Joe Lennon FCCA explains the concept of setting SMART goals and why they are so important to scaling a business.
Goal setting is about creating an action plan with a timeframe to help guide a person or group towards a particular end result, typically something you want to accomplish. It can be a significant part of personal, team, and organisation development.
Goal setting can be guided by a criteria, or specific rules, known as SMART goals, that can help to improve performance. Given our work with growing businesses, to help them understand the finances and state of their performance, we'd recommend the practice of goal setting and SMART criteria as a means to influence effort and persistence to find ways to attain objectives.
What are SMART goals?
A SMART goal is a detailed objective that an individual or business sets out to achieve over a period of time. Goal setting should stay clear of generalised targets. Implementing the SMART goal concept allows you to develop clear and focused objectives that can be achieved within a given timeframe.
What does SMART goals stand for?
"SMART" is an acronym which stands for the 5 key characteristics that work together to set a goal:
It's important to understand that there is a big difference between setting a generalised objective such as:
And setting a SMART goal:
In order to write a SMART goal you must include these five characteristics:
The key to writing a SMART goal is by answering two questions:
What do you want to accomplish and;
Why is it important?
If you analyse the what and why of your objectives you'll innately establish goals that are specific to you and your business. If you're working on a team SMART goal it's important that you know who is involved and what they will be working on to reach your ultimate objective...think personalised targets.
Being clear and defined will place you on the right path in relation to your strategic direction, it's also an ideal way to avoid that discouraging feeling of ‘why am I doing this?’ that is often associated with vague business goals.
Answer these questions as a starting point for your SMART goal:
Improving .................... will help my business
It will help my business by ....................
I can achieve goal this by ....................
This goal needs to be accomplished by ....................
This goal needs to be accomplished weekly/monthly etc.
Adding a measurable element to your SMART goal is the key to knowing when you’ve reached your target, or how close you are to attaining it.
When working with your staff to achieve business goals, the inclusion of detailed amounts, percentages or task checkpoints for individual employees are a few ways you can measure their success.
This will allow you to determine your team's overall and individual progress and address areas that need improvement. It may also prompt staff meetings or reviews in order to stay on track with the task in hand.
Remember, communication is key when striving to achieve your business goals!
The purpose of setting SMART goals is to prevent you from setting yourself up for disappointment and to challenge yourself and your team within realistic expectations. For business owners this means setting goals that are a happy medium between too easy and nearly impossible.
You have to be mindful and consider if your employees have the capacity to achieve the goals you have set, this can include the time, knowledge or skills.
Finding goals that exemplify an attainable balance means that you'll need to do some detective work in your own business. Prepare to dive into your accounts and analytics to set realisable objectives. This will help you and your team avoid feeling deflated by an impossible task.
Doing this work will also give you the confidence to set more SMART goals to help your business reach the next level of growth.
Keep your SMART goals relevant to your business's overall targets and focus on positively impacting your organisation. Remember, this is about setting yourself up for success. Focus on goals that are applicable to what's happening in your industry and where your business is at in the lifecycle stages.
Hypothetically, if one of your products is experiencing low sales, rather then setting a goal of "find new products" you could focus your SMART goal around improving the existing product you stock. Better that than planning a huge investment in new products while loosing money on the old stock.
You should consider things like supply and demand, pricing, staff product knowledge, customer experience, and marketing efforts (just to name a few). How can any of these be improved to help improve sales of your struggling product?
The best way to create a sense of urgency and stay on schedule is by making your SMART goals time-based. Giving your employees a deadline will ensure that projects pertaining to the goal are completed in a timely manner and you'll see the progress in no time!
Depending on the SMART goal, you may set up daily, weekly, monthly, or yearly deadlines. This is not only another way to measure your success, but it is the best way to make sure your team is consistently working towards the goal and is focused on accomplishing them NOW…not when they eventually get round to it.
Why are SMART goals important
SMART goals are important to increase productivity in your business and should be used by everyone in your team. As the owner, you will set specific objectives that will benefit the entire organisation which will allow you to scale your business in a constructive way.
Your employees can also use this same concept of goal setting to achieve their own business (and personal) objectives, allowing them to grow with the organisation and reach new professional aspirations.
Looking for some SMART goal examples?
Start by creating yourself a goal setting template...
If you’re considering the idea of implementing SMART goal setting in your business, a great option would be to discuss your targets with your professional business advisor. This can provide you insight concerning the numbers that make up the bigger picture of your business and performance. That in turn will help you establish appropriate targets to achieve the next phase of growth.
The content of this post is up to date and relevant as at 24/05/2019.
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