Take a moment and ask yourself “What are my business goals?” Now, ask yourself if you think you will reach those goals, when you will reach them, and how you know you’ve reached them. If you’re having an issue answering any of these questions, it may be that your goals are not clearly defined.
In previous articles, we’ve written on the subject of setting and accomplishing business goals. We often mention that using the SMART method of goal setting is one of the most popular ways to take a step toward your goal. Specific goals are a crucial component of the criteria. One of the common mistakes made when goal setting is not making those goals specific enough.
In this article, we’ll show you the importance of having specific goals and how to set them.
Understanding Specific Business Goals
The SMART acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound. This framework ensures that goals are not just aspirations but achievable targets. The concept and importance of SMART goals were developed by James Cunningham, George Doran, and Arthur Miller. It was first presented in an article they wrote in 1981 called “There’s a S.M.A.R.T. way to write management goals and objectives”.
Since then, SMART goals have been used by businesses of all sizes, individuals, and institutions to help them reach their desired results. Being specific when goal-setting is one of the most important aspects of this method.
A specific goal answers the question of what needs to be accomplished. It also states who is responsible for different actions. When goals are specific when they are set, entrepreneurs and business owners have clarity on these things. They also know where the process will happen and which resources or limits are involved.
For instance, an entrepreneur or business owner might set a goal to “increase sales”. A great goal to set, for sure. However, making a more specific goal would be to phrase it as “increase sales of Product X by 15% in online sales by the end of Q4.”
On top of all that, specific business goals aid in performance management. They help in breaking down larger strategic objectives into smaller, actionable parts. This makes it easier for employees to understand their roles and contributions. With this clarity, they can see the impact of their work on the company’s broader objectives.
Examples of Specific Goals
There are many types of business goals that can be set. These goals can range from sales, customer service, or operational goals. No matter the type of goal you set, there is an opportunity to create specific targets. Let’s consider some examples to illustrate the concept of specific business goals in various business contexts:
- Revenue Increase: A retail company might set a specific goal to “increase online revenue by 20% over the next 12 months by expanding the digital marketing budget”.
- Customer Satisfaction: A service-based company could aim to “improve customer satisfaction scores by 30% in the next six months by implementing a new customer feedback system”.
- Market Expansion: For a technology firm looking to grow, a specific goal could be to “enter two new international markets in the next 18 months by establishing partnerships with local distributors.”
- Operational Efficiency: A manufacturing business might target to “reduce production costs by 10% within the next quarter by optimizing supply chain management and implementing energy-efficient practices in the production process”.
- Employee Development: A specific goal related to human resources could be to “increase employee skill levels by 25% in the next year”.
These examples showcase how specific goals vary across different areas of business. For leaders, the specificity of each sale, customer service, or market expansion may help to bring those goals closer to becoming reality.
How to Set Specific Business Goals
Setting specific business goals involves a structured approach that starts with understanding the company’s vision and strategic objectives. Let’s take a look at how to begin to make the goals you set more specific.
1. Use the 5 “W’s” and 1 “H”
One of the first things to do when trying to make your goals more specific is to ask the 5 “W’s” and 1 “H”.
If you’re familiar with them, here they are:
You should ask yourself what the goal looks like when it’s achieved and who is responsible for what. If your goal is to increase revenue, how do you know if you’ve achieved it? If your revenue is increased by $100 next month is that a success? Or, is a $1,000 increase a success? Also, who is responsible for making this happen? Knowing the difference is important for the future of your business.
Next, when will the goal be achieved? This question is important so that you know when to adjust or pivot strategies. If you expect to reach a goal in 6 months and by month 5 you are nowhere near accomplishing it, this lets you know it’s time to reevaluate. When making your goals more specific, obsessing over the time frame should not be done. You can focus more on this when you get to the “T” aspect of SMART goal setting since the ‘T” represents that your goals should be time-bound.
You should also answer where your goals will take place and how you will get there. If you intend to increase sales, you should specify if those sales are online or in-store. You should also know if those online sales will be on your website, Amazon, or some other way. It is also a good idea to narrow down which product or service will bring in those extra sales.
Finally, you need to understand the why behind the goal. If you’re not sure, you may want to skip this step for now. However, you will need to address this when using the SMART method as the “R” means that your goals are relevant. Usually, relevance will expose the purpose behind the goals.
2. Understand the Overall Vision
Where is your business going? Asking this question will help you better define your goal in a real way. Begin by ensuring that the specific goals align with the overall vision and strategic objectives of the business. This alignment ensures that every goal contributes towards the bigger picture of the company’s success.
Knowing the vision for the company will help you be more specific about the goals you want to set. If you have a goal of exiting the business in 5 years, the goals you set in year three will be very different than if you expect to own the business for 10 years.
3. Brainstorm All Goals
The journey to setting specific goals begins with a comprehensive brainstorming session. This is a critical phase where all possible goals, no matter how big or small, are considered and documented. During this session, it’s important to encourage creativity and open-mindedness. Be sure to allow every idea to be voiced without immediate judgment or analysis.
This process can involve various people within the business or organization. This includes department heads, team leaders, and even junior staff members. Every one of those individuals may offer unique insights and perspectives.
The key is to generate a diverse and extensive list of potential goals that span across different aspects of the business, such as financial performance, customer satisfaction, market expansion, product development, and employee welfare. This brainstorming process not only aids in capturing a wide range of objectives but also fosters a sense of ownership and collaboration among the team members.
4. Identify the Most Meaningful Goals
Once a comprehensive list of potential goals is established, the next step is to sift through them and identify the most meaningful ones. This involves prioritizing goals based on their relevance to the organization’s overall strategy, mission, and vision. It’s crucial to assess the impact of each goal on the business’s long-term success and immediate operational efficiency. This is especially true when setting strategic business goals.
There are many factors to consider and include. One is the goal’s alignment with the company’s core values. You also need to know its potential to drive growth or innovation. On top of that, ask yourself “Is this goal important in addressing current challenges or leveraging new opportunities?
This stage may require tough decisions. Remember, not all goals can be pursued and accomplished at the same time. The goals you choose to pursue should be those that offer the most significant benefits. They should also be the ones that are most closely aligned with the strategic direction of the business.
5. Research the Accomplishments of Your Competitors
Researching the accomplishments of competitors is an invaluable step in setting specific goals. This research provides insights into what is achievable within the industry and helps in benchmarking the organization’s aspirations. Understanding the achievements and strategies of competitors can highlight gaps in your own business strategy and reveal areas for improvement or differentiation.
This does not mean simply emulating competitors but rather learning from their successes and failures to set goals that are both ambitious and realistic. Analyzing competitors’ performance can also help in setting goals that ensure the business remains competitive and innovative in the marketplace. This research should be thorough, encompassing not just direct competitors but also players in adjacent markets or sectors that may offer transferable strategies or lessons.
6. Try to Include Numerical Values Such as Percentages
Using numbers is a great way to make any goal more specific. The adage is often true: numbers don’t lie. Numerical targets provide clarity and make it easier to track progress and evaluate success.
Including numerical values helps in creating a sense of urgency and focus. It also clearly defines what constitutes success. It also aids in the alignment of resources and efforts, as team members have a clear understanding of what they are working towards.
These numerical targets should be realistic. They should be based on both historical data and forward-looking projections. Also, they should challenge the organization to stretch and grow. However, they should still remain achievable to maintain motivation and engagement among the team.
Making your goals specific will narrow down what exactly you’re trying to accomplish in your business. This clarity will answer a lot of unspoken questions and make it easier to focus. Be sure to visit all of the other aspects of the SMART goal-setting method in order to increase the odds of success for yourself and your business.