Running a successful business requires resilience, patience, and strategy. Many entrepreneurs struggle with the latter, particularly with effective goal setting.
As an entrepreneur or business owner, you’ve probably set goals that you hope to accomplish. Most likely, you set short-term goals that you hope to reach soon. As a startup, you might have set goals that will help you during this stage of your business’s life.
I’m sure you’ve put a lot of thought into the goals you want to accomplish. But have you ever thought about separating your goals by the type of goal? Specifically, which ones are quantitative and which are qualitative? By knowing the difference, you may be able to reach both types more quickly.
In this article, you’ll learn more about the two main types of business goals you can – and should – set for your company.
Effective Goal Setting
It’s not enough to launch a business with just a vague idea of what’s on the horizon. Even the most meticulous planners among small businesses often fail to succeed simply due to ineffective goal setting and a lack of follow-through.
Not only is it critical that you set clear and reasonable goals for your business, but it’s equally imperative that you manage progress throughout the process of meeting those goals. That means going the extra mile to track achievements your employees make toward company projects. Individuals are 42% more likely to achieve goals when their progress is physically recorded. As a business owner, you can’t afford not to seize that opportunity.
The act of goal setting can seem intimidating at first. To make things easier, start by separating your business’s primary goals into two distinct categories: Quantitative and Qualitative. Reducing these goals into “bite-sized” pieces will simplify the process for both you and your employees.
Using the S.M.A.R.T. Method
One tried and true goal setting technique is the SMART method, which simplifies goal setting and makes it more manageable. SMART in this case is an acronym, used to guide individuals when setting goals in such a way that makes them easier to achieve. Here is a breakdown of the SMART acronym:
S (Specific)–When setting a goal, be as specific as possible. For example, instead of setting a goal to “increase sales”, look a little deeper. How much more of an increase are you aiming for? Where will the sales come from? Who will be responsible for the increase? Questions like these can help narrow down each goal, making them easier to target and track.
M (Measurable)–Quantifying your goal, or putting it into numbers, drastically improves progress. To make your goal measurable, you should implement milestones as part of an overarching progress plan.
A (Achievable)–Setting an extremely ambitious, borderline-impossible goal may sound exciting, But you could very well be planning to fail. For the sanity of yourself and your employees, make a point to set goals that are reasonable.
R (Relevant)–A goal will only receive the attention and focus it deserves if it’s relevant. This means that any goal you set for your business should be important and related to the industry or in some way connected to success. Setting goals that don’t matter to the core of your company can actually hinder progress and distract employees from more important things.
T (Time-Bound)–Most importantly, your goals need to be constricted by a time limit. This might sound like additional pressure. But in reality, a little pressure is just what you need to maintain a healthy pace of progress.
Quantitative vs. Qualitative: What’s the Difference?
Quantitative goals are goals which are rooted in direct action. These goals are objective and easily calculated using analytics about your business. Quantitative goals center around tangible and measurable units. For example, income, link clicks, leads, and sales. These goals are typically represented by numbers or raw data.
For example, one goal for your business might be to increase the number of sales processed on a monthly basis. If you initially want to see a 20% increase in sales by the end of next month, that is considered a quantitative goal. If it helps, remember that the term “quantitative” stems from “quantity”, referring to a hard number.
When discussing business goals, you’ll find that most people prefer quantitative goals This is because they offer a concrete “good” or “bad” in response to business affairs. These are goals that can be achieved simply by working hard and crunching the numbers- it’s relatively simple.
Qualitative goals, on the other hand, refer to the more abstract side of business. This is where things get a little more complicated. Qualitative goals refer to goals which are subjective and based on results rather than action. These goals are complex in that they can’t themselves be measured, but rather they provide insight into other areas of business.
For example, if one of your business goals is to improve company culture, that would be considered a qualitative goal, because it’s subjective and cannot strictly be measured. However, that doesn’t mean it isn’t important. To set a qualitative goal, you’ll need to add extenuating criteria which indicate success.
Expanding on the example of improving company culture, your qualitative goals should be those which reflect positive changes in workplace engagement. Using resources such as feedback sessions, associate retention, and attendance rates, you can surmise whether your company culture is heading in the right direction.
The most difficult aspect of setting qualitative goals by far is deciding what conditions indicate success. Because of the abstract nature of these goals, they are often overlooked in favor of their “hard facts” counterpart. However, qualitative goals are equally important in setting your business up for success. Taking the easy way out by neglecting these growth opportunities could cost you big time.
How They Work Together
A successful and strategic business owner will add both of these types of goals to their professional arsenal. Quantitative goals, although concrete and reliable, lack the same depth and complexity as qualitative goals, which provide their own unique insights, albeit with a little extra work involved.
Neglecting either one in favor of the other will leave your business unprepared and directionless. They work best when used together to form multi-dimensional goals. It’s important to make the best of both worlds in order to see your company succeed.