Goals provide both motivation and future direction for your business. While it's important for them to be ambitious, they still need to be achievable.
A good way to think about and set goals is to use the SMARTER framework. Setting these type of goals allows you to lead your business without getting caught up in specifics. Here's what is involved:
Rather than setting a general goal like “I want to grow my business,” decide what exactly you want to achieve. For example, are you going to grow your business by increasing sales or by cutting costs? Doing both at the same time could prove problematic.
Instead of setting a general goal, say "I want to grow my business", decide exactly what you want to achieve. For example, will you grow your business through increased sales or by cutting coasts? Doing both simultaneously could prove problematic.
If you want to increase sales or cut costs, set a financial target for your goal that you can track and measure. For example, you may say, “We will cut costs by 10%” or “We will increase sales by 10%”.
If your goal is to either increase sales or cut costs, set a financial target that can be tracked and measured. For example, “We will cut costs by 10%” or “We will increase sales by 10%”.
Your goals must be attainable and you must have means of achieving it. If you want to increase sales, consider if will you cross-sell or up-sell your products/services. Then, include this in your goals. For example, “We will increase sales by 10% by up-selling X product to Y segment.”
Increasing sales by 10% is ambitious but can it be achieved? A stretch goals pushes you beyond what's been done previously while a realistic goal is based on past performances.
Set deadlines for your goals and work them into your business plan. Quarterly goals often work well as they're not so long away that they seem unachievable but not too soon as well. They can also be tracked alongside financial reports. For example, “We will increase sales by 5% during the first quarter through up-selling X product to Y segment.”
At the end of each quarter, or any other time period you chose, review your SMARTER goals and how you're progressing against a financial target. This can be done using up-to-date financial information along with business insight from your team.
Once you’ve evaluated your progress, adjust your goal for the coming quarter by doubling down on what works and abandoning what doesn’t. You should also inform members of your team about any changes to a SMARTER goal so they work on what matters most to your bottom line.
Once your progress have been evaluated, adjust your goal for the next quarter by strengthening what works and abandoning what doesn't. Inform your team members about any changers to the SMARTER goals so they work on what matters to your bottom line.