Business goals

How to set business goals

A smart CEO understands the inherent value of goal setting to steer a growing business in the right direction. Unfortunately, figuring out exactly what the right direction is – and the roadmap to get there – isn’t so straightforward.

More than 80% of 300 small business owners polled in Staples’ recent 4th Annual National Small Business Survey said they are not following their business goals, and 77% have yet to achieve their vision for their business. business.

While the statistics are bleak, they should make sense: Setting business goals involves a fair amount of soul-searching into what makes your business work and what you want its future to be. Devoting the time necessary to do this can be difficult in a struggling economy, but your goals will be more attainable and effective if you do so.

“You have to know what you’re looking for and do it with your eyes wide open,” says Francisco Dao, founder and president of The Killer Pitch, a Tarzana, Calif.-Based company that helps businesses and entrepreneurs refine their message. , and former business coach and columnist for Inc. “Look at yourself in the mirror and ask yourself what it will take to reach your goals.”

here is Incroadmap of. to define (and achieve) business goals.

Set Business Goals: Determine Your Long-Term Goals

Start by distinguishing your long-term goals from your short-term goals. Your long-term goals should have a horizon of about three to five years, says Maria Marshall, associate professor at Purdue University in West Lafayette, Indiana, who has conducted research on small family businesses.

They should articulate your business mission statement, reflecting the reason your business was founded. “When you think about why the business is there in the first place, goals take on a whole new meaning,” says Bill Baren, business coach and founder and president of San Francisco-based Bill Baren Coaching. “There is more energy behind them. They don’t feel pressured.”

Marshall says that these types of visionary goals generally fall into four broad areas: service, social, profit, or growth:

Marshall compares each type of goal to a vacation destination and the short-term goals and objectives that you then set as a roadmap to getting there.

To emphasize the distinction between long-term and short-term goals, Baren suggests using different language. “Think of a long-term goal as an initiative,” he says. “If you constantly call them goals, people will say they’ve heard it before. [To them,] it will be like a marathon. Sometimes a goal has to be positioned as something bigger. “

If you are thinking really big, you might want to consider creating a BHAG, a “Big, Hairy, Bold Goal.” The term coined by James Collins and Jerry Porras in their 1996 item “Building your vision for your business” —refers to 30-year game-change goals, like Sony trying to change the global perception of shoddy Japanese products.

Dao also cites the example of Boeing who built the 747. “They were all in,” he says. “If that didn’t work, Boeing would go bankrupt. BHAGs aren’t impossible, but the company had better bet the farm.”

No matter how long you want to achieve for your long-term goals, be aware of how quickly they can change. Lori Becker, founder and CEO of Boston-based education publishing company Publishing Solutions Group, says she’s a fan of the five-year goal, but the current economy and some major changes in her industry have left her behind. have forced to reassess. “Instead of a few years, I’m now looking quarter by quarter,” she says. “My goal is just to make more money than I did last year.”

Dig Deeper: Francisco Dao on making goals inspiring, not illusory

Set Business Goals: Create Short-Term Goals

Now that you’ve figured out what you want in the long run, you need to figure out how to get there. Marshall recommends a simple way to think through your short-term goals to achieve your long-term goals. Make them SMART:

Specific. To work, goals need to be concrete (not as abstract as your long-term goals) and very detailed.

Measurable. Put a number or value, such as a dollar amount or a percentage, on the goal.

Action oriented. Explain what actions need to be taken by which people and when.

Realistic. Set difficult goals for yourself, but consider your resources so that you can achieve them in a reasonable way.

Time specific. Set a deadline to keep things on track.

“You have to understand what the long-term goal means on a daily basis,” says Dao. “How do you set the goal at its most basic level?” If I want to increase sales by 24% per year, how many new customers or orders per day is that? “

Short-term goals should ideally have a much smaller timeframe. “Growing sales by 24% per year is a pretty big figure,” says Dao. “But increasing sales by two percent each month seems very doable.”

Break down specific actions to be taken by specific people, assigning a responsible person to each department involved and to help motivate employees.

Perhaps the most important part of these short-term goals is to tie them to the long-term goals. Because you’ve already identified these long-term goals, it’s easier to see how focusing on seemingly insignificant details can be a step toward achieving a larger long-term goal.

For example, one of Becker’s long-term goals is to keep costs and overhead under control. When she saw that she was paying over $ 1,000 a month for pay-per-click color prints on her publisher’s copier, she invested time to understand why the fees were so expensive. It turned out that employees were unnecessarily printing emails with colored blue hyperlinks. Becker has therefore made it a priority to reconfigure each computer so that it prints in black and white by default.

Baren suggests that inspiration and responsibility are also two essential elements in turning goals from the abstract into reality. “Responsibility without inspiration is like a prison sentence,” he says.

“The objectives are not separate from the culture of the organization,” he continues. “It’s no accident that has over $ 2 billion in revenue. They’ve created a culture of caring: When they ask their employees to do something, they do it. “

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Set business goals: solicit employee input

You may have a clear vision of where you want your business to go, but motivating employees to look in the same direction as you is also crucial. So instead of starting a top-down initiative, try co-creating goals with employees.

“It is really important that your employees join enthusiastically,” says Baren. “Everyone feels like they have some ownership of the goal, as opposed to [the CEO acting as] a dictator mandating something. “

Once you’ve asked employees to help you create your goals, get everyone on the same page. “We are very communicative and very active,” says Becker. “Know what your neighbor is doing, you can help each other. She holds meetings on Monday mornings and Wednesday mid-week check-ins to keep each of her employees on track.

“Even a very good boss can’t see everything,” Dao said. “Get feedback from the people running it on the front line. “

Dig Deeper: Achieving business goals requires constant communication with employees

Set business goals: stay organized and focused

The reality is that a growing business will have more than a few goals. This is when vigilant attention and a commitment to the organization comes into play.

For example, Becker keeps checklists of his short-term goals and also uses programs like Microsoft Excel to track them. Every Monday morning, she checks the status of her goals. “I don’t want to forget about long term goals because so many little things can come up during the week to distract me,” she says.

It may be wise to tackle one goal at a time. “If you lose your focus, it’s like getting off every exit off the freeway,” Marshall says. “You have to choose very carefully which exits you want to take, in order to maximize your strengths and minimize your weaknesses as a business.”

Dig Deeper: How Important Is Goal Setting For Small Businesses?

Set business goals: be consistent

Another problem that can arise when you have many separate goals for your business is the possibility that they may conflict with each other.

“Companies will say they want 100% customer satisfaction,” Dao says, “but they will also want the highest margins. Customer service is expensive, so it won’t happen. You must choose. Look at the big picture. “

Also look for a situation where you are unintentionally preventing employees from achieving a goal.

Dao cites the hypothetical example of a company that wants to improve customer service ratings, but has a large automated phone tree before customers can speak to a real person. “By the time they’re at the fourteenth level, customers are already pissed off,” Dao says. “How is this guy they’re finally talking to going to get customer satisfaction down to 10 when he can’t do anything about the system?” “

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Setting Business Goals: Creating a Culture of Appreciation

An important (and often overlooked) part of the business goal setting process is rewarding the employees who actually work to achieve those goals. It is not always a financial incentive.

“You hit a set of goals and the next day you hand out a new stack of goals to work on,” says Baren. “What happened to a simple thank you and celebrating what went well? If you work long enough at a company where it isn’t practiced, the motivation starts to fade.”

Dig Deeper: Building a Culture of Appreciation