Managing a business can be challenging sometimes, which may always be the case. There will be times when you have to make important decisions. Having a list of reasonable goals will help set a clear direction where you want to take your business. Why is goal setting important in business? It’s more important than you might think, which can lead to better outcomes for your business.
In this article, I’ll go over what goal setting is about, along with giving some reasons why it’s important. Also, I’ll go over how to set goals in the simplest manner possible.
What is goal setting?
Setting goals is writing out clear intentions of what you want in life (personal or professional). In this case, what are the desired outcomes you want out of a business?
It helps to understand what you want out of a successful business. If that means having a profitable business or simply helping and serving others, there’s a purpose to running a business.
The following reasons can help you get a better idea of why they’re crucial to having a successful business in the long run.
- Stay Focused
- Improves Communication With Others
- Keeps You Transparent (Hold Yourself More Accountable)
- Reach Your Numbers Accordingly
- Breaking Down Your Numbers
Setting goals can immensely help with planning ahead of time. If you don’t plan that often, it can be harder to figure out what you need to do (or how to go about your work).
As an example, you may become accustomed to doing whatever you feel like. It’s why having a plan in place can get you in the habit of doing what needs to get done.
Business owners should plan for the short-term and long-term. When it comes to short-term planning, consider the following questions:
- What do you want to accomplish in the next 30 days? Or the next six weeks?
You can apply the same thing when it comes to long-term planning. When looking over that, consider the following:
- What do you want to accomplish in the next six-twelve months? Or what about the next five-ten years?
How I go about planning my business
When I plan out my goals, I tend to be a long-term thinker. Sometimes, thinking long-term can be demotivating, as it can seem far-fetched.
Often, companies follow a traditional approach to setting out goals annually. These can be broad goals that the company wants to accomplish in the year ahead.
My problem is that a year can be a long time to accomplish those goals. With broad goals in mind, things can change throughout the course of a year.
Instead, I like to do quarterly goals (set goals for every 90 days). It helps keep me focused on my goals, and better to plan out things in a shorter time frame.
There is a great book on this subject called The 12 Week Year, which breaks down how to accomplish your goals in three months (rather than 12 months). It’s well worth reading if you want to plan out things differently.
When you have goals set in stone, it can help with maintaining focus. Whenever you get off track, you have goals you can refer back to. It’s possible that it can happen from time to time.
On a daily basis, you’ll know what you have to do to accomplish those goals. If not, you’ll get in that bad habit of doing what you feel like doing.
When it comes to checking email or doing deep work (i.e. writing a report, planning out or working on a project), that’s where the focus component comes in. Unless you plan well, email is not considered focus work, which can consume a lot of your time.
Improves communication with others
It will be easier if you share your goals with the people you work with. Whether you have business partners or manage a team, it helps to know what needs to get done in a business.
If you and your team share those similar goals, it’ll be easier to work together. Also, you may be able to accomplish those goals sooner than later. The more you work together toward a common goal, the more effort you will put into it.
Keeps you transparent (Hold yourself more accountable)
When you have goals set in stone (i.e. written down), there’s an expectation that you’re going to work towards achieving them. If you don’t live up to them, it’s possible you didn’t take the necessary action early on.
Without setting goals, it can be harder to live up to the expectations for your business. So you make sure you’re holding yourself accountable. It can help with making better decisions as well.
Reach your numbers accordingly
If you want to make a specific amount of money, you need to know your numbers. It’s good to write out your revenue goals so you can refer back to them later on. Without those goals, you’ll have no idea if you’ll earn the desired amount you want for your business.
If you want your business to make six-seven figures in a year (but it’s only making less than that), you’ll need to reevaluate your money goals. Especially if you want to be in the million-dollar range, it’s going to take a lot of effort and hard work to reach that milestone.
Breaking down your numbers
Let’s take a hypothetical example. Suppose you want to make $100,000 a year for your business. Breaking it down, here’s the basic rundown of the numbers:
- $100,000 per year < $8333.33/month < $277.77/day < $34.72/hour
Overall, looking at the smaller number can be easier to start off with. So earning $34.72/hour should be your starting point, and then work your way from there.
So are these numbers possible? Certainly, but it will take time and effort to reach that milestone. The challenge is well worth taking on, and it can motivate you to achieve your long-term goals.
How to set a reasonable goal?
It’s not that difficult to set out your goals: All you need is some time and effort to do so. One common approach is by using the SMART method.
This acronym stands for the following:
If you understand this approach well, it’ll be far much easier to accomplish any goal. Here’s one example I’ll use in regard to the professional world.
|Specific||I will find six clients for my private consulting business.|
|Measurable||I will keep track of my progress while working on my current client base.|
|Attainable||I will network locally (and online) while at the same time launching a marketing campaign through social media.|
|Realistic||Adding more clients will help grow my business in the long run.|
|Time-Bound||I will obtain six clients in the next four months.|
Looking For New Clients For Your Business
I think this one is a great example of how to use the SMART method. Now think about how many goals you can accomplish using that method. If you can do that and follow through effectively, it can be easier to accomplish any goal.
Setting goals in your business is crucial to long-term success down the road. Thinking about the long-term picture, you want to build something bigger.
By that, do you want the ability to have financial freedom? Or do you want more time to do things you find fulfilling?
The reasons laid out earlier can help make goal setting easier to work on. When you refer to those reasons, you will have a better understanding of what you want from your business.
Your Turn: How do you set goals in your business?
I would like to get your thoughts on this topic. Do you believe setting goals is important for your business?
Do you like using the SMART acronym when writing out your goals? What challenges have you had in accomplishing your goals?
What can you do differently about it? Do you want to set reasonable goals that are simple to achieve over time?
Feel free to share your thoughts by leaving a comment below. I look forward to reading your responses, and I’ll gladly respond promptly.
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Eric is the owner and chief editor of notimekillers.com. He takes great pride in helping people manage their time and grow their businesses. Eric is a firm believer in financial and time freedom, as he believes in financial independence and taking ownership of your time. “Time is your most important asset. It can be your best friend or worst enemy. How you use your time can shape the future you desire to have.” In his leisure time, Eric loves to write and read whenever possible. He enjoys going for long walks outdoors while doing in-home workout videos every week. You can also connect with Eric via LinkedIn.