Business goal setting

Making goals is something we all do, whether that be in our personal or business life.

From deciding that we’re going to read one chapter of a new self-help book per day, right through to increasing turnover by 50% or more.

The problem is that most of us never get around to actually writing these goals down and making the plans and adjustments necessary to attain them.

“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”

Pablo Picasso

Hardly surprising then that 92% of New Year’s goals (i.e. resolutions) fail by January 15th! This and other stats can be found in this article by Alex Mace.

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What Are Goals?

At the most basic level a ‘goal’ is a desire, objective or outcome you wish to achieve. For example, losing a few post-Christmas pounds, running a marathon, increasing income.

The trouble is, unless you write these objectives down and give yourself a timeframe and a methodology to achieve them, they are basically just desires/dreams.

People with written goals are 50% more likely to achieve than people without goals.

Not only that but you need the will power and management team to actually get the job done. You can have the best plans known to man but you absolutely need that management team, a.k.a the right people, to make it happen.

This also means hiring the right people.

Currently the most commonly used methodology for goal setting is SMART – an acronym for:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Timely

We talked about this in the article What Are the 5 Main Elements of Managing Employee Performance?

Targets and goals will obviously change and develop over time, often dependent on the success (or otherwise!) of previous goals.

For example, if you set an outcome of increasing turnover by £10,000 in Q2 but managed to achieve this by Q1 then you would consider imposing a higher target for Q2, maybe £15,000 or even £20,000.

It’s equally possible that expectations may have to be revised downwards.

The point is, it’s vital to continually revisit goals, to tweak, adjust or even entirely re-evaluate them in line with actual progress. There is little more demoralising than consistently missing out on achieving goals and targets.

Be prepared for things to change, have contingencies in place to mitigate them and don’t get too upset if you don’t reach the goal first time around; it doesn’t mean you’ve necessarily failed; it doesn’t mean the goal or target was unachievable; it might be the goal was too ambitious or that circumstances, the market or market conditions changed during the period.

We speak more below about what might impact your goals but a familiar quote springs to mind: “The only constant is change” so be prepared to re-work your plan if necessary.

Keep the end vision in view, even if that seems tricky at times.

Remember, success is rarely linear; even the most profitable and successful people, entrepreneurs and businesses will have experienced ups and downs.

Business success trajectory
Business success trajectory

Short-Term Goals

Breaking your goals down into time related chunks makes them more achievable…remember the ‘T’ in the acronym SMART relates to time.

Short term goals are generally defined as those which can be achieved within two or three months but this very much depends on what it is you’re planning: sales targets (how much growth?), new recruits (how many people?), learning a new skill (is two months realistic to learn coding, part-time, from scratch?). So make sure your goals are also realistic.

“Dream big dreams, but never forget that realistic short-term goals are the keys to your success”

Mac Anderson

If we look at the example of increasing turnover used earlier; increasing turnover by £1k per week for a quarter could be classed as a short-term goal.

Breaking it down under SMART shows the target is:

Specific – £1k per week

Measurable – income is trackable

*Achievable – you have researched/verified this is possible

Relevant – increasing turnover is VERY relevant to business success

Timely – you have set a deadline

Setting the goals isn’t the end of the story though!

If they aren’t *achievable, if you haven’t put the plans in place to ensure the increase in turnover is possible then no matter how amazing your goal setting is, you will never reach them.

If it was simply a case of coming up with the targets and following through by setting them down in writing, we’d all be successful. You need to have a framework in place to ensure that the target, in this specific instance increasing turnover, can be met.

That may mean employing an extra salesperson, paying overtime to production operatives, putting in more hours yourself – even putting up prices. Give yourself the best possible chance of success and do not rely on chance.

Medium-Term Goals

A short-term goal is achievable within a few months, a medium-term goal however is designed to take several months to up to five years to reach fulfilment.

Increasing your turnover (the short-term goal mentioned above) may cause you to set another goal to relocate to larger premises within five years. This would be classed as a medium term goal.

Similarly, an increase in personnel, a revised remuneration package, internal organisational change and reducing production costs via economy of scale, would also fall under the banner of medium-term goals.

Your medium-term goals will often be set as a result of achieving short term targets – in fact they are often driven by the achievement of short-term goals. Think of the chicken and egg scenario – could a relocation be achieved without increased turnover: would a relocation work without increasing staff? Everything is interlinked so make sure your goals are too.

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Long-Term Goals

As the name suggests, long term goals are those which will take many years to come to fruition – usually between 5 – 10 years.

Planning any more than 10 years in advance is notoriously tricky (at least without a crystal ball or a time machine) but that’s not to say you can’t set such long term goals – especially in terms of an exit plan for example – just be prepared to continually adapt and adjust to take account of changing situations.

“If the plan doesn’t work, change the plan but never change the goal.”

Unknown

Long term goals can be achieved by using a series of short- and medium-term goals as stepping stones along the way to the end point. Breaking down your longer-term targets into a series of smaller (and thus more achievable) steps is a great way to ensure your ultimate success.

How to Go About Goal Setting

The obvious start is to know where it is you want to end up!

Have a clear goal (or series of goals) in sight. For example:

  • Increase turnover by £xx
  • Increase ROI by xx%
  • Increase sales by xx%
  • Become the go to supplier by 2030
  • Hand over the running of the business by 2035

The easiest way to arrive at goals is to simply sit down and write down ALL your personal or organisational dreams and aspirations for the next 10 years or so (personal and business) – it doesn’t matter how far fetched and impossible any of them may seem and at this stage you don’t need to work out how you will achieve them. Just write them down.

Once you have your list – it may contain only a few items or it may be pages long – it’s time for a brainstorming session to refine some of the ideas lurking in your mind. If you have a management team this may be a good time to bring them in.

There’s lots of different ways to brainstorm:

Mind mapping can be extremely freeing and useful. Start with the goal or target, write it on a large piece of paper and surround it with a ‘bubble’ then simply jot down anything that comes to you (or your team) when you consider the initial idea. This could be words, images, other ideas.

Brain dump – similar to mind mapping but even less structured! Simply write down anything and everything that comes to mind.

List making – focus on one goal at a time and create lists of what may be required to achieve it – including breaking it down into smaller steps and goals.

A useful way to look at goal setting in your business (and personally) is to use the ‘staircase’ method to figure out the necessary steps.

Start with ultimate GOAL – let’s say to achieve a £million turnover within 10 years – put that as your top step.

The bottom step is where you are now – £250k for argument’s sake.

Then work out how many steps you will need to reach the top stair, the goal of £1million.

Each of these steps can become a goal along the way to achieving the end result.

Goal setting staircase method
Goal setting staircase method

“It’s better to be at the bottom of the ladder you want to climb than at the top of the one you don’t.”

Stephen Kellogg

Strategy vs Tactics

Once you know where you want to end up it should be easier to work out how to get there. As previously mentioned, you may have to make several corrections along the way and even your ultimate destination may change slightly but you have an end goal in sight.

What you need to achieve the end objective are strategies and tactics.

Now, the words ‘strategy’ and ‘tactic’ are often used interchangeably but they do however have very distinct meanings. Tactics are the actual means used to attain an objective, while strategy is the overall plan.

To put it more succinctly, tactics are short term actions whereas strategy is the long-term vision. Strategies may have to change and adapt to take into account external influences, whilst tactics are mutable and will change to reflect your strategy.

In our example of increasing turnover, the strategy is the overall plan to increase income; the tactics employed to do this could be any number of things from price rises to employing more people to buying another business and these will change depending on their success factor.

What Might Scupper These Plans?

It doesn’t matter how fantastic your strategy and planning towards your overall objective is – there are always outside influences that could affect the achievement of your goals:

  • Governments change and with them so do tax breaks and benefits, minimum wage levels etc.
  • Climate change is increasingly affecting businesses with fuel price hikes, green initiatives etc.
  • Access to finance may become difficult
  • Competition in a sector may increase
  • New technology could render products/services obsolete
  • Cultural tastes change.

This is why you must continually reassess and re-evaluate goals and be prepared to change direction if necessary. Nothing is ever really set in stone in the business world and a failure to change could result in a failure to succeed. Think about Kodak, Nokia, Blockbuster and Polaroid (amongst others) whose failure to adapt to a changing world ultimately led to their demise.

“When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps.”

Confucius

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Short, Medium and Long-Term Plans with a Career

Whilst we’ve concentrated mainly on goal setting in a business environment, it would be remiss not to point out that short, medium- and long-term goal setting can also be applied in a personal career development sphere.

Creating a personal development plan takes time but we go about it in a similar manner. Consider yourself a little business (or a big business of you prefer).

Maybe you want a career change or there are specific reasons you have to change path.

Take becoming a partner in a firm of accountants as an example:

Becoming a Chartered Accountant and a partner may be the long-term goal but to get there will take several steps; the necessary ‘A’ Levels; University degree; a job; completing the ICAEW exams etc.

Just as with a business, external influences along the way may force changes in direction. Failure to get high enough grades initially may mean an apprenticeship route instead of University, but with the ultimate goal in sight the tactics change but the destination is the same.

Use the SMART goals, the Staircase method and do some brainstorming of your own to work out how to get to where you really want to be in 10 years’ time!

“Dreams are extremely important. You can’t do it unless you imagine it.”

George Lucas

Goals

In business and life goals are what drive us to succeed.

We all need something to aim for to keep us focussed and feeling alive. That includes businesses.

But a goal that is not written down nor supported by any sort of planning is basically just a dream and, whilst we can all dream of bigger things not all of us actually achieve them.

“Some people dream of success, while other people get up every morning and make it happen.”

Wayne Huizenga

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