If you are a new entrepreneur, or if you have been an entrepreneur for years, you no doubt are aware of the chasm that exists between conception and implementation. Deciding to create a business is one thing, but actually creating one can seem daunting in the least, more likely overwhelming at times. The aphorisms of one bite at a time, one foot in front of the other, a piecemeal progression, are valuable to a point. Businesses, however, are comprised of many moving parts that need to work in concert, and often steps must be taken in unison; think of how many actions must come together on a product launch date or campaign announcement. If it’s not always possible to take things ‘one step at a time’, planning out exactly what steps will happen, and when, is an essential aspect of generating a business and its goals moving forward.
Intelligent goal setting requires SMART goal setting.
This isn’t tautology. George T. Doran coined the acronym SMART in 1981 as a way to generate management goals and objectives. Guided by this acronym every managerial goal should be Specific, Measurable, Attainable, Relevant, and Time-based. Through binding your business goals to the SMART model, you can begin to organize the actions that must be taken to meet these goals. The stepwise approach to carrying them out will begin to develop into a coherent plan moving forward.
Specificity is the key to goal making. It’s all well and good to want to make more profits, but the vagueness of this goal makes planning for it much more difficult. Your objectives should all address the questions of what, where, why, when, and how. What exactly is the profit margin increase you’re looking for? In which locations or regions (where) will this plan be implemented? In what way (why) will these increased profits benefit or grow your business? When will this change begin, and when is the estimated date of completion? And, finally, how will this plan be carried out? Increased customer outreach, increased price points, increased advertising, are all possibilities, and we can see that each possibility opens up new subsets of goals to be specific about.
Your goals must be measurable.
This is perhaps a truism in itself. After all, how else will you know when your goal is reached if its aim cannot be markedly identified. By what percentage must your profit increase each quarter to know your goal is being realized? Strategies can be adjusted if measurements are not being met. Furthermore, you can analyze if these measurements are overly optimistic. This speaks to the attainability of your goals. Setting challenging aims are the lifeblood of a successful business—it can invigorate your team and surprise your competition—but setting impossible goals will have the opposite effect. Another truism, perhaps, but it’s not just your goal that will fail; your team will become dispirited, and your brand’s public image may suffer.
The relevance of your goal speaks to ensuring it matters to you and your business: the growth and development that will occur once this objective is attained. Is it worthwhile, and is it the right time? This question alludes to whether or not your goal is realistic. Realistic goals speak to the impact on your business should these goals be reached. This is to say that a goal may be attainable, but managing it long term may not be realistic, and may have a deleterious effect on your business. Increasing your profit margin may be attainable, but not realistically sustainable if your competitors maintain a lower price point. Increasing your client load may be attainable, but not realistic if the workload that comes with more clients can’t be maintained. The relevance of your goal takes a more wholistic view of your business, and its environment, in order to be sure the gains outweigh the potential risks.
Related to specificity and measurability, your goals must be bound by considerations of time. Not only should you be keeping track of how your goals are progressing monthly, quarterly, but also you should keep in mind seasonal considerations. Is your product seasonal, or does it depend on holiday boosts?
A specific example of how SMART works should be observable in the business goal of improving customer relations. Specifically, customer service staff can be increased from 5 to 10 by next year. The increase in staff can be measured over the following year, and the goal will be met when the staff sits at 10. Increased office space and fund availability to accommodate the increased staff speaks to the attainability of this goal. The relevance of the goal is that customer complaints and concerns can be better managed, and individual customers will feel more personally attended to due to the larger staff. In terms of timeline the increased staff will be hired by the end of the year.
Of course, these SMART parameters are not all encompassing.
Every managerial objective and decision should include a multitude of considerations. Often these decisions will need to coincide with the building blocks of your brand we have discussed before. Every objective should in some way revolve around your brand’s story, core values, and consistency. In other words, every decision should be a reflection of your company’s DNA. Every decision must also consider: whether or not you genuinely have the skills to proceed, or know someone who has them; whether or not you have a way of selling your product or service; and the detailed pathway of growth for your business. Every entrepreneur must ask the questions: has it been done before? Is it sustainable? Is it financially stable? Do you have goals for personal growth, business growth? All of these aspects, governed by SMART goal setting, help to begin the process of creating a viable business plan. Daunting, perhaps, but take it one SMART at a time.