Defining the right goals and objectives for a small business will be the first step to start a business and make it successful. Here, our expert explains what you need to do for framing your goals and how you to frame them.
In as much as a business sector has seen young, energetic enthusiasts rejecting the fat paychecks and looking at startups, statistics of success and failure also has breathtaking figures. While the ideas are innovative and the product is well customized to customers’ needs and demands, implementing a plan into real world scenario has its own pros and cons. And it takes both head and heart of the commitment and fulfillment of responsibilities that can help you explore opportunities in the said area. There is an old adage that goes, “Failing to plan is planning to fail.” Setting the goals and objectives for your business is the first and most critical step in the planning process
Good business planning is 9 parts execution for every 1 part strategy.
It is always necessary to fully understand what you are actually striving for. And how do you see yourself achieving it in the near future. Setting out abruptly on a business plan is never a clever idea. While you write your business plan, consider assigning the goals first and then plan your actions and strategies accordingly. No doubts, this will give you a head start. Find few Important things to consider before starting a business.
What is business goals and objectives?
Let us understand what exactly are the business goals and objectives and how should you go about to plan them –
- Goals define your business
- When we talk about goals and objectives, you have to understand that goals define what exactly your business is. There must be a reason you took up the business in the first place, an aim you had been looking up to and by defining those objectives you are setting up a path for yourself.
- Goals reflect your planning
- Not only defining business, but the setting of goals also translate as to how do you plan to achieve the targets- your business strategies and timelines included. You may want to focus on one aspect of the business at a particular time and then other at a different time, depending upon the type of business you are in and the product you are selling. Goals are the narration of your expansion plans for the business in future
- Goals assist you track your progress
- You may have certain goals in mind while starting the business but with time, the changing market trends and the cut-throat competition might drive you to some other track. The pre-defined goals help you maintain discipline and help you evaluate your performance on various attributes important to your organization and industry.
- Goals control your action plans
- You may have set the perfect environment for market and making well in the way, but there is a chance that your company undergoes uncontrollable growth, for which you may not have planned beforehand. Goals help you set the right action plan for each scenario, even in cases of unfavorable market response to overwhelming demand for your product. In cases where you see your business taking a downside, you can very well plan in advance for backup actions and be prepared for tolerance against planned activities on the schedule.
- Goals set your milestones
- By realizing and laying out goals and objectives, you are basically setting timelines for action points. These checkpoints keep your strategy in place and render enough flexibility of plans to act according to the situation.
- Goals reflect strong and weak areas
- It is only when you analyze and understand your business thoroughly that you can establish areas where you are the leader and the ones that require attention. It covers many dimensions, from teaming up with technical and financial experts to enter into contact networks.
Know what to consider while laying out goals and objectives
Knowing what a perfect plan can do is not enough when talking business and you should know the criteria and attributes necessary to goal setting. It has to cover your overall business model and not just financial aspects. Because a company’s evaluation is not measured just in currency but also by how well the business has done to changing market trends and how it has developed alongside making returns. Take a look at these points as you sit down to define your objective and set your targets.
- Plan for short and long term goals
- Keep in mind that planning for 5 to 6 years ahead is beneficial but do not overlook the advantages of realizing short-term goals. What do you plan to cover in these, solely depends on the type and structure of a business you are in. Your targets may be to achieve a certain profit percentage, a particular market share, testing and trying on launching new products or working on enhanced features for an existing product, increasing the spectrum of customers covered, upgrades of your technology etc.
A short-term goal may be a quarter’s target or a half-year plan while long term goals see the business at around 5 to 6 years in a future. So work against these base timescales. This will help you keep your work in alignment. The timelines always push you to work consistently and in a result oriented manner.
- Take opinions at work
- Since you are handling multiple resources, you can miss out on a few areas that are specific to work environment of your organization and mainly affect people you are working with. You should always make a conversation with your staff and invite opinions and suggestions from them while laying down the objectives. If you are taking up a start-up, make a point to consult experts who have known the business; their experience and advice can add valuable inputs to your thought process and help you organize your ideas and plans in beat with the industry trends.
- Communicate your plans
- From responsibility, comes the liability. Acting at the managerial level entitles you to communicate your ideas, plans and goals to your staff. You should take an advantage of this as it not only promotes a healthy work culture but also interaction among all work levels ensures that everyone involved in the business is working in sync to achieve the targets. Interaction with executive level officials makes an employee feel more motivated and included as it helps them understand why they are doing what they are doing and how would it translate to meet the goals set by the organization rather than when they are doing something just because they got orders from the “top”.
- Research has shown that in almost 90% of cases, a good one to one communication system maintained at workplaces improves the attentiveness of the employees while miscommunication or lack of communication has led to drastic results, sometimes even a totally different product than what the organization had plans for rolling out in the market.
- Know your business
- You should understand that every industry is different and that they all work on differing systems. This makes it compulsory for you to know exactly why you set out on your business plan beforehand. You can’t study the market as a whole and make investments. It is your area of interest that requires guidance and analysis. The thrust of entering business have various compelling forces at work, from financial to social to service or even growth of an existing business. You should know your instincts right when you set your objectives and action plans.
- Set goals for every domain
- Your objectives should cover every domain of your industry, from members of employees, suppliers and investors, to every section relevant to your business like sales, management, analysis, financial reviews etc. Even plan to train your employees on a technological level in their role specific domains to keep up with changing technologies in your industry. Every person in their role should feel and stand responsible for the business trends, be it growth or decline. This will render a united team at work, in every section of your organization.
- Recognizing and appraising good work
- While you want people to work hard and smart, be prompt enough to appreciate their efforts. A work culture where one gets recognition for his/her good work, the morale of the workforce is set high and that results in an excellent and consistent workforce. You should work towards creating a healthy workplace, perform routine reviews, and track your feedbacks and work to solve the issues at first hand. People talk to those who listen and can act. Work as to leave a personality effect that you can make decisions and that people can trust in you.
Making sure that your objective is a SMART objective
Setting your objectives is not a one day job; but it does not require complex statistics either. It is just about knowing your work right. A SMART objective is Specific, Measurable, Achievable, Realistic and Time bound.
- Always focus on setting specific objectives. A specific objective is detailed, focused and well-defined. To check if an objective is specific or not, ask yourself if you know what are we going to do, how are you going to do it and who all are going to be involved.
- A measurable objective not only a tracker for completion but also gives us the space for course correction if everything is not falling in place.
A measurable objective is the one which answers the following –
- How to know when this objective has been achieved?
- What measurement criteria to use?
- What milestones to use to track progress toward completion?
- An achievable objective differs from a vision or an aspiration. An achievable objective justifies the time-limit with allocated resources. Make sure that the objective you are setting is not unattainable or it does not add unwanted pressure or frustration to the team working on it.
- You must ensure that the objectives you are setting are realistic in nature. A realistic objective is the one you can achieve with the resources you have in your hand viz. skills, equipment, funding, and team.
Before rolling out a realistic objective, you must answer the following questions –
- Do you have all the necessary resources to accomplish this objective?
- Do you need to rearrange any or some of the priorities to accomplish this objective?
- How will pursuing this objective affect other performance objectives?
- Will this objective help meet the department and company goals?
- Time bound
- A time bound objective has set deadlines for completion which creates a sense of urgency. The deadlines same as the overall objective must e achievable and realistic. If the objective has a higher degree of complexity associated with it, you should divide the objective into smaller parts ad set deadlines for each of these smaller parts.
A time bound objective must stand the test of following questions before you choose to deploy it –
- What is the earliest achievable and realistic date for the objective to be started and to be completed?
- Are there other objectives that must be prioritized above this one?
- Are there other objectives that are dependent upon the completion of this objective?
No business can cover the market the day it enters, and not that you can expect additional returns on your investment in a matter of few days. Business requires patience and passion. Bound timelines to your goals and strive to work for it.
Business goals and objectives example
Nonetheless to say, it is not only business that requires you to set and follow your goals but every aspect of living and working gets affected by discipline. Remember time is money and that it cannot be taken backwards. A taste of success is always pleasant and for that you should be striving with consistent efforts and following the right path. Your goals reflect your ability and also how you yourself evaluate your capabilities in challenging areas. They shape your personality as well when you risk failures and come out with sharpened skills. So, make it your habit of bounding yourself to timescales and reaching out to the destination, no matter how tough the journey may seem. Good Luck.