Goal Setting – Why Your Business Needs This
Why do you set goals for your business and how do you set the right ones?
Every business owner should know the importance of setting goals for businesses they own to ensure their continuous growth.
Towards the end of every year, businesses should assess a year’s worth of performance.
From there, they can come up with specific goals to ensure their business is on an upward trend.
How To Set A Business Goal
Having an effective goal-setting process in place guarantees four things:
- Business growth.
- Improvement of teamwork.
- Achievement of objectives.
- Everyone in the company knows and understands which direction the business is heading.
Every start of the new year is a good opportunity to reflect and review.
If you have missed this period.
Just identify a suitable time and do this.
Evaluating the strategies made the previous year will help you direct your focus and set new business owner goals to ensure success.
Having a business plan where your business goals and objectives are identified will be beneficial for the company as a whole.
Goal-setting Techniques
Before you start writing down the year’s business goals and objectives, it is important to identify those aspects of your business that need improvement.
The strategies below may help in achieving business goals and objectives:
SWOT Analysis
To effectively create business owner goals, you should know your business’ S.W.O.T. (Strengths, Weaknesses, Opportunities, and Threats).
Benchmarking
Study similar businesses and compare income and expenses based on industry standards and averages.
This process will help you understand the status of your business.
Market Research
Before setting goals, you should study industry movements and activities.
This way, you will understand what your customer needs.
You’ll also learn current trends and recent changes in the market.
Making goals for business then becomes easier.
Principles of Goal Setting
Effective goal-setting ensures that you are able to bring about change and improvement in all aspects of your business.
Goal-setting in management and the business as a whole helps direct action towards an end result that is beneficial for everyone involved in the business.
Having a list of business goals and eventually achieving them is a good motivating factor for everyone.
Here are the 5 principles of goal setting:
Clarity
You have to set up clear and specific goals for the business.
Clarity is knowing exactly what you want to achieve, with a specific time frame.
Leadership goals, personal or otherwise should be measurable and time-bound to be effective.
A clear list of business goals ensures focus and attention.
This also brings about guaranteed improved performance.
Challenge
Most people are motivated by unachievable goals.
The more difficult leadership goals are, the harder people will work to achieve them.
The more challenging these goals are, the bigger the satisfaction in the end.
The key to achieving business goals is to set challenging yet achievable action items.
Commitment
People who are committed are highly likely to achieve personal leadership goals.
A committed person knows exactly what the end goal is, and why he has to achieve it.
Commitment results in resilience, which is important when faced with challenging goals.
Feedback
Once goals are set, it is important to keep track and monitor progress.
This helps build motivation and unending commitment.
Effective goal-setting in management includes getting feedback and making the necessary adjustments.
Monitoring progress ensures that commitment remains, and action items are done.
Task Complexity
When you set challenging and specific goals, the risk of task complexity increases.
When complex goals are not carefully managed, you stand to lose motivation and squash commitment.
The wisest thing to do is break down complex tasks into smaller tasks.
Tips On Goal-setting
Goal-setting is a skill that needs some practice to become good at it.
Applying the above 5 goal-setting techniques and principles will increase your chances of achieving your goals.
Additional tips on goal-setting:
- Goals should revolve around your company’s mission and vision.
- Set long-term goals.
- Your goals should be specific and descriptive. A goal saying “closing 5 new corporate accounts each quarter” is more descriptive than simply saying, “we will grow our customer base”.
- Set realistic goals.
- Identify action items that need to be executed to achieve business goals.
- Determine the people who will be responsible for each of your set goals.
- Establish someone to keep track of your progress.
- You should identify the resources required to achieve your goals.
- Keep track of your progress.
- Establish good communication lines between groups and/or departments.
- Reward your people with every goal the organization achieves.
Steps To Goal-setting
Begin With A Dream
The first step on how to set up a business goal is to dream of something you want to accomplish.
Write down on a piece of paper every possibility, whether big or small.
What do you want your business to achieve in five years?
Where do you want your business to be ten years from now?
Brainstorm
Once you have clear and specific dreams, perform brainstorming sessions with your team. ]
Get everyone’s thoughts.
Write everything down, regardless of how insignificant an idea is.
Build a list and make an outline of possible goals.
Sort Your Options
Consider everything [ideas] from the whole team.
Sort them out into different categories based on their level of importance to the business.
Rank all the ideas gathered.
You may also use this sample category list:
- Attainability.
- Desirability.
- Financial impact.
- The time commitment needed.
When you have your categories, place your ideas into groups.
You will see that they will be overlapping ideas.
This means you are on the right track.
Create A Plan
Once you have everything sorted out, identify one or two goals you want to focus on.
Your plan of action should have specific steps you need to take to ensure that you reach your goals.
Be reminded of how important these goals are to your business and what it means for your business once you achieve them.
Focus on the present
Working to achieve specific business goals may overwhelm the whole team.
However, if these are broken down into pockets of achievable goals, then your path to success becomes easier.
As you focus on the bigger picture, you may take on your goals one day at a time.
This practice will help boost your confidence in yourself and in your team.
You build momentum until you arrive at your destination.
These are simple and easy steps to goal-setting.
Setting Realistic Goals
Your business goals should be realistic to be achievable.
There are many ways to make goals realistic and doable.
One of the most popular techniques is using the SMART goals process.
SMART goal setting is integral to the process helps you save time and energy.
SMART goals will make the whole team more efficient and productive. It spares you from running in circles.
S.M.A.R.T
S = Specific
Your goals should be clearly defined.
If you are new to setting business goals, the things you want to accomplish may still be vague.
However, vague objectives are often unattainable.
As you continue with the process, you need to make sure that your goals are clear and specific.
A specific goal clearly states what you want to achieve, why it is important, and how you intend to achieve this particular goal.
An end goal that states that your business increases in revenue will leave managers and employees wondering what needs to be done.
This goal is vague.
You should not set goals for the business all at once.
You should focus on one aspect of the business at a time.
For example, what do you want your sales team to do?
How can the customer service team help achieve your goal?
A specific business goal could be, “to increase business revenues by the end of the first quarter of the year by changing marketing strategies”.
Be specific, be precise.
You want the whole team to focus on one objective at a time.
M = Measurable
Identify targets, acknowledge milestones, and track your progress.
You should have a plan in place, with specific targets and milestones to achieve.
These will steer you in the right direction.
Set standards.
Using the previous example, a specific and measurable goal would look like this: “make the business more profitable by increasing sales output by 10% at the end of the second quarter”.
You can measure the 10% target.
Numbers should be used to quantify goals like increased productivity, an improvement on product/services offered, lower shipping fees, or minimizing the incidence of accidents in the production department.
A = Achievable
Goals should be realistic and attainable.
While you were told that your goals should be challenging enough, you still need to keep real and attainable.
Your goal should be realistic.
You may have identified that a complex task needs to be done to achieve your goals.
This complex task should be broken down into smaller, manageable tasks.
You should not confuse its realism in relation to your business.
Your set goals may be realistic for another business but not for your own business.
For example, if your goal is “to increase sales”, yet you dismiss almost half of your sales team, obviously, your goal won’t be attainable for the time being.
This example also applies when your company just lost a major client because increasing the company’s revenues might be impossible to achieve.
As mentioned earlier, you have to identify every aspect of your business.
Analyze how your business functions.
From there you can start deciding on business goals you want to pursue with your whole team.
R = Realistic
Your goals should stay in the realm of reality.
You can’t say you want sales to double in one month, and you don’t cut expenses in almost half overnight.
Do not make the mistake of expecting a complete turnaround in days or weeks.
When you break down tasks into smaller tasks, it is easier to set a reasonable date of completion.
T = Time-based or Time-specific
Identify a specific time frame that your team needs to achieve goals.
The goals you set cannot be open-ended.
You should identify a specific completion date for every goal.
Define your timeline and give your 100% commitment to achieving each goal.
Set deadlines.
Creating a sense of urgency will motivate you to work hard to achieve your goal.
Your business goal should include a defined period of completion, and a specific timeline for every step.
You shouldn’t say, “to increase revenues someday”.
Sometimes, someday never comes.
This is the most crucial part of setting your company’s goals and objectives.
Make sure you sit down with your team.
Everyone in the group should know all your business goals.
It is important to mark the expected date of completion on your calendar.
Open communication should be maintained between you, your managers, employees, and all the other people concerned.
Setting deadlines is one way of motivating your people.
Doing so also raises expectations not only for themselves, but for the team, you, and the company as a whole.
There are simple business goals and there are goals that are worth more of your time and energy.
Setting realistic goals is made easy when you master the process of creating SMART goals.
How To Set Goals For Employees
Goal setting for employees is a key responsibility for managers.
Setting measurable goals allows supervisors to monitor employee performance.
It is also an excellent tool that will strengthen your business and improve your reputation as an employer of choice.
Important Considerations On How To Set Goals For Employees
Business Goals Should Be Aligned With The Company’s Objectives
Employees should be made aware that they have an important role in the growth of the business.
When they know and understand their specific roles and responsibilities, they become more focused and motivated to work hard towards achieving company goals.
Constant communication is integral to the process.
Talk To Employees About Job-specific Goals
Managers and/or supervisors may have identified specific goals in mind for each of their subordinates.
However, employees are likely to give insightful answers when they are asked to identify goals and objectives related to their individual jobs and responsibilities.
There’s a huge difference between imposing business goals on your employees and encouraging each one of them to contribute to setting their own goals.
When these goals are aligned with the goals of the company, your managers can help in the development of plans of action to achieve these goals.
Depending on the department they belong to or the position they hold, some goals may focus on increasing productivity and efficiency.
An improvement in your employees’ productivity would translate to increased sales.
In customer service, increased productivity means the resolution of customer concerns in a shorter period of time.
The key is making your employees and everyone else in the team contribute.
Focus On Goals That Are Attainable
It cannot be emphasized enough that goal-setting fails when goals are too complex (ambitious even), or simply unattainable.
Your employees may have the skillset and management has provided all the resources needed, yet goals remain unreachable.
When you burden employees with hard to reach goals, they will end up being frustrated and unmotivated.
It all goes back to practicing the SMART technique.
Goals Should Be Consistent Among Employees With Similar Duties And Responsibilities
Most managers often fail at goal-setting when employees are made to compete against each other.
Refrain from setting different goals for those employees who share the same responsibilities.
Likewise, avoid encouraging rivalries, which often leads to resentment for managers.
Instead of employees being motivated, they will end up demotivated.
Reward Achievers
Honor the efforts of employees who achieve, or even exceed management goals.
The rewards system is a good motivating factor for all the other employees to work hard just like everyone else.
Do Not Disregard Underachieving Employees
While it is important to recognize employees who reach targets and exceed expectations, you should not take for granted those who fall short.
Work closely with them.
They may have the skills but might need a little more help.
Provide encouragement.
Help them identify and turn their weaknesses into strengths.
Do not resort to the blame game, lest you want these underperforming employees to slip further.
A regular review of employee performance is a good opportunity for managers and employees to co-create goals and objectives.
Finally
Your company may offer the best product in the market today but still struggling to increase sales and profits.
To ensure the success of your business, you, as the owner and leader should be able to set management goals that are attainable, time-specific, and realistic.
Most business owners fail at goal-setting when they impose on their employees and set unreasonable and unachievable goals.
You may opt to challenge your employees with difficult goals and objectives, but these goals still need to be realistic, time-specific, and attainable.
Everyone may welcome a challenge, in fact, it can be a source of motivation.
The more challenging the goals, the sweeter the feeling when you achieve them.
Be SMART when you set goals, and bring your business to greater heights.
How has your experience in goal-setting been for you, your employees and your business?
Do share!
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