How to Set Business Goals

Posted on February 04, 2013 by Keysha Bass, One of Thousands of Life Coaches on Noomii.

Your company’s goals will only be effective if you have a clear vision of what you want to achieve–and how.
A smart CEO understands the inherent value of goal setting in steering a growing business in the right direction. Unfortunately, figuring out exactly what the right direction is—and the road map to get there—isn’t as much of a no-brainer.

More than 80 percent of the 300 small business owners surveyed in the recent 4th Annual Staples National Small Business Survey said that they don’t keep track of their business goals, and 77 percent have yet to achieve their vision for their company.

Though the statistics are grim, they should make sense: establishing business goals involves a fair amount of introspection into what makes your business tick, and what you want its future to be. Devoting the proper amount of time to do that can be difficult in a struggling economy, but your goals will be more achievable and effective if you do.

“You have to know what you’re going for, and do it with your eyes wide open,” says Francisco Dao, founder and president of The Killer Pitch, a firm based in Tarzana, California, that helps companies and entrepreneurs refine their message, and former business coach and columnist for Inc. “Look at yourself in the mirror and ask yourself what it’s going to take to achieve your goals.”

Here’s Inc.’s road map to setting (and achieving) business goals.

Setting Business Goals: Determine Your Long-Term Aims

Start by distinguishing your long-term goals from your short-term ones. Your long-term goals should have a timeline of about three to five years, says Maria Marshall, an associate professor at Purdue University in West Lafayette, Indiana, who has conducted research on small and family-owned businesses.

They should articulate your company’s mission statement, reflecting the reason your company was founded. “When you think about why the company is there in the first place, goals take on a whole different meaning,” says Bill Baren, a business coach and founder and president of Bill Baren Coaching, based in San Francisco. “There’s more energy behind them. They don’t feel forced.”

Marshall says that these types of visionary goals usually fall within four general areas: service, social, profit, or growth:

• Service – Goals related to improving customer service satisfaction or customer retention.

• Social – Goals that focus on giving back to the community, through philanthropy or volunteer organizations, for example.

• Profit – Goals set to increase profits by a certain percentage.

• Growth – Goals related to the expansion of the company, through new employees, for instance.

Marshall likens each type of goal to a vacation destination, and the related short-term goals and objectives you establish afterward as the road map for getting there.

To emphasize the distinction between long- and short-term goals, Baren suggests using different language. “Look at a long-term goal as an initiative,” he says. “If you’re constantly calling them goals, people will say they’ve heard it before. [To them,] it will feel like a marathon. Sometimes, a goal needs to be positioned as something bigger.”

If you’re truly thinking big, you might want to consider creating a B.H.A.G., a “big, hairy, audacious, goal.” The term—coined by James Collins and Jerry Porras in their 1996 article “Building Your Company’s Vision”—refers to the 30-year game changing goals, like Sony trying to change the worldwide perception of Japanese products being of poor quality.

Dao also points to the example of Boeing building the 747. “They were going all in,” he says. “If it didn’t work, Boeing was going to go bankrupt. B.H.A.G.’s aren’t impossible, but the company better be willing to bet the farm.”

Regardless of just how long you want your long-term goals to be, be cognizant of how quickly they can change. Lori Becker, founder and CEO of Boston-based education publishing firm Publishing Solutions Group, says she is a fan of the five-year goal, but the current economy and some major changes in her industry have forced her to reevaluate. “Instead of a few years out, I’m now looking quarter to quarter,” she says. “My goal is just to make more money than I did last year.”

Setting Business Goals: Create Short-Term Objectives

Now that you’ve figured out what you want in the long term, you need to figure out how to get there. Marshall recommends an easy way to think about your short-term objectives for accomplishing your long-term goals. Make them S.M.A.R.T.:

• Specific. In order to work, objectives need to be concrete (not as abstract as your long-term aims) and highly detailed.

• Measurable. Put a figure or value, such as a dollar amount or percentage, to the objective.

• Action-oriented. Lay out which actions need to be taken by which people, and when.

• Realistic. Make goals challenging, but consider your resources so that you can actually achieve them reasonably.

• Time specific. Set a deadline to keep things on track.

“You have to understand what the long-term goal means on a daily basis,” Dao says. “How do you establish the goal at its most fundamental level? If I want to increase sales annually by 24 percent, how many new customers or orders a day is that?”

Read entire article here: http://www.inc.com/guides/2010/06/setting-business-goals.html

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