How to Establish Business Goals for the Fiscal Year
It’s easy to get caught up in all the details involved in operating a small business, whether that means hiring someone to run your accounting department, planning for taxes coming due, or setting weekly sales targets. Sometimes it's hard to have to sit back and ask yourself, "Why did I start the business in the first place?"
But it's an important question to ask. And, if you don't know the answer, your firm is wandering aimlessly in the market. Who knows where you'll be in a year's time? You certainly don't and, chances are, you won't magically end up where you want to be.
That's where goals come in. They’re the lighthouse on the shore as your boat is tossed about in stormy weather. They are the North Star as you wander through the dark forest of your industry.
As a small business, you must have clearly articulated goals that show you and your employees where you're headed.
Overview: What are business goals?
Business goals are descriptions of what a company hopes to achieve over a period of time. A company may set short-term business goals it plans to achieve in the next few months, such as an increase in outreach to a certain type of market within the next quarter. Or they could be long-term goals, such as expanding into the international market in the next few years.
These company goals serve as milestones that a company anticipates reaching, guiding the firm’s daily activities and planning. They signify the company’s larger purpose, which is often much more ambitious than what the company is doing today. These goals help focus the efforts of employees, prompting them to act proactively rather than simply responding to external forces.
Business goals vs. business objectives: What's the difference?
Goal-setting and objectives bear some similarities, but their key difference is that goals tend to be more abstract and aspirational compared to objectives, which are more concrete and describe specific actions taken to achieve the objective. Company objectives tend to be time-sensitive and, while goals can be as well, they typically don’t involve hard-and-fast deadlines.
How to create goals for your small business
Goal-planning is essential to any small business. Firms should identify challenges and what goals can best guide the company where it is trying to go. The following three steps will help you establish your own goals.
1. Make it measurable
While you don’t need to set strict deadlines or numbers for goals like you would objectives, your goals should be measurable and not vague. Be clear in the formulation of these goals so that you know when you have accomplished them. The clarity will make it easier to hold people accountable for results.
Consult with your team members and get them personally invested in these goals, and keep them in the forefront so everyone involved will remain focused -- even when you encounter inevitable obstacles. Write them down and keep records of these goals.
Tip: Draft an action plan for each goal. What activities should you take today to get yourself one step closer to that goal? What should you accomplish within the next quarter and within the next year? Create a road map that will guide you toward that goal, with milestones along the way.
2. Drive commitment
A goal is no good if you’re the only one with buy-in -- you need your team to also be committed to the goal. The best way to do that is to have them involved in drafting the goals. If it’s just you setting the goals, you’re the only one who’s going to be invested in achieving them.
After setting your goals, continue to motivate team members through the entire journey, and be flexible in making adjustments. Provide some rewards or other incentives to those who help move the ball forward.
Tip: Create clear roles and responsibilities. If people aren’t sure what they’re responsible for, their motivation to achieve the goal wanes. On the flip side, if your team knows exactly what their role is, they’ll take ownership of the results.
3. Trumpet in public
Don’t keep those goals to yourself -- broadcast them to the company and to the world. When you establish a vision, show everyone what you stand for, and don’t be ashamed of it. Broadcast it internally and post it on your website.
This not only motivates you and your team, but it also holds everyone accountable as the world watches to see if you act on your goals. Team members become more invested, and everyone takes it more seriously.
Tip: Be ambitious with your goals. People expect to see bold vision statements when they visit a company’s website. Goals that are too small don’t get buy-in because they don’t seem worth achieving.
Examples of business goals
Good business goals are easy to understand, concise, specific, and not tied to a certain deadline. Here are a few examples of goals that a business might set.
1. Boost profitability
Let’s face it: While companies often have lofty goals involving solving the big problems of humanity, the ultimate purpose of a business is to make money. It’s good for a company to set a goal for increased sales or a reduction in expenses -- or really anything that increases the bottom line by a certain percentage and allows the company to grow. Goals like this should have monetary incentives for team members.
2. Increase market share
Another major goal of companies is to get a larger foothold in a market. That could include more resources devoted to digital marketing, a new product release, or improving hiring practices. When you’re the big fish in a small pond, you have an advantage over your competition and can control your own destiny.
Businesses setting this goal are seeking a bigger clientele and want to sell more products and services -- or even introduce new products and revolutionize their market.
3. Enhance training efforts
Sometimes to grow as a company you need a solid foundation, and firms that are looking toward long-term future growth may aim to boost training efforts. This increases the effectiveness of their employees and keeps them around the company for longer, thereby reducing turnover. This requires a greater investment by the firm, and it should heavily involve input from the workforce.
4. Improve customer service
Customer service can make or break a company, so if a business is lagging behind in this area, it may seek an edge over the competition by reforming its customer service to be the industry standard. This helps the firm realize other goals, such as profitability and market share. The aim is to improve client satisfaction and also make employees feel like they’re really helping people, which increases buy-in.
It’s time to plan your company’s future
If you haven't drafted clear, coherent goals before launching your business, or if they're in dire need of a reboot, you've put the cart before the horse. Fortunately, there's always time to change course -- but you've got to do it as soon as possible.
One of the best small business tips you can get is to focus on your goals first and everything else second. That's because business goals serve as the rudder guiding your ship in the right direction. It does no good to sail around the ocean only to end up in the wrong port.
So set aside a couple of days to really think deeply about your small business plan and where you want your company to go, and then get your employees involved as well. Take this process seriously and give it the time it requires. You'll find that once you land on your purpose as a firm, everything else will get a lot easier.
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