The ultimate goal of all businesses (except for not for profit ones) is to earn profit. However, there are various other goals that need to be set by the business that will lead to the attainment of the ultimate goal.
As a business, do you find that at the beginning of every financial year, you set enthusiastic goals but by the end of the year the progress on achieving those goals is less than impressive? One of the key elements that enable goal achievement is effective goal setting. What business owners, whether big or small, need to understand is that direction matters more than speed – so it really doesn’t matter how fast you are going in case you are not going in the right direction!
To set the direction of your goals correctly, you need to make SMART goals. SMART is an acronym for:
Specific, Measurable, Attainable, Realistic, Time-Based
According to the theory of SMART goal setting, effective goals are those that are specific, measurable, attainable, realistic and time-based. An example can help explain this theory in a much better way. Let’s say that at the beginning of this year, your business has decided that the goal is to ‘grow business.’ How can SMART goal setting turn this goal into a better one, into a more effective one, thus increasing the chances of its achievement?
The first thing that needs to be done is to make the goal specific. So rather than having the goal as “Grow business”, it can be made specific by setting the goal as:
“Grow business by adding more clients from the south region on the business’s portfolio”.
Now as a business, you know exactly what you need to do to grow and from which region you need to attract clients to bring about growth for your business.
However, the goal is still not effective, as it needs to be made measurable so you can keep track of it and know exactly how successfully you have been able to achieve your goal. This is how you can make the above goal measurable:
“Grow business by adding five more clients from the south region on the business’s portfolio”.
Now you know exactly how many clients you need to add in order to achieve your goal. But you need to review the goal and determine whether the goal is attainable or not? How do you plan to attract five more clients to join you portfolio? Do you have the resources for it?
If you note down you goal as:
“Grow business by adding five more clients from the south region on the business’s portfolio through networking and by getting more active on the social media”.
So now you know exactly how you are going to achieve your goal and which resources you need to strengthen. The next thing you need to evaluate is whether your goal is realistic or not. What if you are trying to add five more clients in a year which has financial downturns, high unemployment and high inflation? In such a scenario is the goal you have set for yourself too challenging? Vice versa, if the economy is booming, is five too less a number of clients? Make sure your goal is doable without being too easy.
The last thing you need to add to your goal is make it time-bound. Deadlines are quite effective at motivating people to carry on a task till it is completed. So you can set the deadline for your business by saying that your goal is to:
“Grow business by adding five more clients from the south region on the business’s portfolio through networking and by getting more active on the social media, by the end of financial year 2016”.
By following five simple steps, you have made your goal SMART! The above written goal is a classic example of a highly effective one; a goal which has all the elements of a SMART goal.
So make your business goals for the year 2015 SMART and increase the success rate of their attainment!