The New Year always brings with it the need for New Year’s resolutions and the inspiration to set goals. We establish them in our personal lives and it is equally important to establish them in our businesses. More than 80% of the 300 small-business owners surveyed in a recent Staples National Small Business Survey said that they don’t keep track of their business goals, and 77% said they have yet to achieve their vision for their company.
Business goals should be clear, precise, and achievable. Setting these goals is essential to the growth and development of your company no matter the size of your business. There have been many suggestions made about how to implement a goal-setting process. Terry Quinn, C.O.O. of MW Cleaners (Tuchman Advisory Group (T.A.G.) member), states “Goal-setting helps define a clear mission for the business. Too many companies get stuck in the day-to-day operations and do not take time to develop concrete measurable goals. One can spend all day putting out fires, but if you do not set goals and standards for your company, then it will be difficult to obtain your vision. Setting goals provides a built-in review process allowing management to evaluate the business on a routine basis. At MW Cleaners we ask our employees for feedback and ideas since it is important they participate in the goal-setting process. We develop and monitor standards that are daily, weekly, and monthly, and are tied to each individual’s incentive compensation. These goals and standards include sales, expenditures, labor, efficiency, quality, etc. It is imperative that we continue to improve the operations, but without knowing where you are, it is difficult to be successful.”
At our first meeting each year of T.A.G., our member companies individually define their goals. Annual goals should always support your company’s mission statement and guiding principles. We focus mostly on attainable goals but definitely include a few “stretch or reach” goals, ones that push you to think beyond what is possible. Jack Welch, former CEO of General Electric, once said, “By reaching for what appears to be the impossible, we often actually do the impossible. And even when we do not quite make it, we inevitably wind up doing much better than we would have done.”
Listing goals in terms of categories is helpful in defining and deciding which department in your company is going to be responsible, and can therefore budget appropriately. Some categories to think about are: finance, marketing, service, sales, products, and growth.
This year T.A.G. will utilize the S.M.A.R.T. approach to goal-setting. There are many ways in which to set goals, but the S.M.A.R.T. technique is one of the most popular and simplest to implement. George T. Doran first proposed this method in an article entitled There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives, published in the November 1981 issue of Management Review. The S.M.A.R.T. method is often referred to and associated with Peter Drucker’s Management by Objectives concept.
Alyssa Gregory, Founder of Small Business Bonfire blog, states, “S.M.A.R.T. goal-setting refers to a planning process that measures five individual criteria in order to evaluate a goal and determine its viability. It’s a defined process that takes your goal from the general-idea stage and puts it into action.”
The acronym S.M.A.R.T. stands for:
Specific – target a specific area for improvement. Goal should be defined, focused, and stated clearly.
Measurable – you need to be able to quantify an indicator of progress. A measurable goal should include milestones and targets.
Attainable – don’t set a goal that is out of reach or not realistic. Include a plan that breaks down the overall goal into smaller, more manageable action steps.
Relevant – state what results can realistically be achieved. They should make sense given the available resources and current conditions of your industry.
Time-based – goals cannot be open-ended. Whether you want to increase revenue by 10% or add 2 new routes, specify when the result will be achieved.
Now that the basics for S.M.A.R.T. goals are clear, it is important to think about what should not be done to make your goal-setting technique as efficient as possible. Here are eight common mistakes small business owners make when setting goals:
1. Procrastination – Goal-setting can be overwhelming, so if you wait for the perfect time to start, many months will be wasted. Assign a due-date.
2. Making sure your goals are S.M.A.R.T. – if you haven’t used the specific, measurable, attainable, relevant, and time-based guideline, you may end up with goals that are not possible.
3. Not keeping them visible – Small business owners are constantly busy with numerous tasks, which can lead to overlooked commitments. Setting a goal at the beginning of the year and not reviewing it every few months is a recipe for failure. All goals should be in writing, with action steps for achieving them.
4. Not being flexible – Stay open to new realities and adjust as needed. Maybe the resources available for the initial goal are lost and new opportunities take their place. Things happen, you get new information. Nothing is set in stone; if need be, change goals accordingly.
5. Lack of resources – Be realistic: make sure there is money in the budget and/or available employees needed to accomplish the task.
6. Create myriad goals – Setting one goal is not enough, ten is too many. Find a number that is manageable for you.
7. Forgetting to acknowledge successes – It takes effort and organization from beginning to end to reach goals. It is important to acknowledge the successes in between. This tracking will insure motivation along the way making the final acknowledgment more exciting.
8. Focusing only on work goals – Be sure to set goals that bring you personal joy. For example, read more books, or enter an athletic competition. Goals should be stated in a positive way. If someone’s goal is “not to work late,” the positive way would be “spend more time with family.”
Once you have written down your goals, it is imperative that some kind of system for setting and tracking your goals be implemented. Some ideas include:
• Notebook – Keeping your goal list in a simple spiral notebook, checking on progress, and crossing off as needed.
• Excel or Google Spreadsheets – Create your own format.
• Combination Dry Erase/Cork Board – Use color-coded markers and Post-its on the board and hang in the office for everyone to monitor progress.
• GoalsOnTrack, Goalscape, GoalEnforcer – On-line tracking tools.
• Pinterest.com – Great ideas for goal-setting worksheets and charts.
Well-thought-out goals and objectives will keep you on the path to success. Imagine the Indianapolis 500-Mile Race without a finish-line or baseball games without homeruns. Be SMART in 2017, review your mission statement with your employees and together set goals for your business.