When you set your business goals as a business owner, you provide yourself with a clear vision that will always lead to business success when you pair it with persistence. The action of setting business goals helps you, as a business owner, to make better decisions and measure the step by step progress of your business. However, setting goals is not a simple task. It can be quite difficult to simplify the business idea in your head; to present it in a concise manner that you can always refer to whenever necessary. In this blogpost, we will provide you with pointers to define your business goals using the SMART principle while leveraging KPI metrics.
Defining Your Business Goals
Your business goals are the foundation of your business strategy. These goals describe where you want your organization to go and the results you hope to achieve. You should note that your business objectives are different from your business goals. Objectives provide the actionable steps to reach your goals, while your goals in themselves are the roadmap that guides the action of the entire organization.
Effective business goals have quantifiable targets, are aligned with the company’s vision, are achievable with the available resources of the company, and have deadlines that ensure accountability. Let’s talk about these qualities in detail.
The SMART Equation
The SMART equation is simple. S+M+A+R+T= Effective Business Goals. When your goals have all of the variables of the SMART equation, your chances of success as it concerns your business increases. What are these variables?
- S stands for Specific
Your business goals must be specific. This way, you’ll avoid irrelevant ambiguity and people can clearly understand what you want to achieve.
Don’t Say: We will improve customer service and user experience.
Say: We will achieve a 90% customer satisfaction rate by the end of Q4.
You should note that your business objectives are different from your business goals. Objectives provide the actionable steps to reach your goals, while your goals in themselves are the roadmap that guides the action of the entire organization.
- M stands for Measurable
Apart from making your goals specific, you need to set up criteria to measure their progress. That is, try to incorporate quantifiable metrics like percentages and revenue figures when you set up your business goal.
Don’t Say: We’ll boost website traffic
Say: We’ll increase monthly website visitors by 50% within six months, growing from 10,000 to 15,000 visits.
- A stands for Achievable
You should set goals that challenge your team but are not too difficult or complicated to achieve. If your goals aren’t achievable, you will most likely demotivate your employees and burnout as a result. If you currently generate 50 leads per month:
Don’t Say: We will generate 100 leads in the next five months
Say: We will increase this number to 70 over the next six months.
- R stands for Realistic
You must always consider your available resources, budget, and personnel whenever you set your business goals. It is good to be ambitious, but being overly ambitious can overcomplicate your focus.
Don’t Say: We will host several random promotional events
Say: We will host two product launch events in key cities by year-end to strengthen brand awareness and support our sales strategy.
- T stands for Time-Bound
When you set your goals, make sure to give yourself a deadline for achieving that goal. By setting yourself up with a deadline, you hold yourself accountable to your goal and you’re more likely to be disciplined. Without a timeline for your goals, you will more likely procrastinate on them.
Don’t Say: We’ll reduce our operating costs very soon
Say: We’ll cut operating costs by 15% within the next nine months by streamlining internal processes and renegotiating supplier contracts.
Effective business goals have quantifiable targets, are aligned with the company’s vision, are achievable with the available resources of the company, and have deadlines that ensure accountability.
The SMART equation allows you to objectively define your business approach and shows you clearly where you need to improve. Once you have the SMART equation locked down, the next thing you want to do is get some knowledge about the specific KPIs for your business.
Let’s talk KPIs.
KPIs: What are They?
Simply put, Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively your organization is achieving its goals. Think of KPIs like you would a compass—they provide you with real-time insights into the direction your organisation is going. With KPIs, you can easily know if your business goals are being achieved or not.
Specifically, KPIs help you to:
- Track the Progress of your business goals and objectives
- Highlight the aspects of success and challenges, thereby showing you where you need to tweak to better improve the chances of business success.
- Assign measurable targets to employees. This way, everyone has a clear idea of what they need to do within the organisation.
Examples of KPIs include monthly revenue growth, profit margins, cash flow, Net Promoter Score (NPS), customer satisfaction rate, customer retention rate, average production time, defect rates, supply chain efficiency, website traffic, conversion rates, and/or social media engagement.
In order to make your KPIs impactful to your business, they must align with your goals; they must be quantifiable; and they must be relevant. If you want to know more about KPIs, you should look forward to our exclusive blogpost on KPIs. In that post, you will learn all you need to know about how to use these impactful tools to grow your business.
Conclusion
You need to always define your business goals if you want to achieve organizational success. By using the SMART principle, you can create structured and actionable goals that align with your overall strategy. Moreover, when you utilise KPIs to track your performance, you will be able to maximise your ability to make informed decisions to guide the development of your business. ValueGate Consulting can help you define your goals and guide you on how to grow your business. You should contact us now and see your business grow.
