Each year as a business owner, it’s important to carefully review the year behind you, set goals for the coming year, and develop an actionable plan to achieve those goals.
As you create your plan for the coming year, be sure you are doing so with realistic and achievable goals in mind. It’s fine to aim high, reach for the stars and wish for things like a 500% revenue increase, but if your company showed an increase of 10-20% for the past three years, setting goals like that are probably unrealistic and ultimately will leave you with a sense of failure throughout the year.
Earlier this year I read an article on Inc.com, that articulated it so well, "Build a plan that's ambitious enough to inspire but practical enough to be implemented".
In other words, create realistic goals, but also remember to enjoy the success as you reach milestones and celebrate the small wins throughout the year. In doing so, you will find yourself reinvigorated and even more motivated to move on and tackle the next goal to reach.
If your efforts to set goals for your business have failed before, don’t worry. Read on for a quick guide on setting goals for the new year.
Setting S.M.A.R.T. Goals for Your Business
Regardless of the size and scope of your business, your goals should meet certain criteria. The S.M.A.R.T. criteria will give your goals a direction and help you align your business plan with realistic targets for the year.
The five components of a SMART goal are:
· Specific
· Measurable
· Achievable
· Relevant
· Time-Bound
Let’s see each component in depth below.
Specific Goals
Each goal should be focused and specific. Vague statements are meaningless in this context, so focus your goal as tightly as you can. For example, you might set a specific revenue goal by the end of 2020 for your home business.
To set specific goals, you have to be clear about what you're trying to accomplish and why.
Measurable Goals
Your goals should be quantifiable. That is, you should be able to measure the success or failure of your goal by using specific metrics. For example, the aforementioned specific revenue goal will be measurable if you set specific revenue figures in your plans.
So a measurable goal would be “I want $450,000 USD in revenues by the end of 2020.
Achievable Goals
If your goal is not realistic, dive in and revise it. You should only set goals your company has a chance of achieving; otherwise, both you and your team will feel like you are behind the whole year.
In the revenue example above, an achievable goal would be a 20% or 30% increase in revenue. Setting a goal for a 500% increase might be too ambitious and derail your entire plan for the year.When setting achievable goals, always ask yourself whether the goal is something your company is capable of doing.
Relevant Goals
Sometimes, goals and plans don’t align with the overall vision of our businesses. When this happens, it’s easier to change the goals rather than change the business itself.
Be sure the goals you set ultimately improve the business, even if it is not monetarily.
Time-Bound Goals
Finally, your goals should be achievable within a specific period of time. In the aforementioned revenue example, the “T” criterion could be achieving the goal within the 2020 calendar year. Remember to look back on your goals throughout the year to monitor your success.
The factor of time will put things into perspective and help you manage your time during day-to-day operations.
Helping You with Setting Goals for the New Year
Here at SmallBiz Ally, we understand that small businesses are the lifeblood of our economy and strive to help them succeed. From getting new clients to building a business plan and setting goals for the new year, we are a small business’s best friend.
With more than 15 years of experience and hundreds of small business consultations, we're ideally positioned to help your small business grow.
Contact us today to find out how SmallBiz Ally can help you take your business to the next level!