I totally understand.
You have other important things than to sit and set business goals. You can improve your product. Work on new marketing campaigns. Try to win more customers. The list is endless.
But you must not neglect business goals. Just because they are intangible does not make them any less important. They influence every decision you make – from what to sell to how to sell it. You can’t spend years getting educated and then skip creating a killer resume. Yet, that’s what happens when you focus less on business goals.
However, only a tiny fraction of these goals get achieved. So it makes sense that most small business owners don’t bother with them. But the problem is not with the goals themselves. Rather, the methods used to set business goals are to blame.
Most entrepreneurs do it wrong. And they fail to succeed as a result. But anyone can set great business goals and achieve them. All that’s needed is the right information. And lucky for you, this article will teach you how to do it correctly.
So without further ado, here goes the first step.
Step 1: Know Where Your Home Is
Imagine you are left in a foreign country with nothing but $$$ (consider this to be half of what you would need to get home) in your pocket. To simplify things, let’s assume there is no other way you can find more money, and you are instructed to get home using only what you have.
It is possible successfully fulfill the instruction in this situation. That’s because you know your destination and you know your resources. You can create a plan that makes the best use of what you have.
If you don’t set business goals, however, then you don’t know your destination. So allocating your resources correctly becomes impossible. You may find yourself broke before you even start your journey.
You have a business because there is a benefit you want to gain in the end. It may be financial freedom, the flexibility of living life as you wish, or whatever. This benefit is your home (which is also your overall goal). Not only will it motivate you, but it will also guide how to do business.
Let’s assume the business you want to start is centered on developing and selling business software. You need to define your overall goal before you take any further steps. As already said, this could be financial independence. Or you may want to have more money so you can live a luxurious life.
Most entrepreneurs say they just want to have money. But that’s wrong. Money is useless if you have nothing to do with it.
Goals change with time. So don’t worry much about what you choose now. Write the goal down and keep it close by.
However, this goal is ambiguous. The brain loves clarity. If we don’t clarify this goal, it won’t stick around for too long.
The Trusted Strategy for Clarifying Goals
You probably have already heard that goals need to be SMART (specific, measurable, agreed-upon, relevant, and timed). Successful managers have been using this strategy for a long time. And they swear that it is one of the keys to set business goals that you can achieve. Here is how to use it:
Specific – the goal must clearly state what it is you are trying to achieve. In our case of selling software, we could say, “Start a business that sells business software.” So we know what we will be doing.
Measurable – the goal must also have some metrics you can use to see how well you are moving in achieving it. Building on our example, we could say, “The business should bring $50,000 per month.” You can also measure in the number of products you sell, the number of customers you acquire, the number of new branches you open, or the rate at which the business expands.
Agreed-upon – running a business takes more than one skill. You need people to sell, others to develop the product, others to market it, and others to ensure that everything is operating efficiently. All these people need to be working for the same goal. If their efforts are not integrated, the business will fall. Since you are probably just yourself or do not have a lot of employees, this point is fairly easy to achieve.
Relevant – remember the overall goal you just created? It must serve as the umbrella. The ones that get SMART must be building towards it. Let’s imagine the overall goal was financial independence. Assuming you were surviving on $30,000 a year, then $50,000 a month will certainly offer you plenty of money to live life as you wish.
Timed – nobody wants to spend his life chasing an endless goal. We have other things in life to do. So your goal must be timed. You would say, “5 years from today (good practice to specify this date), I will have a business that brings $50,000 per month.” The time-frame must be enough to allow you to achieve the goal, but it must not be too relaxant. To achieve this balance, research other people in the same business as you. How long did it take them to achieve a certain result? That will give you a starting point.
Note: Every goal after the main goal needs to be SMART.
Step 2: Determine Your Milestones
Building a business that brings $50,000 a month is not easy. And the 5-year window is too long to motivate you. Actually, a goal like this brings fear.
The solution is to break it. You need to set milestones you can achieve even now.
But before you break the goal, you must list the activities required to achieve it. For our software making and selling business, the list of activities could include the following:
- Build a website (we will use this as a selling platform)
- Add content to the website (to attract people and improve our SEO. Blogging is a smart move)
- Build an audience (the people to sell to)
- Create software to sell, etc.
How to Chunk Business Goals
This is very simple. First, we have to choose an activity. Let’s take “building an audience.”
Now we need to understand what’s involved in the chosen activity. I have found that asking “how” or “what” helps (choose what makes the most sense). In this case, I will ask “how we will build an audience.” Here are my answers:
Answer 1: Build an email list of 50,000 people. How will I do that? By allowing them to download a free software in exchange for their emails addresses.
Answer 2: Build a following on Facebook of 50,000 followers. How will I do that? By hosting competitions where those who like our page will win a software.
We can then chunk the tasks (which are also mini-goals). We could say, “By the end of this month, we will get 100 email subscribers. Now that goal is small and won’t take long to achieve. At the same time, it will still be building to the same goal of 50,000 subscribers.
Step 3: Take Stock of Your Resources
Goals just don’t get achieved. They take resources. So before you get anything in motion, know the resources you will need. The activities you will do will tell you what these resources are.
For example, to build an email list, what will you need?
To create software, what will you need?
Mainly, you will need three resources – money, labor, and time.
You will use the money to buy equipment and for other capital-related expenses. The labor will provide the skills and manpower needed to carry out each task. And time simply refers to how long you will dedicate to your business. This is especially crucial if you have another job.
How to Know If You Have Enough Resources?
Most people start businesses with inadequate resources. And needless to say, this leads to failure.
How do you ensure that you have enough resources?
One way is to create a budget. Money is the most important resource. And how you manage it also matters.
Ideally, you need to make a budget for at least 3 years. This budget must show your spending on a yearly basis. Considering that budgeting is an important subject, learn more about it here.
Step 3: Keep Things in Check
Plans never always go as planned. That’s because you cannot accurately predict the future. You will be living in a different world 30 seconds from now. The same goes for your business. So you need to check your plans to ensure that they are still relevant. That’s one of the keys to achieving your goals.
How to Effectively Monitor Your Business Goals
Here are the steps to follow:
Take your mini goals (ones you will achieve in less than 6 months) and put them in some form of a spreadsheet. The picture below should give you an idea of a spreadsheet that might work.
For example, if the goal was to get 100 email subscribers this month, then I may track weekly. After the first week, I will indicate the number of subscribers I have gotten, which is 22. In the second week, I get 30 more subscribers. As shown in the spreadsheet, it means I am now in the third week.
How to Review Your Business Goals Properly
After a goal has reached its deadline, you need to review how well you did.
Did you get the 100 email subscribers as you had wanted? If yes, you should part yourself on the back and start working on the goal again. This time, you may even dial up the challenge to 150 subscribers if you believe you were lenient the first time.
If you failed to achieve the goal, then you will need to figure out why you failed. The best way to figure this out is by asking the 5 Whys. This picture from Buffer shows how to use this.
Uncovering the root of the failure will enable you to deal with what kept you away from success. And you will be able to revise your goals as necessary.
That is how you can set business goals that are guaranteed to be achieved. So follow this guide the next time you are creating goals. And if you have already created them, revise them following the tips in this article. If you found the article helpful, be sure to share it with your friends. And when you are done with that, you can ask me questions or anything you have in the comments.
Latest posts by Victor (see all)
- Three Brilliant Ways to Make Your Online Business Stand Out (and Increase Profits) - October 10, 2017
- Cure Entrepreneurial Burnout before It Kills You or Your Business - September 30, 2017
- How to Set Business Goals that Are Guaranteed to Succeed - August 25, 2017