Goals provide motivation and direction for your business. While it’s important to set ambitious goals, they also need to be achievable.
A good way to think about goals is to use the SMARTER goals framework. Setting SMARTER goals will help you lead your business without getting caught up in the specifics. Here’s how you can do it:
Rather than setting a general goal like “I want to grow my business,” decide what exactly you want to achieve. For example, are you going to grow your business by increasing sales or by cutting costs? Doing both at the same time could prove problematic.
If you want to increase sales or cut costs, set a financial target for your goal that you can track and measure. For example, you may say, “We will cut costs by 10%” or “We will increase sales by 10%”.
You must have a means of achieving your goal. If you want to increase sales, consider if you can cross-sell or up-sell your products or services. Then, include this means in your goal. For example, “We will increase sales by 10% by up-selling X product to Y segment.”
Increasing sales by 10% may be ambitious, but can your business achieve it? Remember, a stretch goal pushes your team beyond what’s been done before while a realistic goal is based on past performances.
Set a deadline for your goals and work them into your business plan. Typically, quarterly business goals work as they’re not so long away that they feel unachievable, and you can track them alongside your financial reports. For example, “We will increase sales by 5% during the first quarter through up-selling X product to Y segment.”
At the end of the quarter, review your SMARTER goals and consider how you’re progressing
against a financial target. You can do this using up-to-date financial information paired with business insights from your team.
Once you’ve evaluated your progress, adjust your goal for the coming quarter by doubling down on what works and abandoning what doesn’t. You should also inform members of your team about any changes to a SMARTER goal so they work on what matters most to your bottom line.