Achieving business goals is no easy task. Most often, businesses achieve results by identifying goals and setting timelines for reaching those goals.
What are your business goals, why do you want to achieve them, and what are you doing to reach them? These are essential questions for you as an entrepreneur and your small business.
What if you could see a roadmap ahead of you to achieve your goals faster?
We’ve built a new framework to help you achieve your business goals and make your life easier as well.
This 7-Steps framework makes it easier for you to set realistic goals, identify specific steps to get you there, and track your progress along the way.
Table of contents
- What do business goals mean?
- Why are Business Goals Important?
- You Need Reasons to Achieve Your Goals
- How to achieve your business goals? (7-steps Framework)
- 1. Start with setting up your business goals?
- 2. Define the strategy to achieve your goals?
- 3. Create a clear action plan to reach your business goals?
- 4. Do you have measurable key performance indicators?
- 5. Work hard to reach your business goals
- 6. Measure and celebrate your progress
- 7. Evaluate your business goals
What do business goals mean?
First, you must understand that your business goals are part of your business planning process. With their help, you want to describe what your small business expects to achieve throughout the specific period.
Your business goals are simply the future of your business. You say what you want to achieve based on analysis, look into the future, and work hard to achieve what you want.
What do you need to do before you start defining your business goals?
Before you think and write down your business goals, you will need to know what is most important for your business to improve. You can achieve this if you use some of the following techniques:
- Market research. Start with market research. Market research aims to discover your customer’s needs, market trends and changes, and, most importantly, competition. Be careful when you research to see things in the market from different perspectives. You can achieve this through several market research methods.
- SWOT analysis. Conduct a SWOT analysis to identify your business’s strengths, weaknesses, opportunities, and threats. Here are four easy steps that will help you conduct a SWOT analysis using this template.
- Benchmarking. Before you continue developing the business goals, you need to better research the competition in your industry and compare the results with your own business.
Why are Business Goals Important?
In my experience, too many entrepreneurs manage their businesses without specific business goals and a clear achievement process. But, there is one thing that correlates with all of them. They are running an average small business and, in some cases, a micro business. Their companies don’t grow, and they put all their efforts into surviving and maintaining the status quo.
But you are an entrepreneur who wants to grow the business with exponential speed and steps. So, here we will take all the necessary things you need to do.
Business goals are here to help you to achieve strong business growth. Because of that, setting up business goals is an essential part of your entrepreneurial journey.
You need to understand that you will not lose anything if you have business goals and a clear process to achieve them. With goals, you will have a clear direction for where you want your business to move and a framework that will help you measure results.
Here are some of the most important reasons you need to have business goals.
1. Business goals give you clear directions on where your small business needs to go
Assume that you have a business goal related to the profitability of your business. So, you have a goal that requires your company to increase its profitability by 20% in the next year. When you have a written goal, you can quickly start brainstorming ideas about what you need to do to achieve this goal.
For example, you will analyze your sales numbers and costs to measure the profitability level of each of your products and services. You will check how is the ratio between profit and expenses. If this rate is the same, even if you increase the income by 20%, you will not increase your profitability. All of these things can bring you clear step-by-step directions about what you need to do to increase profitability by 20% next year.
2. You will have a clear framework to measure the progress of your business
Successful entrepreneurs always try to achieve their business goals so they improve and grow their businesses. If you don’t have goals, you will not have a subject that will need to be measured. For example, if we continue with the earlier case of increasing profitability by 20% from the start, you know what you need to measure.
If you continue to break down this measurement, you will come to more specific subjects of measurement you will need to measure to see how your business progress. So, you will probably measure the results from the activities you implement to achieve this goal on the weekly, monthly, and quarterly levels. You will also measure the costs and income continually. So, your business goals will hive you.
3. You will have strong organizational coherence when you have clear business goals
If you have clear business goals, then everyone in your company will understand what your small business is trying to achieve and what their role will be in these achievements.
For example, the sales manager will know what she needs to do to increase the profitability by 20%. Also, the marketing department will have a clear understanding of its role. If the achievement of this goal requires substantial cost reduction, everyone will know what they will need to do and why it is necessary for the company. If all employees in your small business know and understand your business goals, it will be easier for them to do the work they need to do.
You Need Reasons to Achieve Your Goals
Everything that we want to achieve has reasons for that. You can’t find a person with goals without specific reasons to achieve those goals.
As an entrepreneur, you can aim to increase profit in your business. You want to use that profit to grow your business, develop new products and services, buy new technology, etc.
The more reasons you have to achieve your goals, the probability of achieving goals will be higher. Because in such a way, you will put effort into accomplishing everything that you will need to achieve such goals.
There are, and always will be, some reasons we do something. Higher reasons in quantity and quality will mean that we will be more committed to doing what we need to do.
How to achieve your business goals? (7-steps Framework)
Ok, until now, you already have enough background to start setting up your business goals and work on achievement. You know what you want to achieve, and you know what you need to do to achieve what you want to achieve.
So, it is time for real work to make your business remarkable. Here is a simple but robust framework to set up and achieve your goals.
1. Start with setting up your business goals?
One of the most critical questions I get from small business entrepreneurs related to business goals are the following:
- How can I set up my business goals?
- What are measurable goals for my business?
- What are SMART goals for my business?
- What are the most critical goals for my business?
Let’s try to answer these questions.
How to set up your business goals?
You can set up your business goals by following these action steps:
- Write your business needs in a spreadsheet based on the analysis you have made previously and your dream about your company’s future. For example, I need to invest in new product launches to stay at the top of my competition.
- In the second column, translate each business need into actionable elements. For example, I need to increase my profitability to invest in research and development, improve my income, and decrease my costs.
- Be sure that your list is as small as possible. You don’t want to lose yourself in a bunch of stuff you can not manage.
If you want, you can learn more about how you can design a new product development process in your company.
SMART business goals
When you already have a list of your possible long-term and short-term goals, you need to check are they something measurable. Measurable business goals are goals that you can easily measure relating to the progress you are making with all of them. For example, if your goal is to decrease your business costs this year by 30%, you have a specific number that you can measure and compare to see if the measures you implement help you achieve this goal.
You can achieve this if you start using SMART goals from the beginning. So, your goals must be specific, measurable, achievable, and time-limited.
Results from research by Edwin Locke and Gary Latham on the effects of goal setting on performance show that:
in 90% of the studies, specific and challenging goals led to higher performance than easy goals, “do your best” goals or no goals.
So, if you have more specific and challenging business goals, you will be more motivated to achieve them.
What are the most critical business goals for my company?
The most important goals you will need to set up will depend on the current situation in which your company operates. But, as a general rule, I can recommend the following:
- Profitability. Profitability is essential for your small business because it will enable you to invest in more significant business growth in the future. On the other side, if you have goals related to your profitability, you can continuously monitor your costs and income.
- Customer satisfaction. Another important goal for your small business is customer satisfaction because your company depends on its satisfaction. So, the question you will need to answer here is: How will you satisfy your customers?
- Productivity. How your company is doing the most important things regarding the resources is essential to your business success. So, having goals related to productivity is vital for you.
- Business growth. You want to succeed in your business to grow fast and with giant steps. So, how will you grow your business?
- Competitiveness. If you are competitive in the market, your business will be better than your competition. So, having goals related to your competitiveness is vital for you and your small business.
2. Define the strategy to achieve your goals?
In many small business companies, the strategy, or the strategic planning, is not in place. It doesn’t mean that you don’t need strategic thinking if your company is a small business. I have seen many small business owners not providing sufficient attention to strategic thinking or developing an appropriate longer-term vision for the company.
Having strategy is essential for your small business because strategy development will help you to see broader things inside and outside your small business. Your strategy will need to cover your long-term goals, followed by short-term goals.
With all the planning and tactics execution required to achieve your goals, this is one of the most challenging parts. But, with some careful thought, you’ll be able to make sure that the plan you put together is as strong as it needs to be to succeed. Once you’ve done this, you can begin defining the metrics, milestones, and targets you will need to hit to reach your goals.
If your goal is to increase conversion in your sales funnel, the first step is to understand your customers’ goals, such as going from point A to point B. Once you’ve determined those goals, the next step is to strategize the path that takes your customer from point A to point B. This may mean finding a new customer, getting the customer to interact with your brand or product differently, or converting a current customer. You need to figure out who your ideal customer is, how they’ll behave once they’re in your sales funnel, and how you will get them to convert.
3. Create a clear action plan to reach your business goals?
According to research by the Statistic Brain Research Institute, 42% of people never succeed in achieving their goals, 17% infrequently succeed, and 41% usually reach them.
The action plan is a process that your company will use to define actions that will ensure the achievement of your strategic goals. This plan will help you to implement action steps and monitor the status of the implementation, proper allocation of resources, and decision-making based on the performance results.
Usually, according to my experience, action plans, in many cases, are missing. If they exist, they are too much broader, without specifics to monitor and measure the goals’ implementation status and achievement. Such action plans are limiting your company. You will not develop the required KPIs to measure the success of the actions.
You need to focus on results to achieve your business goals. In such a way, you will include the following performance measures in your action plans:
- The current or actual measure for each activity;
- The expected outcome is a specific measure after the implementation of each activity. This is important if you want to implement a continuous improvement process and see what brings results and what does not bring desired outcomes.
4. Do you have measurable key performance indicators?
Performance measurement is the foundation for improving your business operations and achieving your business goals. You should measure the difference between realized performance and desired performance. If they are different, then there is a gap that you should fill with the improvements. For example, if your goal is to process 500 clients per day, and your business capacity can process only 300 clients, you will need to focus on the following:
- Process improvements
- Employees education
- New employees
Key Performance Areas. KPAs are areas of your business success factors and improved small business performance. A KPA contains one or more concrete KPIs related to a specific area. For your small business, the first step is to define goal areas and success factors on the KPA level.
Key Performance Indicators. KPIs are quantitative or qualitative measurements that reflect the company’s business success factors and strategic performance. You can define different KPIs related to the achievement of your business goals. If one of your goals is “increase profitability by 20%,” you can use the following KPIs:
- Sales growth – per department, per employee, per spend dollar, etc.
- Reduction of costs – per department, per employee, per spend dollar, etc.
If your goal is to reduce production time, one of your KPIs will be to measure the average supplier’s delays and variations.
5. Work hard to reach your business goals
Because now you have all the framework elements to achieve your business goals successfully, it is time to start working on implementing your action plan. You already have the strategy and action plan with action steps, responsibilities, time frame, and KPIs. So you can quickly start implementing one-by-one action steps.
6. Measure and celebrate your progress
You have developed your KPIs, so it is easy to measure your achievements by measuring and analyzing the results. You can use weekly, monthly, and quarterly measurements to ensure everything is moving as it needs to.
Celebrate your milestones and progress with your team members to motivate them to work hard to accomplish your business goals.
7. Evaluate your business goals
Now, the question is how to evaluate business goals. You set them up, implement action steps, and now the question is, are their achievement bringing desired results for your company? In this step, you need to reflect on your previous steps and see what was right and wrong in the process. This action step aims to help you improve your next setup and achievement of business goals. So, your business will enter into the cycle of continuous improvement.
Frequently Asked Questions for Your Business Goals
Business goals represent the way you look at your business in the future. How will you go somewhere if you don’t know where you need to go? So, the goals will help you develop and then achieve your business’s future in a way you want to achieve.
Before developing your business goals, you must conduct market research and learn more about your targeted customers. Then conduct a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats, and compare yourself with your competition.
Set your business goals, starting with your business needs based on the analysis you have made, and be sure they are SMART goals. Think about profitability, customer satisfaction, productivity, business growth, and competitiveness. Then define the implementation strategy and action plan with measurable key performance indicators. Lastly, implement your action plan, measure and celebrate the success and evaluate your goals.