Why are SMART Goals Important for your Business?

When looking at setting business goals using the SMART goals methodology, you can clearly plan business objectives and the improvements you want to make. Using these goals, you can track and reflect on the progress of your business. Although setting SMART business goals is a simple method, it is effective for analysis and reflection. 

We will break down the SMART acronym and give different examples of ways this method can be useful for business goals.  

What does SMART stand for?

Specific

Precisely state what it is you want to achieve with a clear goal statement that explains how and why you are setting this business goal. Ensure this is detailed enough so it is easier to define if you were successful. Make sure you understand what achieving that specific goal means for both the business and for you personally. By making the goal personal and attaching some emotion, you are less likely to lose sight at the first obstacle. There is a great phrase around this, ‘The universe will conspire to give you the lowest interpretation of your goals’. To put this in context, if the goal is to have more money, you could walk outside tomorrow and find a penny on the floor, great news is you’ve achieved what you set out to do! But, by making it really specific you are more likely to achieve what you actually want as opposed to accepting what comes.

Measurable

To track progress and measure the result of your goal. You should be able to understand from this measurement if the goal is achieved, and if you’re on target to achieve it. If you have a goal to achieve 12 sales in the next 6 weeks, then break that down into 2 per week so you can easily track if you are going in the right direction and achieving your revenue targets. For example, to increase profitability by 40% by the end of the 3rd quarter of the financial year. So think: “how will I know if the goal I have set has been achieved?”

Achievable

Make sure your outcome is achievable. When setting a goal, you must consider if it is possible to do this within the time and budget you have. Assess if successful, what impact will this have on your line management, employees and customers. Be mindful that a goal has to stretch you, there must be a challenge. If something is too easy you’re less likely to value the outcome and therefore more likely to underachieve. However, if the goal is more difficult to achieve, you will have to learn and grow to achieve it. If the worst-case scenario happens and you miss the target, at least you have grown and know more for future goals! You will be a lot closer to achieving a bigger target as a result.

Accountability

Here at ActionCoach Wakefield we add an extra A in SMART goals, making it SMAART Goals!

Agree at the start who will hold you to account. This can be anyone, whether it is family or friends, a colleague, your business partner or your business coach, but have someone who will encourage and guide you when it gets tough. Most people are less likely to want to let someone else down than they are to give themselves some wriggle room. Tell someone about your goal and what it means to you to achieve it, they will help push you through by not letting you off the hook!

Realistic/Relevant

Your goal should be challenging, but realistic for your business, and in line with the bigger-picture goals you have set for yourself, and the business. Particularly when setting quarterly goals and daily or weekly targets, make sure they are moving you closer to where you want to be in a year.

For instance, do not overwhelm yourself or set yourself up for failure by setting unrealistic benchmarks, such as slashing costs by 50% by the 2nd quarter, for most businesses this is not possible, especially for new businesses which usually have higher initial costs.

For example, to reduce costs and develop new marketing budgets, look back at previous years or similar businesses which operate in the same sector. Analyse the relevance of the goal to your business growth plans and the KPIs you have set. Always make sure the actions you need to take to achieve your goal are within your control.

Time-Bound

To track efficiency and progress, set realistic deadlines for your business goals. Consider the timeline in which you need to achieve this SMART goal and how often you need to check this goal is being met. Some goals will have strict deadlines and some will be less restricted depending on how long you are realistically able to dedicate to this particular goal. For example, by the end of the first quarter, Jess wants to sign on two new women to help her with the workload in her cafe. But it is important for businesses to know the time frames, either short-term or long-term goals and milestones they need to achieve to show progress. 

Putting a time against your goals also puts you under some pressure! It is easy sometimes to let yourself off. If your goal, for example, is to lose xxx pounds in weight and you’ve committed to running every morning, but that one time you wake up and it is cold and raining outside, it’s easy to let yourself off if there’s no specific time in which you want to lose the weight.

So when does a SMART goal become a SMARTER goal?

After you have met the SMART goal you have set for yourself or your business, you can then take time to evaluate results or progress and look back on the strengths and weaknesses of your business as a whole. From this evaluation, you can review your goals and set new SMARTER business goals that take into account the progress or areas that need more improvement. 

Evaluation:

To evaluate your goal you must analyse the results and progress in more depth. Consider each step, have you met your specific goal: was the goal relevant to your business plan and was it attainable? Look for the flaws and point out the strengths of the business development when evaluating so you review them in the next step. For example, if you have found a trend in the data or a certain niche is making more profit, you can look to capitalise on that niche in your next goal. 

Review: 

After you have evaluated the weaknesses, strengths and success of the goal you have achieved, you can review and create new SMART goals. This time you can set SMART goals for other areas or with new KPIs and timelines.  

In conclusion, using SMART goals to set targets and evaluate the progress you have made over the short term or long term is instrumental in business development and growth as a business owner. This is a quick and easy way to track and set business goals or objectives and can be used perfectly with the 80-20 Rule.