How do you measure success in business? Is it by annual revenue? Monthly leads generated? Or just an overall sense of satisfaction from a job well done?
In business, it can be challenging to know whether things are going well or not. It often takes a catastrophic failure for a business owner or entrepreneur to realise they’ve made a mistake somewhere down the line. If you don’t have a suitable method of keeping track of your progress, you can go off course without realising. For example, you might see your customer numbers go up month after month and only focus on the positives, while ignoring the fact that your retention rate is low and your overheads are spiralling rapidly out of control.
Assessing your success requires a holistic picture of everything that is going on in all aspects of your business. But how well things are going is impossible to determine unless you have clear cut goals.
There’s not a CEO, manager, business owner, or budding entrepreneur out there who doesn’t have some desired outcome for their endeavours. But often, these are hazy targets such as “building a business from scratch,” “landing a big client,” or simply “making money.” There’s nothing wrong with having dreams, but they aren’t much use without a roadmap for success. This is where your goals come in.
Setting SMART goals
When you set professional goals, they should always be SMART. This doesn’t mean you need to be intelligent about it (that should be a given) but rather that they should be Specific, Measurable, Achievable, Relevant, and Time-Sensitive. For example, let’s say you’re unhappy with your level of fitness and want to shed some pounds. Losing some weight is an admirable goal, but it’s not SMART. Setting such vague aspirations makes you unlikely to make any progress, and you’ll soon fall back into your old ways. A SMART version of this goal would be something like: “I want to lose two stone by the end of the year.” Now this goal is much more useful. Now you know exactly what success looks like (being two stone lighter), and when you want to achieve it (before the end of the year. The goal is specific, you can measure the results, it’s achievable, relevant to your overall aims of leading a healthy lifestyle, and has a fixed time deadline.
The SMART system is simple, but it’s a surefire way to propel you along the path to success.
Why are business goals so important?
For your business endeavours to be successful, you need to have a vision of what you want to achieve and how you will achieve it. This gives you more than just a hazy glimpse of success down the line; it provides you with the means of getting what you want. Business goals are essential for so many reasons, and here are just a few.
- Goals give you direction
Imagine you are faced with an enormous business decision with far-reaching consequences. Let’s say, for example, you interview two different applicants for a senior role in your company. They are both highly-qualified yet have entirely different approaches to doing business. You are impressed with them both but only have the resources to hire one. What do you do in this situation?
You have good reasons to hire either one, but the decision will have a huge impact on how things turn out six months or a year down the line. How can you possibly know what to do? Having a clear vision for your company eradicates this problem altogether. You know exactly where you want your business to be six months from now, so you have the power to pick the applicant whose approach is most likely to get you to where you want to be.
Having SMART goals makes big decisions like this a lot easier. Consequently, it saves you time and energy, enabling you to focus your efforts on the areas of your business that need the most attention.
- Goals help you track your progress
Your professional goals provide you with a clear metric to determine whether or not you are succeeding. At any one time, you should be able to crunch the numbers, assess your business performance, and decide whether or not you are on track to meet your goals. The simple act of having these goals enables you to know precisely how well you are doing at any one moment. You can pinpoint where you are doing well and which areas need work. And the best thing about this is it gives you guidance on the next steps. Are your social media numbers falling? Perhaps you need to invest a little more time into your digital marketing.
- Goals are motivational
Going back to the weight loss analogy. If you simply want to lose weight or get fitter, it’s extremely difficult to tell when you’ve achieved your goal or how close you are. You do start to improve, but so gradually that it’s barely noticeable on a day-to-day basis. Nothing is spurring you on other than a general desire to better yourself. But when your goal is to run 5k by December, you know the very second you’ve achieved what you set out to do. You can gradually add more distance with each run and clearly see yourself getting closer and closer to your target. Every time you strap on your trainers and head out the door, you feel a little bit nearer to that 5k, and the feeling becomes addictive.
The same goes for sales targets and business profits. Having that goal and seeing it within your grasp spurs you on and makes you want to work that little bit harder to reach it.
- Goals keep you accountable
One of the most powerful things about goals is how they make you accountable for your actions. Goals make it impossible to hide from your shortcomings. If you are constantly falling short of your targets, you know you’re doing something wrong, and there is room for improvement. Yet if you’re hitting them every time without difficulty, maybe you need to set your sights a little higher. Your ability to hit your goals provides you with the opportunity to reflect on your efforts and whether you are doing everything necessary to succeed.
In conclusion, having achievable business goals is crucial if you want to achieve big things. They keep you motivated, hold you accountable for your actions and give you a clear direction for success.