Please note: the sound on this recording is a little low, you may wish to listen through headphones.

The next Business Vision activity within the business planning process, is to decide on the goals you have for your business. 

Creating 3 to 5 goals for your business up front can help focus your business activities from day 1. Targets help you see what areas of your business are priorities, and then plan how you are going to reach them. Good goals with target dates and measures also help see how successful you are over a period of time. If you don’t hit your goals, you can then adjust either the goal itself or use a different measure as you learn more about your business. 

Learning via goal-setting also helps you readjust your overall business strategy if necessary. Maybe, you may need to expand your operational space sooner than you anticipated or reduce your products or services. Maybe you’ll need to increase or decrease pricing or upgrade equipment sooner than you thought. 

Although your goals should be timebound ie to be achieved by a certain date, its also important to note that goals can be changed as you learn more about your business over the first few years, and can adapt as necessary. Like everything else in the business planning process, the goal creation and tracking process is often fluid. 

We’ll talk about how to construct a good goal in a moment, but first let’s look at categories you can consider when setting business goals. 

Business goals are generally developed from within the following categories: ​

  1. Money eg cashflows, profits, expenses, etc.
  2. Human Resources eg people being employed.
  3. Product or service lines eg the products or services being offered.
  4. Research and Development eg the products or services being developed.
  5. Other Operations eg geography, equipment, buildings, software, etc.
  6. Marketing eg website, branding, advertising, etc.
  7. Stakeholders eg Customers or clients, Partners, Board Members, etc. 

This is certainly not an exhaustive list and don’t feel you need to have a goal for each category, but this is a good place to start if you are struggling or lacking inspiration. 

In terms of the number of goals to shoot for, usually, it’s more useful to have 3 well-constructed and achievable goals than creating an overwhelming list of 20 or so. 

But, again, the number of goals you have is up to you and your particular business model. 

​Now let’s look at how to shape those goals. 

You may have heard of SMART principles for creating goals.​

SMART is an acronym comprised of the following words: 

  • ​Specific or Stated
  • Measurable
  • Action Oriented
  • Realistic
  • Timebound or Timely

Sometimes you’ll find these words are a little different (as indicated in the slide), depending on which source you are using. Regardless of slight differences of expression, SMART goals help you create targets for your business that make sense for you, your staff, your clients, and your bank balance. 

Whether you decide to use this goal setting method or not, it’s certainly useful to consider it. And, if you are looking for financial support for your business, it’s worth remembering that the majority of financial institutions will be familiar with goals being described in this manner.

​Let’s take a closer look at what these words mean in the context of setting goals, then we’ll look at some short examples. 

Specific or Stated is a reminder to describe the goals in as much detail so that they are not wishy-washy. So that you can revisit them later and know exactly what you meant. Their specificity also creates boundaries for them, so that you can maintain your focus on the thing that really matters and not drift off into something else. 

A Measurable goal is one that you can you can put a number to in some way. Maybe specific amount (increase or decrease)? Maybe it’s the speed with which you take action? Maybe it’s a percentage or ration improvement or decrease.  Maybe it’s to do with some sort of quality variable? 

Action oriented gives the goal a focus you can take to move forward with it. Starting the goal with a verb tends to give that action. Examples may be: to improve, to refine, to increase, to decrease, to locate, to develop, to earn, to reach, etc. 

Realistic is about setting your boundaries around the goal appropriately. Is this goal likely to be achievable within the time span you’ve given it? It’s no good having a goal of earning a million dollars a year within a year of making just 10k on your business (unless you are very lucky!). Or perhaps running 20 branches of your business, if you haven’t even got the first one open yet. 

Finally, Timebound is about putting a date on your goal. When do you want to achieve it by? This could and actual date, or it could be a little more abstract like “6 months after opening the doors of my business.” Whereas Timely is more about doing the goal when you need to ie just at the right time to make an impact. It’s up to you what meaning you wish to convey on the T. 

​Let’s put that all together now by looking at some examples of simple SMART business goals and typical start up business may have.

  1. I will sign up 20 regular clients by year end.
  2. We will lease a retail space by year 2 (get out of my basement!)
  3. Tanya’s Telecoms will generate a monthly income, from repeat business alone, of $3000 by month 6 after launch.
  4. My business will generate an annual turnover of $200k by 2025. 
  5. 5 new product lines will be launched by the furniture department next year (2022).

Take a look at how these goals do against the previous list of SMART parameters. Can you reword them to be more SMART? I can see a few improvements are needed. 

The very last thing to consider when setting goals is to think about how you will measure whether or not they are being met. 

Here are a few thoughts. 

Monitoring whether or not you are reaching, or have reached, your goals tells us whether: 

  1. Our goals are realistic
  2. Our goals are appropriate
  3. Our goals are useful, in terms of motivating us to reach targets and improve our business model. 

If we are failing to reach our goals, and we check in with them regularly – maybe quarterly or in an annual strategy session – we have time to amend them and course correct. 

So what ways can we use to check that our goals are on course: 

  1. Client feedback. Are we meeting our promises, turnaround times or delivery, or returned items, or customer service requests. 
  2. Inventory. Do we have the items on our shelves we think we should have if we are meeting our targets? Are we selling more or less of something? Did we anticipate it would be popular or not? 
  3. Marketing response. Are we getting hits on our website, views of our posts on social media, new orders (are we attracting the right clients). 
  4. Cashflow. Are our income and expenses on target? How much are needing to reinvest in the business? Do we have any bill outstanding? 
  5. Staff Turnover. Did we lose staff over the last period? Why? 

There are many other ways to look at the health of our business so keep adding to this list, and then see how you can apply this information to your goal-setting process. 

If, in year one, I have an unexpected increase in income for example, but I lost more staff than I anticipated, what does this tell us about a goal to “Add 10 more staff members in Year 2”. Perhaps it tells us we need fewer staff to meet our targets? Perhaps it says we can make an even better income if we staff up to our goal? Or perhaps it tells us we can afford to give our staff a pay raise because we cannot retain them! 

In the next video we’ll change tack and start to gather together the information we need to have about our key products or services. 

 

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