Your Guide to Understanding and Setting Business Goals

Everyone has goals for themselves, personal and professional. Business owners, however, have to create business goals in addition to their personal and professional goals. So what are business goals? What do they look like? How do you plan for them as a business owner? 

Simply put, business goals are goals you create for your business. They’re different from professional goals because professional goals are meant for you, as a professional. Professional goals might include learning a new skill or certification, attending certain conferences, or making new professional connections. Business goals, on the other hand, can include increasing sales, finding new clients, creating new products, rebranding, and more. Goal setting is an important part of your business plan to ensure your business moves in the right direction within the right time frame. It also helps you to strive for continuous improvement and gives you a diagnostic metric of key performance indicators to keep track of how well your business is doing.

Understanding Business Goals

Goal setting is an important piece of strategic planning – specific, measurable goals give you milestones to follow and help your business thrive, instead of merely surviving. One potential trap of running a business is forgetting to create deadlines for your goals. Sometimes orchestrating a rebrand or creating a new product feels like a monumental task, and since there’s no real, hard deadline that has to be followed, those big goals get kicked further and further down the road while you wait for “just the right time” to get started. And while we wait and wait to put those projects in motion, our business starts to stagnate. Unfortunately for us, Newton’s First Law of Motion applies to entrepreneurship too: a growing business tends to continue growing, while a stagnant business tends to stay in place, unless acted upon by an outside force. Fortunately for us, we can be that force that gets things moving again!

The Role of Objectives in Business

You have to be intentional with your business to keep it healthy. Without a concentrated effort in the right direction, you won’t make it to your intended destination. At least not in any decent time frame. The most effective way to apply that force is by setting clear, reasonable objectives for your business, including a deadline. Think of your business goals like the gorgeous view on top of a mountain; your objectives are all the steps you have to walk up to reach the top. When it comes to huge projects like a company rebrand, there are a lot of steps. The first flight of stairs may be conceptualizing what you want to change and creating a project board. The second flight is hiring someone to help you. The third is planning and scheduling the rest of the steps, and so on with logo and website redesigns, picking new fonts, etc. until you finally reach the summit. 

Even with smaller goals, like finding those next few clients, it can be extremely helpful to break it up into smaller objectives: attend a specific conference (or xx number of conferences in order to expand your network), increase marketing efforts, host xx sales calls per month. This helps to keep you walking in the right direction while being intentional with your time and efforts. But, it’s important to make sure you set clear objectives instead of letting all the phases of a project bleed into each other. If you try to do all the pieces at the same time you won’t be able to focus on any one piece enough to do it well, and there is a good chance you’ll overwhelm yourself and end up feeling like you haven’t accomplished much. 

The Different Types of Business Goals

One of the fun parts of setting business goals (at least if you enjoy organization like me) is that there are multiple types of goals that each of your objectives can be sorted into! This sort of organization may seem nit-picky at first, but in reality it helps you to have the right mindset to approach each of your goals in a realistic and practical manner.

Long-Term vs Short-Term Goals

The first distinction you should make between your goals when creating your roadmap is if they are long-term or short-term goals. Long term goals are typically goals that will take a year or longer to accomplish; examples would include “Over the next three years, we aim to expand and open 2 new office locations in new states within the US. Each location should reach $xx in annual revenue within their first year in operation” or “We plan to achieve a 3x ROI within 2 years from investing in new equipment to automate part of our production.”

Short term goals are goals that you can achieve within a year. Examples include: “In Q1 of this year, we want to increase sales by 12%” or “In this year, we want to optimize our production process and decrease time to produce our xx product by 15%.” Categorizing your goals between these two options helps you to prioritize tasks and schedule objectives related to your goals in a way that makes sense for the timeline you desire. 

Financial Goals vs Operational Goals

The next distinction you’ll want to make is what category of business your goals fit into. For example, are they financial, operational, or something else? Financial goals are related to, well, finances. Goals related to increasing sales or profit are financial goals. If you’re planning to reach a financial goal it’s important to plan with cash flow and available resources in mind. What’s realistic for your business to be able to achieve in xx timeframe? What do recent market trends indicate could happen? 

Operational goals are goals related to production and operations within your business, like increasing production efficiency or optimizing a process within your business. When planning to reach an operational goal it’s important to plan with a realistic expectation for how quickly change can take place (and to what degree). Where can improvements be made in your processes? How efficient can this process become with your current resources? Where are redundancies within your systems? 

If a goal doesn’t fall neatly into one of those two categories, it may be both or neither! For example, deciding to hire a new employee is both a financial goal and an operational goal. You have to plan to afford a new team member’s salary and also plan the team member’s onboarding, training, and how their role will contribute to the overall operations of the business. Other goals may be more specific to marketing, team management, or other areas of your business!

SMART Goals and Their Importance

The final aspect of goal setting we’ll discuss here are SMART goals. SMART goals stands for Specific, Measurable, Achievable, Relevant, Time-bound. Unlike long-term vs short-term and financial vs operational, you shouldn’t plan for SMART goals and… dumb goals, I guess. Rather, you should check your goals against the SMART goal standard as you plan. Afterall, who has time for dumb goals these days?

If you’ve created a goal that is vague, that goal is essentially useless to you. It’s not providing clear direction on what you’re trying to achieve. The same goes for if that goal is not achievable or relevant to your larger vision for your business. How, why, and what are you trying to accomplish? On the other hand, if your goals are not measurable and time-bound it will be significantly more difficult for you to accomplish them. If you can’t measure your goal, how will you know when it has been accomplished? And if it isn’t time bound, let’s face it, it’ll always be relegated to the bottom of our never-ending to-do lists. Our energy is a limited resource, so ensuring that your goals are useful is important, but it’s also important to ensure that you won’t waste energy reminding yourself why you’re doing something or figuring out how to get from point A to point Z over and over again.

The Goal-Setting Process for Businesses in 2024

Best Practices in Setting Achievable Business Goals

Every industry has best practices for management and decision-making; the same is true for goal-setting. One best practice is to use the SMART standards listed above when deciding how to set your goals. Another is to use a SWOT analysis when deciding what direction to take in the first place as you begin to outline your goals.

A SWOT analysis covers the strengths, weaknesses, opportunities, and threats to your business. Knowing your strengths and what opportunities are available to you can help you to take advantage of potential ventures or growth opportunities at the right time to see the best results. Likewise, knowing your weaknesses and what threats your business might face helps you to shore up your defenses and avoid potential declines in your business. These are important factors to take into account when setting the course for your business.

Once you know what goals to set and how to set them, it’s necessary to keep track of progress as you advance towards your goals. Knowing if you’re on track, ahead, or falling behind on your business goals lets you adjust your energy to where it’s needed and see where your team is most and least efficient. Team members can play a huge role in the process of achieving and measuring goals– don’t underestimate how useful some on-the-ground feedback can be! 

Another best practice is to avoid setting unrealistic goals or overly simplified ones. Chances are you won’t achieve world domination a year into a new business venture; if you set overly optimistic expectations, you’re setting yourself up for disappointment. Know what limits there are on your potential growth and be realistic about the impact you can have within the time-frame you’ve set. On the other hand, setting goals that you know without a doubt you can achieve leads to not being challenged and not pushing towards the level you could reach if your goals were to push you a bit. 

Final Thoughts

Setting goals for your business is a key piece of being successful. Make sure you create goals that are practical, useful, and strategic. And once you’ve set your goals, watch your progress! It’s a good idea to review and update your goals as you go. Sometimes a time-frame seems practical until you actually attempt to finish the project and every step takes twice as long as you thought it would; don’t beat yourself for pushing a deadline or changing the end-goal, that’s part of the process! If you’d like some help in defining & setting goals for your business, as well as outlining the recommended systems & team that will need to be in place in order to reach those goals, take a look at our business audit & strategy. It gives you the knowledge you need to keep growing and chasing after your goals with complete clarity and confidence.