It’s a good time of the year to “take stock” and look back at how your small business has performed during the previous twelve months. And it’s a good time to look forward and make plans for the coming year. Goal setting – defining business objectives for a future time period – is a critical step in the planning process.
It seems that the most successful small business owners and entrepreneurs are also the best goal-setters and planners. Goal setting is how smart business owners transform lofty ambitions into concrete results. On the surface, goal setting may seem easy to do. But like many things in life, it’s a skill that takes time and practice to master.
Here are some tips to help you improve your goal setting skills.
Set long-term goals first – Small businesses often set goals within a couple of time-frames: long-term (also referred to as “horizon” goals) and near-term. Generally, long-term means greater than one year and near-term means less than one year. Long-term goals focus on business achievements within the firm’s planning horizon. Because of their longer time-frame, these goals tend to be broader and often are not as detailed as near-term goals. Long-term goals should be developed before near-term goals, with near term goals crafted so that accomplishing them will move the business closer to its horizon goals.
Follow the SMART guidelines –Chances are you’ve heard of the SMART approach to goal setting. The SMART guidelines are as popular as they are because of their practicality and simplicity:
- Specific – Goals should be written in precise, well-defined terms, rather than use ambiguous wording.
- Measurable –Write goals so you can measure your progress in numeric or “yes/no” terms.
- Achievable – Goals should be challenging, but not impossible to reach.
- Realistic – Well-written goals are not “pie in the sky,” but are grounded in reality.
- Timely – Goals should specify a target date or time-period for their completion.
Set a manageable number of goals – If a few goals are good, then more must be better, right? Not necessarily! Some people get carried away with the process and end up with an unwieldy number of goals. If you have too many goals, you may end up spending too much time just monitoring your progress. Having too many goals can be distracting and you risk not accomplishing much of anything. Having a few well-conceived goals will allow you to focus your attention on what’s most important.
Put your goals in writing – Don’t set and keep goals in your head, get them down on paper. There’s something about recording goals and putting them in writing that makes them more formal and meaningful. Once they’re in writing, it’s easier to share them with others (if necessary) and it’s less likely that you’ll “forget” them.
Revisit goals regularly – Don’t set your goals in January and then wait until December to see how well you’re doing. Revisit your goals periodically – monthly or, at least, quarterly – and monitor your progress. Doing so allows you to make mid-course adjustments, if needed. Or you may find that you have to revise a goal for any number of good reasons.
Management theorist Laurence J. Peter (developer of the Peter Principle) is quoted as saying, “If you don’t know where you’re going, you’ll probably end up somewhere else.” Good goal setting will help you and your business end up where you want to be instead of somewhere else.