We all need our dreams. They give us hope and a reason to keep going when times are hard. But you can’t wrap your arms around a dream. To get there from here you need concrete and practical steps that will move you in the direction of fulfilling your dream. As you begin to plan for the coming business year, set aside some time to think about what you want to achieve, what you need to do to make that happen, and how you will measure your progress throughout the year. Let’s learn about setting goals!
Be SMART when Setting Goals
Once you’ve determined what you want to achieve in the coming year, select two or three major goals that focus on those outcomes. A true goal needs to be more than just a wish or idea. It needs to be concrete and fully defined.
An often-used method for creating meaningful goals is the SMART approach. It aims to result in goals that are practical and doable. It is made up of the following components:
Specific — The goal needs to be stated as specifically as possible. For example, to set a goal to increase revenue or profit is too vague. You need to specify an amount, such as to increase revenue to $1 million for the year or to increase profit to 20 percent.
Measurable — You must be able to measure your progress toward the goal. In the examples above, the amounts are measurable. A goal could also be measured in time. For instance, you could set a goal to document all the firm’s policies and procedures by the end of the first quarter.
Achievable — The goal needs to be realistic. If you set your goal too high, you will only get discouraged and fall back on doing things the way you’ve always done them. Small amounts of real progress will get you to your ultimate goal faster than trying to accomplish too much at once.
Relevant — The goal needs to be meaningful in the context of where your business is today and what business conditions are likely to be for the coming year. Is this the right time to undertake this goal? Are you the person best qualified to achieve it? Do or will you have the resources to accomplish the goal?
Time-bound — The goal cannot be open-ended. As in the examples given above, you may set a goal to be accomplished by the end of the year, by the end of a quarter or semester, or by the time of a particular event. A time limit helps to motivate you to take steps to accomplish the goal. It, too, needs to be realistic and achievable. Time is also another element of the goal’s ability to be measured. You can track your progress week by week or month by month.
If you need help with formatting your goals, you will find lots of useful information and examples online.
Develop action plans
Once you’ve generated your SMART goals, you will want to create an action plan for each of them. An action plan is a list of steps or tasks you need to accomplish to achieve your goal. Action plans can vary, but in general they include the following:
- A list of tasks required to achieve the goal. When you have identified the tasks you need to perform, prioritize them in a way that works for the type of task they are. For instance, a task could be prioritized by urgency, by its importance to reaching the goal, by time or sequence of events, by dependency on another task being completed, etc.
- Allocation of resources. What resources (financial, human, time, materials or equipment) will you need to accomplish the tasks? Where will those resources come from?
- Deadlines and milestones. As with the overall goal, you need to set a time limit on when each task will be accomplished. You also want to track your progress toward completing the task.
- Measurement and monitoring. How often will you monitor your progress on each task and on fulfilling all the tasks? How will you know when the task has been accomplished?
As with SMART goals, you can find a lot of information as well as templates online.
Focus on what is most important
In addition to setting goals and creating action plans to move the business forward in a meaningful way, you need to keep an eye on the factors that have the greatest impact on the firm’s success. Those might include the level of revenues and profit, number of committed projects, number of new and repeat clients, and cash flow. Essential drivers of business success are sometimes referred to as key performance indicators (KPIs), because how they register and vary throughout the year tell you a lot about well the business is performing. You’ll want to determine which are most important for your business and monitor them regularly.
It takes time and commitment to establish, act on and monitor goals and key indicators. But studies show that those business leaders who do have higher rates of success. Whatever dream you have for your business, you’ll realize it faster and more completely through good planning and measurement.