Learn how to set SMART goals in business. This process will help to align your business and your team towards the same direction and ensure that everyone is running towards the same targets, which is an essential part of scaling up your business.
We all have things that we want to achieve or obtain, but these thoughts remain in our heads until the day we decide and commit to making it happen. This is especially true for business owners and entrepreneurs because their businesses need to manifest these thoughts.
The way we can translate our thoughts into something tangible is by making them into goals. Goals are great because they give us a sense of direction, motivation, and focus. However, the problem is figuring out how to set goals and achieve them.
Thankfully, there’s a formula for setting good goals – it’s known as SMART. SMART is an acronym that stands for Specific, Measurable, Achievable, Realistic, and Timely. This is a formula that helps us ensure that our goals are well-structured, achievable, and trackable. With this formula, we can learn how to set SMART goals in business and achieve them.
How To Set SMART Goals in Business
Imagine you’re a sales executive and you’d like to have some career progression. Here’s a good example and bad example on how to set a goal.
A bad example of a goal is: “I’d like to get promoted soon”.
A good example of a SMART goal is: “Within 5 years, I’d like to have the network and skills needed to be the head of sales in an MNC that leads at least 30 people across the Southeast-Asia region. I’ll need to take on projects that will give me leadership opportunities, go for additional studies to gain management skills, and network with people from companies that I’d like to be part of.”
Similarly, this can be applied to businesses that business owners run as well.
A bad example of a goal is: “I’d like to hit $1 million in revenue”.
A good example of a SMART goal is: “Within 1 year, my business needs to hit $1 million in revenue, up from $500,000 which it is doing currently. To do so, we will need to sign up 6 more channel partners, grow Facebook ad spending to $2 million, and implement an affiliate program.”
Let’s break it down this SMART goal into its components and see how we can set a good SMART goal.
SMART Goals in Business: Specific
Good goals are well-defined, clear, and free of ambiguity. This increases the probability that we will accomplish these goals. When we consider the specificity of a goal, these 5 W’s must be answered:
- What is it that you want to accomplish?
- Why do you want to accomplish this goal?
- Who are the people involved in this goal?
- Where is this goal located?
- Which resources do I need to accomplish this goal?
SMART Goals in Business : Measurable
It’s important that we have specific criteria that allow us to measure our progress. This lets us know how well we’re doing and whether or not we’re making progress towards the accomplishment of the goal, or just spinning our pedals.
When we see progress, it’s easier for us to stay motivated and focused. Meeting milestones towards our goal gives us a sense of excitement of getting closer to achieving our goal. These are some questions that a measurable goal should address:
- Quantity: How much and how many are we talking about?
- What are the key metrics that will tell you about your progress?
SMART Goals in Business : Achievable
While we want to shoot for the moon, we should have goals that we can figure out ways to achieve. Good goals should stretch us and challenge us, but not overwhelm us and cause us to give up on the goal. Ask yourself these questions:
- How can you achieve this goal?
- What resources and capabilities are needed to achieve this goal?
- What resources are you missing and how can you obtain them?
SMART Goals in Business : Relevant
One important factor on whether we’re setting a good goal is how relevant is it to our lives and our purpose. A goal must matter to us, otherwise, we won’t have the interest nor motivation needed to achieve it. Consider these questions when coming up with your SMART goal:
- Is this the right time for you to pursue this goal?
- Is it a worthwhile goal for you to pursue?
- Are you willing to make the sacrifices necessary to achieve this goal?
- Do I have the support that’s necessary (especially if you have a family or other commitments)
SMART Goals in Business : Timely
A well-defined SMART goal has one important element, and that’s a timeline. You need to know when the goal starts, and when you’re expecting to achieve it. If the goal has no element of time to it, then you will not feel a sense of urgency, importance, or motivation to work at the goal. Make your goals timely by setting deadlines for your goals.
How To Apply SMART Goals in Business
SMART goals can be applied to all aspects of our lives, not just in business. Try setting small SMART goals to get familiar with the process of how to set goals and achieve them. This gets the momentum going where you start achieving small goals, then move on to bigger goals.