Goal Setting for Small Business is a big deal. Understanding where you are and where you want to go sets up your business for short- and long-term success. In this article we'll go over 5 points to keep in mind when setting your goals for the future.
- Lack of Goals and Hindered Growth
- Creating Work-Life Balance
- Setting Attainable Goals
- Prioritizing Goals
- The Trap of Goal Setting
Founding Father Ben Franklin has been credited with the statement “If you fail to plan, you are planning to fail!” The truth of this statement is especially evident in relation to goal setting for small businesses. However, it’s also important to set attainable goals to ensure that they become actual achievements. It is equally important to understand when and how to prioritize goals when it’s impossible to accomplish everything right away.
Lack of Goals and Hindered Growth
The human brain is wired to solve challenges and work through obstacles. Tangible goals allow the brain to work at its optimal capacity, and achieving goals provides a sense of satisfaction and accomplishment. Likewise, employees perform better when they understand what is expected of them. Goals provide concrete direction for employees to pursue.
By contrast, an absence of goals often translates to a lack of direction, even in the most passionate entrepreneurs. There may be a flurry of activity, but not much actually gets accomplished. Employees may become frustrated because they don’t know what management wants — or they get the impression that their efforts don’t meet some unstated standard.
Creating Work-Life Balance
Especially when a business or entrepreneurial venture is in launch phase, goals often focus on profit and material gain. That’s understandable, and it can be satisfying to finally be able to make payroll or be able to meet all of your company’s invoices for the month if you’ve been struggling to cover start-up costs, or worse, you’ve been hit with an unexpected expense that threatens to blow up your entire enterprise. However, focusing only on money and profit-related goals often leads to burnout and ultimate failure.
Instead, strive to set a balance between work-related goals and the other areas of life, including family, friends, partners and enjoyable hobbies or pastimes. The optimal work-life balance varies from person to person and may even change over time. That’s OK. What’s important is that the goals you set for your work and your life are fulfilling and satisfying for you.
Setting Attainable Goals
There is much to be said in favor of aiming high in setting goals for your business or entrepreneurial enterprise. In their book Built to Last, Jim Collins and Jerry Porras wrote about the merits of setting “Big, Hairy Audacious Goals (BHAG)”. Setting such aspirational goals often inspires extraordinary achievement. One such BHAG was stated by President John F. Kennedy in 1961 when he challenged America to aspire to sending astronauts to the moon and returning them safely to Earth before the end of the decade. Although he did not live to see it, his BHAG became a reality when Neil Armstrong stepped on the moon on July 20, 1969 — and his capsule indeed returned safely to Earth.
However, there is a danger in setting unattainable goals. One risk is burnout. Another hazard is the risk that frustration will set in and eventually lead to lethargy. Instead, business goals should strive to be viable and SMART: Specific, Measurable, Achievable, Realistic and Timely. (Not to be confused with OnDeck’s SMART Box)
The best goals are specific, realistic and potentially achievable. It’s not enough to say “I want my business to turn a profit.” Instead, set an attainable goal, such as “I want to increase my company’s revenues by X percent by midyear,” where X is a realistically attainable figure based on past performance and the capacity of your company and its resources.
You should also provide some tangible measure to determine whether your efforts are effective. For instance, a measurable goal would be to strive for a year-on-year increase in revenues from the first quarter of the previous year to the first quarter of the present year.
Finally, goals should be timely. Set a reasonable time frame for achieving your ultimate goal. For many goals, one year is a reasonable time frame. However, it’s also wise to set incremental time frames, for instance, quarterly or monthly. Determine what reasonable progress toward the ultimate goal would look like at each incremental time frame. Doing so serves two purposes. First, it’s easier to remain on track and second, viewing progress at interval goals provides tangible evidence that progress is indeed being made, which reduces frustration.
In many small businesses, everyone is expected to wear multiple hats. There is often an “all hands on deck” atmosphere that can be exhilarating. However, when people are expected to pursue too many goals, the unfortunate outcome is that people become focused on “checking off” items on a goal list rather than actual accomplishments.
A smarter course of action is to acknowledge that, while it may be desirable to achieve every goal, it is often unrealistic to expect that they can or should be pursued at once. Instead, it’s essential to prioritize certain goals for immediate attention while scheduling others for a later date. Do not confuse prioritizing goals with procrastination, which often occurs as a result of feeling overwhelmed by the impossibility of accomplishing all of a specific set of goals.
The Trap of Goal Setting
As essential as the process of goal setting is, it’s important to remember that setting goals is not a magic bullet. Otherwise, the danger exists that goal setting becomes an end unto itself. Even the most worthwhile goals represent just the beginning of the process — execution is still necessary in realizing those goals.