New business owners hear it again and again: set goals. Goals provide us with targets to aim for; they codify our aspirations. You can’t achieve something that you haven’t defined.
Unfortunately, it’s much easier said than done. It’s simple enough to slap together some goals that you think might be worthwhile, but how effective is your goal setting? How much do you really know about setting accurate goals? How can you know that the goals you’re putting together will work in the context of your business?
SMART goal setting for businesses
There is actually a standardized method to set goals, one that will carry you through literally any goal, in any setting, business or otherwise. That methodology is SMART goal setting.
Developed in the 1980s by George Duran, SMART goal setting has far transcended its original creator to become a stalwart practice for crafting goals in every venue from government to personal development to finance. The reason that it’s popular is because it works. While there are some slight variations on what each letter stands for, the main points are there in most all of the iterations you’ll find.
Here’s what a SMART goal is:
- Specific: Goals have to be incredibly specific in order to be useful. If you don’t define what you want to get to, then you can’t ever know if you’ve gotten there.
- Non-specific goal: My business will be successful.
- Specific goal: My business will bring in more money than it spends (i.e. make a profit).
Success is an admirable goal, but you have to define what success means to you. Whatever the area that you’re setting your goal in, it has to be something that you can put a pin on.
- Measurable: This is another critical piece that people so often miss. What is the way that you plan to measure your goal? If you can’t quantify what it is that you want to achieve, then it’s literally impossible to achieve it. Nebulous goals don’t do anyone any good at all.
- Non-measurable goal: I want my employees to be happy.
- Measurable goal: My employees will score X on a specific satisfaction index.
With the first version, you have no way of knowing whether or not you’ve ever reached your goal, because after all, what is happiness? It’s definitely something that we want to foster within our organizations, but you have to nail it down and measure it if you want to be able to move forward with it. You can find some kind of measure for most any goal, be it customer satisfaction or financials. Go find a way to ascertain the status of your goal.
- Assignable: It’s a tough job, but someone’s got to actually DO it. Goals have to be set out with a responsible party or else there’s no hope of them ever getting done. You don’t always have to actually assign the goal to a specific person when you make it, but it’s definitely a good idea to go ahead and get it out of the way.
- Non-assigned goal: The company will increase sales by 4 percent.
- Assigned goal: Each person within the sales department will increase his/her sales by 4 percent.
It’s not helpful to make goals that don’t have individuals or departments assigned to them. It’s critical for success that goals be drawn down to the level of who is responsible for them, otherwise they just sit on a sheet or in a file somewhere and are utterly useless.
- Realistic: Success takes time and energy (and great goal-making) to truly make it. Give yourself the chance to succeed by setting goals that you can actually attain.
- Unrealistic goal: The company will double sales in the next two months.
- Realistic goal: The company will increase sales by 10 percent in the next two months.
If you set goals that are beyond your reach, you are only setting yourself up for disappointment and setbacks. Be honest about where you are and where you’re going, and you’ll get much, much further.
- Time-based: This last step is one that’s very easy to miss, but it’s the thing that drives the rest of it forward. You have to put a timeline on anything you do or else it’s just not going to get done. This is for every goal that you ever make: put a timeline on it!
- Non-time based: We’re going to double the size of our customer base.
- Time-based: We’re going to double the size of our customer base by the end of the year.
See the difference there? With the first one, you could be six years down the line and technically have achieved your goal. But that’s not really what you wanted to do, was it?
Putting it all together
Now that you’ve got all of the basics of SMART goal setting, let’s go through an example.
I want my business to be the best.
There’s nothing to this goal, however admirable the sentiment might be. When will it be the best? What does the best mean? What aspect of business will be the best?
Here’s the SMART version of this goal:
By the end of Q3, my business will move from being the second highest selling company in its sector to being the top selling company in its sector in Wake County through the support of the expanded sales staff.
Let’s check this goal to see if it fits.
We know that the company wants to not just get better, but to move from second to first in its category within a specific geographical area.
Sales are a quantifiable thing that we can measure.
While everyone has a role to play in increasing sales, this task is specifically assigned to the sales team.
Going from number two to number one is something that’s reasonable to do, though it should be noted here that if the number one company has a fifty percent lead on you, this might not be so realistic.
There’s a definite timeline with which this goal should be met, at the end of Q3.
This can be adapted to any kind of goal, and just about any existing goal can be molded to meet these criteria!
You’ll find that when your goals meet each of the five parameters associated with a SMART goal, that you’ll feel a lot more in control and much better about what you’re doing for your business. Not to mention, you will be able to get things done much more effectively.
Don’t just sit there, go set some SMART goals!