The Importance of Setting SMART Business Goals
1. Determine exactly where your business is and how it compares.
Get a clear understanding of how your business is performing compared with others in your area and in your industry. Where do you feel like your business is strongest and weakest? Or, in the same vein, what areas present themselves as the best opportunities — or threats — for your business?
Not sure where to find business data in your market and/or industry? The federal government — through the Small Business Administration, the U.S. Census Bureau and the Bureau of Labor Statistics — actually houses a lot of the data for which you might be looking.
2. Use your responses from Point One to form SMART business goals.
Now that you know how your business stacks up against the rest, you can begin creating some SMART business goals. SMART is an acronym that stands for specific, measurable, achievable, relevant and timely.
Let’s quickly go through what each mean for you.
Specificity refers to those goals that clearly state what you’re setting out to do. They work best when you use action words. Example: We will add five customers to our loyalty rewards program.
Measurable goals allow you to use data to see how close or far away you are from achievement. Example: I will measure progress by tallying up by month how many new rewards program users we have compared with the current amount.
Achievable goals ensure that what you want is within reach and realistic. Example: We’ve averaged five new customers signing onto the rewards program a month, but there are high and low months.
Relevance assures that the goal is helping improve your business in some regard. Example: Customers signing onto a rewards program will mean that they are more likely to return to my store, increasing the bottom line.
Timeliness puts an end date on your goal. It will help you stick to the task at hand. Example: We will add five new customers a month to the rewards program, tallying a total of 60 for the year.
3. Break up the big picture into smaller steps.
You’ve got that great idea, and you’re already excited about the ways in which it could really help out your business. But, then you get to thinking about how you’re going to get there, and the process seems difficult, herculean even.
Know, though, that the biggest goals can be accomplished by quite a few smaller tasks. In fact, it’s best if you lay out the steps that will get you on the path to achieving those business goals.
To use the example above, if your end goal is to increase the amount of customers in your loyalty rewards program, you could have smaller objectives of ensuring your employees are trained and well-versed in your rewards program and its benefits, offering an incentive for new customers to join, easing the process of adding the rewards account to an online purchase and creating a tiered program to reward those who spend the most money.
4. Set a timeline and deadlines.
For some, putting a deadline on something adds a little more pressure. Don’t let it though. Setting timelines — particularly with the smaller targets — can keep you on track to not just meeting them but also that bigger picture goal.
5. Monitor how you’re doing throughout the year, and adjust as necessary.
Setting goals isn’t a set-it-and-forget-it kind of thing. It will require monitoring throughout to see how far along you are and to learn what may or may not be working. If you notice that one part isn’t performing as well as you’d like, find out why that’s the case and make some adjustments for improvement.