Characteristics of successful entrepreneurs: A step-by-step guide to creating SMART business goals
December 28, 2015
Setting goals – and meeting them – is an important way for business owners to grow their business. There’s a tried and true method for setting effective goals, and it’s SMART. That stands for goals that are specific, measurable, attainable, realistic and time-driven. Here’s what that means.
1. Be specific
Your business goal should address the ‘what,’ ‘when,’ ‘where,’ ‘why,’ and ‘how’ of what you want to get done. Suppose you are an architect who wants to win more jobs. Instead of making a general goal, such as ‘I want to win more jobs,’ create a specific goal. By answering each of the five questions, you’ll have a specific goal.
- What : at least 8 new contracts
- When: within the next 12 months
- Where: within 50 miles of my office
- Why: to increase revenue and add to my portfolio
- How: by forging relationships with local builders, asking previous clients for referrals, and advertising in the local newspaper.
2. Set measurable goals
You won’t know when you’ve reached your goal if you can’t measure what you’re trying to accomplish, so measurement is an important part of goal-setting.
If you want to sign a certain number of new clients in a year, break it down into the number you need to sign per quarter or per month in order to reach your goal. That way, you can adjust your strategy if you find you’re not on track to get to your goal.
3. Your goal should be attainable
Business owners are optimistic by nature – it’s a big part of their success. But your goals need to be attainable if you hope to achieve them. The key to creating an attainable goal is to strike a balance between challenging and impossible. If your goal is too easy or too difficult, it’s not motivating. Increasing sales by 10% at a business that’s just introduced a hot new product is not challenging. But doubling sales of a mature product is not attainable.
4. Be realistic
Setting a realistic goal is a lot like setting an attainable goal, but it’s not exactly the same. When considering whether your goal is realistic, think about the impact that reaching that goal will have on your business. For example, if you are a virtual assistant and business is booming, you may want to set a goal of acquiring 25 new clients in the next year. But if you do that, you may not be able to manage the workload, especially at peak times. So, while this goal may be attainable, it may not be realistic.
5. Set time-bound goals
Setting a time-driven goal will keep you on track for success. Be sure to take into account your business cycle when determining time-bound goals. If your business is seasonal, and you want to increase sales by 10% next year, look at your results compared to the same period last year. As long as your monthly sales are up 10% from the same month the year before, you’re on track.
Setting goals for a small business doesn’t come naturally to everyone, but following these guidelines will help. And attaining those goals will help your success as an entrepreneur.
To help protect everything you've worked hard to build, don't forget to check out the small business insurance options available to you.