Setting small business goals is one of the best things you can do to improve the strength of your company and overall odds of success but creating goals in a way that gets results isn’t always easy. We’ll walk you through the basics and cover various goal-setting strategies on this page, so you can start creating effective goal setting on your own right away.
Benefits of Setting Goals
Fewer than 20 percent of people say they write down their goals in vivid detail, yet this simple step makes a person 1.2 to 1.4 times more likely to reach their goals, according to research presented in Forbes. Experts say there’s a neurological reason for this.
Writing things down increases the likelihood that the information will be logged in long-term memory. By encoding it this way, we’re more likely to remember and act on the information. Keeping the visual representation of your goals where you see them daily helps too.
When you have small business goals, you also have:
- A greater sense of direction.
- Clearer focus on what’s important to your small business.
- Greater clarity in your decision-making process.
- More control over your future.
- Increased purpose and motivation to reach your goals.
- Greater personal satisfaction.
4 Effective Goal Setting Tips for Small Businesses
Once you’re ready to set small business goals, these four tips will simplify the process and increase the likelihood of meeting them.
1. Remember There Are Many Types of Goals
It’s helpful to think of your business objectives in a broad sense before deciding what goals to set. There are three main types: outcome, performance, and process. Work with all three to achieve your overall goals or big-picture goals.
Outcome-Related Goals
Most people think of outcome-related goals at first. These relate to the end of an event or the “win.” It’s usually easy to create outcome goals and identify when they’re met, but factors that lead to success with outcome goals aren’t always in your power. For example, a small business owner might set a goal of opening a second location but stall out in the purchase or financing process.
Performance-Related Goals
It’s a little easier to find success with performance goals because most of the factors involved are within your control. For example, maybe you want to increase sales by 20 percent this quarter. You can increase marketing and advertising, launch a new product, expand your business, or do other things to help ensure you reach your goal.
Process-Related Goals
Process goals relate to addressing strategy, workflow, and other areas that can help you reach your desired outcome. For example, maybe you want your sales team to close more deals. Rather than focusing on the number of deals to close, you might give them process-related goals that will set them up for success, such as contacting five additional leads per day.
2. Consider the 4 Cs of Setting Goals
Another thing to consider before starting to set goals are the Cs. Sometimes referred to as the three Cs or four Cs of goal setting, and used interchangeably, the items covered below can help you frame out goals in a way that leads to greater success.
Complexity
The number of contributing factors involved in reaching a goal impacts your success. Limit the number of working parts to increase your odds.
Challenge
Set small business goals that are a bit of a reach. If you set goals that are too easy, they won’t have the same impact, motivate you as much, or get you excited. It’s easy to become discouraged if you choose goals that are too hard to reach too.
Clarity
It’s also easy to become derailed if the goal or steps required to reach it are ambiguous. Make sure everything you envision and write down could create a clear path for someone else, even if you don’t plan to share it with anyone.
Commitment / Closure/ Completion
Create a full roadmap for your goal with regular check-ins to keep yourself committed and what it will take to meet your goal. You may also want to consider what steps you’ll take if you meet roadblocks along the way and when to reevaluate your goal.
3. Conduct a SWOT Analysis
Short for Strengths, Weaknesses, Opportunities, and Threats, a SWOT analysis helps ensure the goals you set are more strategic in nature. That way, you’re not only more likely to be successful but will conserve resources as you move forward too.
It’s helpful to include others in your SWOT analysis as each person will have a unique perspective and may uncover things you don’t think of alone. Consider enlisting your business partner(s), key employees, mentor, consultant, or close friends and family members.
Doing a SWOT analysis is simple. Just draw a two-by-two grid on a sheet of paper and add a SWOT category to each quadrant. Then, list out items that fit within each category.
Strengths
Create a list of your business’s strengths. These can include things your company does well, resources you possess, tangible assets, or qualities that set you apart from competitors. For example:
- Better pricing.
- More features.
- Bigger network.
- Larger team.
- Loyal customers.
Weaknesses
Create a list of things that make it difficult for your small business to be competitive. This may include resources you don’t have or things your company lacks. For example:
- Lack of capital.
- Low brand awareness.
- Inadequate supply chain.
Opportunities
The opportunities section should include external things your business can take advantage of to gain a competitive advantage. For example:
- An emerging need for your products or services.
- Lack of competition.
- Underserved markets.
Threats
List things that have the potential to harm your small business in the threats section. For example:
- New regulations that impact your small business negatively.
- Changing economic conditions.
- Changes in consumer behavior or attitudes.
4. Use the SMART Goals Framework
The SMART Goals framework is one of the most popular methods for setting goals. The letters stand for Specific, Measurable, Achievable, Relevant, Timebound. Use it in conjunction with the above steps to build out goals to increase odds of success.
Specific
A goal that’s specific includes a variety of details such as:
- What’s being accomplished.
- What steps are involved.
- Who is responsible for each step.
Measurable
Make sure it’s clear when you reach the finish line by quantifying your goal. For example:
- Boost sales by 20 percent.
- Open a second location.
- Have each sales rep reach five new prospects per day.
- Have each sales rep close one deal per day.
Achievable
The Cs are helpful when you consider what’s achievable. Is the goal you’re setting within your reach and control? If not, select a different goal.
Relevant
Consider your big picture. How is the goal you’re setting now contributing to it? If it’s unclear or doesn’t flow into the big picture, select a different goal or adjust it so it does.
Timebound
Decide what the cutoff point is for your goal. It’s a good idea to have both short and long-term goals. Your big picture is likely is a long-term goal or several long-term goals. The short-term goals feed into it.
Get the Working Capital You Need to Meet Your Goals
If a lack of working capital is holding your small business back from meeting its goals, invoice factoring can help. It’s like getting an advance on your unpaid B2B invoices. To learn more or get started, request a complimentary rate quote from Charter Capital.
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