The Power of Goal Setting for Small Business Owners

The difference between setting goals as a small business owner and not setting goals could quite possibly be the difference between whether your business thrives—or for that matter, survives. 

When you know where you want to end up, you know which path to follow to get there. Otherwise, you could be walking aimlessly and never reach your destination.

Setting goals that are strategic and attainable allows you to put the focus on the most important tasks and priorities. 

In this article, we’ll be exploring the benefits of goal setting, as well as how to create a goal-setting strategy that will work for your small business. You’ll also find some tips for staying motivated and overcoming common challenges and obstacles.

Whether you’re just starting out with your small business or looking to take your business to the next level, goal setting is an essential skill to master.

Why Goal Setting is Essential for Small Business Owners.

Goal setting is important for you, as a small business owner, because it doesn’t rely on luck to get you to the promised land. Instead, you are taking actionable steps to get there. 

  1. Creates a clear roadmap. By setting specific, measurable, attainable, relevant, and time-bound (SMART) goals, small business owners can more easily chart a path forward. 
  2. Provides motivation and accountability. Trying to achieve a goal can be a powerful motivator. And by regularly reviewing and adjusting goals, small business owners can hold themselves accountable and make sure they are moving in the right direction.
  3. Better decision-making. Goals help small business owners establish clear criteria for decision-making that is in line with their business objectives. 
  4. Tracking progress allows for strategy adjustment. When goals are specific and measurable, they can be tracked for progress. If you discover you are not on track, you can adjust as needed. 

How to Properly Define a Goal.

First things first. Think of your goals as a destination. Pull out a “roadmap” and study it. Where are your starting from? Where do you want to go? What routes could get you to the destination? What obstacles might get in your way? How can you get around them?

A SWOT analysis is a good way to find the answers to these questions. If you aren’t familiar with this term, it stands for strengths, weaknesses, opportunities, and threats. 

Strengths and weaknesses are referred to as internal factors because they are things you can control within the business. Opportunities and threats are considered external factors because you do not have control over them.

  • Strengths. What is your main advantage against the competition? Do you have a one-of-a-kind product? Do you have extensive experience in the industry? Do you have stellar customer service that translates to exceptional customer loyalty?
  • Weaknesses. What areas of your business could be improved? What do your competitors do better than you? Is your business in a bad location? Do you lack resources or training?
  • Opportunities. Where are the areas that offer growth for your company? Could you expand your product lines or services? Are there changes in the market you could exploit? What more could you do for your customers?
  • Threats. What could stand in your way of success? Is there a new competitor on the scene? Would a dip in the economy deter people from your business? Have you received bad press that has negatively affected how your customers view your business?

Information from the SWOT analysis will give new context to your map and make it easier to chart your course. It will help you see which paths provide a direct route, which paths you should avoid or detour around, and whether there are any unavoidable roadblocks that will require a special plan?  

It’s like using a driving app to detect hazards and traffic on your upcoming route. If you see a bottleneck, you can detour around it and keep moving. 

Or, let’s say traffic is stopped due to a serious accident and there is no alternate route. If you learn about it before you get to it, you have options. You could take the next exit and have dinner or visit a local attraction while you wait for the traffic to clear. Or, you could stop at a gas station, fill up the tank, use the bathroom, stock up on snacks, and prepare to wait in place. 

The point is you didn’t wander into the situation unknowingly. You knew what was coming and you made decisions based on what suits you and your car’s occupant’s the best.

How to Set Goals for Your Small Business.

Using the SMART method we referenced earlier, is a great way to produce realistic, achievable goals. For instance, there are people who advocate “pie in the sky” goal setting reasoning that if you aim super high (something clearly unattainable), you’ll still get further than you would otherwise. 

The problem with this reasoning is that the goal is vague and overwhelming. Those trying to achieve it may well get lost in the journey, become confused about their role, and lose enthusiasm for the job. Others that should be involved may not even realize it. Never mind following a road map, the company has wandered off into the desert!

Instead, let’s take a look at SMART and see how it can be used to create effective goals that can move your business forward. 

General Goal: An accounting firm, wants to save money by automating their business to eliminate the labor of intake and handholding of clients, while still making them feel like they are getting personalized service.

This has some worthy aspects to it, but there is no roadmap for moving forward. It is a general statement with no direction about how to begin, who will do the work and when, or how to determine if it’s been successful. Let’s drill down and create some detail using the SMART method.

  • Specific – The IT department will consult with the Customer Service department to create a website portal where clients can upload their financial documents as they get them instead of trying to keep track of them to submit at the end of the year. It will also allow them to access any of their records and status reports at their convenience.
  • Measurable – The company wants to register all new clients for this system and convert 75% of existing clients by the end of the year. 
  • Achievable – The team believes this can be achieved, on budget, by automatically registering new clients as they come onboard and by promoting the switch via the monthly newsletter, messages on the website, and a personal invitation to join via email marketing.
  • Relevant – Creating a user-friendly portal that allows clients to “come and go as they please” will go a long way toward reducing front office involvement in the gathering, storing, and sharing of documents. While the firm might not ever have a fully automated site, it will reduce staff involvement and as the firm grows, they won’t have to scale up the customer service department.
  • Time-bound – This gives the team a deadline around which they can plot their timeline. When will you measure your success? In this case, the goal is to convert at least 75% of existing clients by December 31. The company would like to have the majority of their clients beginning to use the new system as the new tax year begins on January 1.

So, taking all of the information we detailed above, this is what our new goal looks like.

SMART Goal: The IT department, working in consultation with the Customer Service department, will develop a secure, website portal that allows clients to upload their financial documents as they are created. It will also allow them to access any past records or reports at their convenience, eliminating the need for a customer service representative to intervene. All new clients will automatically be registered into the new system. At least 75% of existing clients will be registered by December 31, so they can begin using the new system at the start of the new tax year on January 1. This will be promoted through the newsletter, website messaging, and email marketing. 

How to Achieve Your SMART Goals

Now that you’ve got the goal, how do you make it happen?

There are several actions you can take to assure progress and increase the likelihood of achieving your goal.

  • Discuss it. Make sure everyone involved fully understands the goal from the start. Discuss it and make plenty of time for questions so that you can clear up any confusion. Talk about what success looks like and how you will achieve it.
  • Paint Big Picture. It can also be helpful to outline how the goal relates to the overall success of the company. When team members can see the impact their work will have on the big picture, it can help to keep them focused and motivated. 
  • Monitor Progress. Constantly monitor the progress of the team. Review the status of key performance indicators so you can make adjustments in a timely fashion. 
  • Nurture the Team. Provide positive feedback and celebrate successes as the ball advances down the field. Be respectful of the team’s time by only holding meetings, when necessary, only invite staff necessary to the topic, and make the meeting as brief as possible.
  • Effective communication.  Check in with the team regularly. Make sure communication is a two-way street and that information can easily flow in both directions. This makes it easier to identify potential delays or roadblocks and find solutions.

Great ideas are not enough to ensure your success as a business. It takes determination and hard work, but if your actions are not focused properly, you might just be spinning your wheels. And at that rate, it won’t take long before you and your employees burn out. 

Better to periodically take some time to create SMART goals that will harness the power and creativity of your team. A well-charted course conserves energy that can be used for other things. In that way, you can work smarter, not harder, and actually achieve the kind of success you desire.