Every effective business owner or entrepreneur knows that setting business goals is one of the most important elements to become highly successful.
Since a business experiences highs and lows all the time, it is important to look back at your objectives to determine how close you are to them, as well as develop methods and solutions to potential and looming problems.
According to studies by Napoleon Hill, author of "Think and Grow Rich", and other researchers, 95% of successful people have the habit of writing down their personal goals.
Defining and Setting Business Goals
The main goal of every business is to generate profit. However, your goals need to have five unique traits namely specific, measurable, attainable, realistic and time-bound.
The goals of every business will change, depending on the type of industry they are in, the demands of the market, the current condition of the market, as well as other foreseen changes in the economy.
You need to be sensitive about the history of other similar business, as well as have an idea about future events to stay ahead. Too many business owners have failed, simply because they set goals that did not match their own skills, economic situation and resources.
When setting business goals, keep in mind that specificity is important to visualize exactly how you want the end result to be. For example, a general goal is to write down, "I want to become rich or a millionaire after running the business."
A more specific goal would go like, "I want to generate sales of 1 million dollars at least after running my restaurant business for one year." You need to know the exact figures, the type of business you belong to and the extent of expansion.
Some other specific goals include the exact number of branches you wish to have after a specific number of years, the exact number of employees after a year, or the exact number of customers you regularly have on a daily basis.
This aspect of setting business goals is tied up with specificity. You need to have a unit of measurement to determine how close you are to your goals. Defining the demographics of your market, especially the niche market, is important to know how to measure the goals properly.
For example, when measuring financial status, you need to measure in terms of sales per day, expenses per day or overhead expenses per month. When measuring customer service, you can make use of tools such as survey or comment forms and have them rate services.
You will need different units of measurement, depending on your type of business and the scope of the company.
It is never advised to set goals that are almost impossible, since you will most likely burn out before reach a single one.
A good approach is to divide a huge goal into smaller objectives to help you achieve through smaller steps. Always set realistic goals, based on your own personal capabilities, the current workforce and the resources available in the company.
Reading your financial statement will help you gauge the right target sales. Review the business plan and check how well sales did in the previous months, to know whether you should reduce or increase target sales.
Being realistic is intertwined with attainability in the sense that you have to check your current capabilities and resources first, to know the right goals to set.
Check how well the business is doing and do a thorough evaluation before setting business goals.
For example, check how many customers you have or the total sales you generate on a daily basis, then set goals on a daily basis. You have to be considerate about the current situation of the market, as well as the demand for your particular product or service. Develop marketing schemes that will help you make goals more realistic.
Your business can only go on as long as you have enough resources and manpower to sustain it. Goals need to be broken down into a sound schedule, so you can continue to achieve enough support to maintain it for the long term.
It is ideal to set goals on a daily, weekly, monthly, quarterly and yearly basis. Setting very huge goals in a short span of time can lead to unrealistic or unattainable results, while setting very small goals over a long period of time can lead to delay and wastage. Set the task and provide ample time for accomplishment for the business to grow effectively.
Final Word on Business Goals
Setting business goals is included in the first part of your business plan. It is very important that you write these down, especially if you are looking for investors for the business.
You should not start any company without sitting down and contemplating on the goals of the business over at least one full year. You can adjust the goals as you go along and identify the strengths, weaknesses, opportunities and threats.
Constantly be sensitive to the needs of the market and make use of new tools that will help you progress. You should do a monthly business review too, to identify which goals you have already accomplished. After one year, you should recheck and adjust everything.
The business will only continue to progress as long as there are available goals and objectives. Even if your business is already doing good, set new goals and work with the trends. Plan for potential threats and problems in the future also to stay ahead.