Many Americans dream about owning their own small business. What's more, a lot of them do it. Americans own and operate around 33.2 million small businesses.
Of course, owning a small business
is a very different animal from making that business into a profitable and
successful venture. Small business owners often start out with big ideas but
struggle with the goal setting that can make those ideas a reality.
What they need is a process for
setting goals, which is where SMART comes into the picture. Keep reading for an
overview of how to write SMART goals that will help turn your ideas into
productive activities.
What
Are SMART Goals?
When many business owners set out
goals, they suffer from a similar problem. The goals are often very vague, such
as bringing in more business or boosting profit.
These goals are what you might call
aspirational goals because they tell you what you want, but not how to get
there. It's a bit like setting a goal of losing weight as a New Year's
resolution.
SMART goals help you move away from
the aspirational and into the actionable by helping you hone in on what needs
to be done to achieve the goals. They do this by focusing on five areas:
- Specific
- Measurable
- Achievable
- Relevant
- Time-based
Now that you have a sense of what
smart goals are, let's look at the specific elements and how they apply to
setting SMART goals and writing SMART goals.
Specific
Vague goals tell you the direction
you want to go. SMART goals get into the roadmap you will use to achieve those
goals. When you write SMART goals, you need specific information about the
stops along the way.
In other words, your goals must
answer important questions about the goal, such as:
- What result do you want?
- Who will have the responsibility for it?
- What steps will it require?
Just asking yourself these questions
can clarify what you're really after with the goal.
Let's say your vague goal is more
profit. Is your goal really more money? Or, is your "more money" goal
really just part of a different goal, such as expanding your business?
Measurable
One of the key elements of a SMART
goal is that the goal must be measurable. Again, let's look at the more profit
goal.
If you bring in an extra $10 this
month, goal achieved. Yay! Despite technically achieving the goal, that
probably isn't what you meant by more profit.
Instead, you need specific
benchmarks so that you and your people know both what you're aiming at and how
much progress you're making toward it.
So, if you're looking for more
profit, you might set a goal of boosting profits by 2.5 percent each quarter
with the end goal of boosting profits by 10 percent by the end of the year.
Not only are these goals specific,
but it's measurable. You can compare your numbers over time and see how close
you've come.
Achievable
This is the area where a lot of
business owners get tripped up by their ambition. You can say that you want to
double your profit over the next year, but how realistic is that goal? Can you
and your team actually achieve that goal?
For example, are there enough
customers in your geographic area or your online niche to make that a practical
goal?
Setting unachievable goals sets you
up for inevitable failure, but it also does the same thing for employees. That
can prove painfully demoralizing for them and lead you down a path of blaming
them for not executing on the goals you set.
If you have a business mentor, you
should ask them how realistic they find your new goal before you announce it to
your employees. Another way to give yourself a reality check is by asking how
realistic you would find it if a competitor announced that as a goal.
Relevant
Relevance when writing SMART goals
matters more than you might initially think. This is where you consider how
important a goal is for your business in the big-picture sense.
What will the business actually get
out of the goal? Granted, a goal like more profit is more or less a given for
every business. If your bigger goal is expansion, though, is that best for the
business?
Can your community support the
expansion long-term? Would you be better off opening up a new branch of the
business in another town?
If your new goal won't serve the
business in the long term, you may want to consider a different goal or abandon
the new goal. After all, nothing says that you must pursue every idea or goal
that you consider.
Sometimes, writing SMART goals helps
you understand why a goal isn't a good idea for your business.
Time-Based
Another problem that many small
business owners face with their vague goals is that the goal is always set
sometime "in the future" or "down the road." When you cast
goals in that mental framework, it makes the goal a non-priority.
SMART goals need a time frame. If
you set your profit-increasing goal for one year, that puts you and all of your
employees on a clock. It's good for motivation, but also tells everyone when
you'll be analyzing the process for final results.
It also helps everyone manage their
subgoals. A 10 percent increase in profit by year's end breaks down to around a
0.83 percent increase per month. It's not necessarily an easy goal, but it's
probably manageable.
How
To Write SMART Goals? Mind the Details
The answer to the question of how to
write SMART goals is that you must mind the details. Specifically, you must
mind the details in the five main areas of concern.
You must write a goal that is
specific and detailed. The goal must lend itself to measurability, but also
fall into the realm of the achievable.
You need a goal that's relevant. It
also needs a time frame to help keep everyone on the same page.
Looking for more business management
tips? Check out the posts in our Business
section.
