the importance of goals. It is now time to learn tips for setting business goals.
The company’s core statements
Every company starts with a vision and mission statement. These core statements revolve around the company’s primary goal, which is why the company was founded in the first place.
Every scaling business should construct definite company core statements to share among the members of the organization. More importantly, it should be in writing. Seeing your goals in front of you is like a light tower that keeps you motivated to work and progress.
Break down long-term business goals
Long-term business goals may seem hard to achieve, but that’s the whole idea. Dream high and achieve high results. However, you need a foolproof plan to reach the high point.
That is why you need to break down long-term goals into actionable and doable short-term objectives. For example, the goal is an annual sales increase of 30%. That can be an overwhelming number. But if you break that down to a 2.5% increase per month, that is something you can look forward to achieving.
Involve your employees in goal-setting
Co-create your goals with your employees. You don’t have to ask every one of them. Ask each of your department managers how they see their future. Doing this also evaluates where your progress is currently at.
By hearing the input of each department, you can determine whether you are headed in the right direction or have achieved the goal you set.
Focus on your long-term goal!
Sometimes we can get side-tracked by small details, ignoring the telltale signs that no longer maximize our strengths, like social media marketing. Social media is making a considerable impact on consumers, a fair reason to invest in the platform.
However, the company goal is not to be an influencer. Social media marketing is there to generate sales for the company. Don’t let your short-term objective swallow your long-term goal.
Commit and be consistent
Goals help strengthen and motivate the business, but they become useless if you aren’t motivated to achieve them. These are not mere wall decorations. Goals are set high enough that you can complete them.
If you can’t reach your goal on the first try, don’t impulsively change! Regroup and reevaluate. Maybe your objectives aren’t tied down to your goals. Perhaps there is a process that needs improvement. Don’t change your destination during a storm when you can simply take a detour.
Why are Goals Important in Business?
Goals are essential to any business. These are the columns that support the whole building as it grows taller and taller. To elucidate more on the importance of business goals, here is a list of notable reasons:
You can fairly measure success by monitoring the status of your goals. If you have achieved your goals, you can simply be successful in what you wish to accomplish. Then, it is time to set another goal.
Keep everyone on the same page
A business is never a one-person show. Each employee of your company should know and understand your goal to work on the same path. Imagine your business as gears in a mechanical clock.
The cogs of each gear wheel are interconnected so that when one wheel turns, it affects the rest of the gears.
The outcome is a mechanical clock that works perfectly. Without a goal, everyone works at their own pace, in their own will. There is no unity, productivity, or efficiency.
Employees understand decisions made to achieve such goals
In business, there are always situations that require difficult decisions. There are even some hard decisions that significantly affect the whole company, especially the employees.
You need everyone in your company to understand that these decisions are made in coherence with your goals. That is why you need to set goals, make everyone understand, and ensure that you are on the same page.
Ensure you are in the right direction
A business without a goal is like a wandering ship without a destination, map, or compass. The captain keeps steering the wheel and simply making sure that the vessel does not sink. But how can this ever work?
If you set a business goal initially, you will know what direction you should take. Then you start to foresee possible challenges and risks along the way. So, you are ready when and how you can face these storms.
Setting Business Goals: The Frameworks
To help you in setting your business goals, here are practical goal-setting frameworks that you can use. Remember, these frameworks are not definite. You can always shake things up, mixing one framework with another.
1. SSPG: Visionary Goal-Setting
This framework works best for a visionary CEO or company. It focuses on four general areas: service, social, profit, and growth.
- Service – these are goals related to improving customer service and customer retention
- Social – goals that are closely related to philanthropy work and giving back to the community
- Profit – is a common goal to almost all businesses which is to increase profit by a certain percentage
- Growth – company expansion like employee growth, audience expansion, or company acquisitions
This framework is prevalent since it does not simply apply to business but even in daily life. The SMART methodology is an acronym for specific, measurable, action-oriented, realistic, and time-specific.
- Specific – with the SMART method, your goal should never be vague and broad. It should define a specific goal, such as having 200 employees in three years.
- Measurable – your goals should be measurable to keep track of your progress and ahead of deadlines. Measurable goals mostly ask: how will I know when it is accomplished?
- Achievable – your goals need to be viable and realistic for you to accomplish. How accurate is the goal based on your current resources?
- Relevant – your goals must stay relevant to the current socio-economic situation.
- Time-specific – set a target date for your goal. Don’t keep it running for too long. By placing a specific time frame, you will know if your methods or processes are working or not.
MBO means Management By Objectives. This framework defines your company department’s objective. With the MBO goal-setting process, you are defining the top goals of your company. Then, each department determines its objectives contributing to the ultimate goals.
4. BHAG: Big, Hairy, Audacious Goal
This term was first coined by Jim Collins in 1994. BHAG is a single long-term goal that energizes the whole organization into achieving. This framework requires long-term commitment since it takes over 10-25 years.
An example of this is Sony’s BHAG: transforming the world’s perception of Japanese products being of poor quality.
As we all know, Sony did change the nation’s perception of their products and the whole world. It is common knowledge now that Japanese products are known for their quality and durability.
However, it did not take them 3-5 years to achieve this. It took them a couple of years more to prove to the world Japan’s excellent product quality.
Road to Success: Set Better Business Goals
And there you have it, setting up business goals. Goals are set for the company to accomplish great success, and it helps a business keep moving forward. There are also various tips and frameworks on how to set target goals.
After learning those things, you are now ready to establish your own business goals. But a goal is no more than an abstract idea if there is no action.
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Full Scale services encompass software development, application development, data analysis, product development, and even digital marketing. Under our roof are trained talents of various fields (programming languages, latest development technology, current trends in sales and marketing).
If you partner with us, you are also partnering with seasoned entrepreneurs who started from the ground up—starting with our founders, Matt DeCoursey and Matt Watson, who are successful in their own right. Schedule an appointment and take a step towards your goal.