No matter the size of your business or the stage it’s in, goals can help you take it to the next level or, at the very least, to a better level. The key for business owners is to set goals that are achievable: goals that make you reach to greater heights, but not ones that are out of reach altogether. And to find focus. This is where the SMART framework for goal setting comes into play:
S stands for Specific
Most biz owners will say that they want to generate more revenue this year – and who doesn’t, right? That’s a great goal but, unfortunately, it’s not specific enough to make it achievable. It’s like saying “I want to lose weight” but not specifying how much and then chasing the dream until one day, you and your scale disagree, and it’s off to the Oreos again.
But I digress…
A specific goal would be to say that you want to increase revenue from home appliance sales by 25%, electronics sales by 35%, and extended warranties by 50%. To achieve this increase in revenue, you will offer a higher commission percentage to each member of your sales team who meets a specific sales threshold and a bonus to those that reach a specific number of extended warranty sales along with their product sales.
Now, you’re saying “I want to lose 10 pounds every three months.” Specific, and aligned with a timetable.
Specific goals can also help businesses that are in trouble. Instead of looking to increase revenue, maybe your goal will be to win back 50% of the customers you lost in the previous year. Your plan will be a direct mail campaign inviting your previous customers to return to your store using special discounts codes, events, and sales.
M stands for Measurable
To be able to monitor the progress of your goal achievement, you will need to be able to measure it. If you can’t measure it, it should not be a goal. It’s like setting a goal to attain inner peace – it’s a nice thought, but how will you know you’ve made it?
To measure the above mentioned goal of increasing revenue in specific departments, you will need to collect your sales figures from last year and then calculate what the figures to reach this year are for each department. To help your sales team get motivated, send out a weekly newsletter showing the current sales figures or keep the latest numbers on a whiteboard in the sales room.
Also note that not all goals can be measured by number. Maybe your goal as a small business owner is to gain more credibility and exposure by speaking at a major industry event each year or publishing a book. Those would still measurable goals, and still easier to measure than inner peace.
A stands for Attainable
Of course, your goals will never be achieved if they are not seen as attainable. If your business consists of more than just you as the business owner, make sure that those in charge of meeting specific goals agree that the goal is something that can be achieved and that the rewards (if applicable) are enough to motivate them to achieve them.
If you’re the lone ranger in your biz, make sure that YOU believe your goals are attainable. If you doubt them, then you’ll never achieve them.
R stands for Relevant
When creating a goal, always keep your business model and customers in mind. If your business is well-known for being the best independent home of appliances and electronics, you wouldn’t want to set a goal around selling kittens. While this is an almost absurd example, it should drive the point home that your goal needs to fit your business. Otherwise, you aren’t likely to achieve it. Because who goes to an appliance store to get kittens….
T stands for Timely
Last, but not least, your goal must be set within a specific timeframe. You likely know from personal goal setting that if you say, “One day, I will…” that it’s probably not going to happen.
You need to create deadlines such as, “By the end of the first quarter, we expect to see…” and similar. While increasing revenue by the end of the year is a timeframe, you will want to set smaller goals for shorter time periods in between to keep people (including yourself) on track. Otherwise, you’ll feel like you have all of the time in the world to achieve it – until December rolls around.
Ready to start setting SMART goals for your business? Here are some additional resources to get you started:
- SBA Time Management for Small Businesses – This worksheet helps you learn more about time management within a small business and includes a portion on SMART goal setting.
- The Ultimate Guide to Small Business Goal Setting – This collection of articles covers everything from getting started with goal setting to staying motivated.
- SMART Goal Examples – Here, you will find examples of broad versus specific goals that align with the five steps of SMART goal setting.
Finally, once your goals are in place, it’s time to achieve them! Create a development action plan with help from this article, and you’ll be well on your way.