Business, Politics, & Society

The Ultimate Guide to Setting Business Goals

Written by MasterClass

Last updated: Nov 18, 2019 • 3 min read

Starting or running a business requires deliberate planning and goal setting. A healthy company will have a clear set of consistently updated goals to help it achieve smart objectives.

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What Are Business Goals?

Business goals are precise articulations of what your business will achieve within a particular time frame. They are more specific than your overall mission statement and fall under the umbrella of your business plan. Whether you're a massive corporation or a small business, having clear business goals that are time-bound and attainable allows you to orient your company in the right direction as you grow.

4 Tips for Setting Effective Business Goals

  1. Set goals that are clearly defined and not overly complicated.
  2. Set goals that establish both a short-term and long-term strategy for your business.
  3. Set goals are ambitious but achievable.
  4. Set goals that help your team see the overall company vision and require teamwork to attain.

How to Use SWOT Analysis to Measure Your Business’s Health

In order to set business goals, you have to know where your business stands, and one way to evaluate your business status is to conduct an analysis of your company’s SWOT—an acronym for Strengths, Weaknesses, Opportunities, Threats. A SWOT analysis enables you to assess where you need to improve and how you need to grow.

  • Strengths: The things about your business that are working.
  • Weaknesses: The things about your business that need fixing.
  • Opportunities: The markets, processes, products, and other factors where your business has the potential to grow.
  • Threats: Challenges to your business success from competitors, shifting demand, etc.
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How to Use the SMART Method to Set Business Goals

Once you’ve evaluated your business and can see how it stands to grow within your industry and market, you can set accurate and attainable business goals. Before you do this, though, you’ll want to familiarize yourself with the concept of SMART goals—an acronym for Specific, Measurable, Attainable, Realistic, Timely. This approach is a time-tested technique for developing goals that innumerable companies have found effective.

When setting goals, business owners who employ the SMART method evaluate their goals on the following basis:

  • Specific: Can you explain your goal clearly to your staff? Say your overall goal is to boost market share and increase revenue. That's all fine and good, but what are the specific actions you can implement to move toward those goals?
  • Measurable: Will you be able to track how far along you are toward achieving your goal? Say your goal is to boost customer satisfaction: What metrics will you use to track how consumers feel about your product?
  • Attainable: Based on your homework about your business, your industry, and your competitors, are able to achieve your goal?
  • Realistic: Have you taken into account all the factors that will affect your ability to reach your goal? What obstacles do you face? Do you have sufficient resources?
  • Timely: Have you set a timeline for your goal? Will you be able to attain your goal in a reasonable amount of time?

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What Is the Difference Between Goals and Objectives?

Business goals are typically broad and lofty whereas business objectives are more precise. Objectives should be incorporated into your goals as a means of attaining them.

  • Business goals are generalized and long-term. Once you've established your company’s business goals, you can break them down into individual business objectives.
  • Business objectives are specific and short-term. They are milestones that help you track your progress toward your business goals. If one of your business goals is a certain rate of customer retention, perhaps you'll set the objective of rolling out a new product once every six months as a way of keeping customers interested.

How to Set Objectives to Help You Attain Your Business Goals

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As you work to achieve your business goals, you’ll need to develop business objectives in a way that is workable for your staff. Business objectives provide a concrete gameplan that allows your team to achieve the company goals.

  • Know who will be involved. Implement a performance management system for doling out assignments. Build the company objectives into your staff performance reviews and reward those who achieve objectives.
  • Create action plans. These should include specific tasks for specific people. Make sure individuals have ownership of particular pieces of the plan.
  • Establish a timeline. Set deadlines for reaching the company’s goals and individual objectives.
  • Provide sufficient resources. Ensure that your team is equipped to do what they’re asked. Build your business objectives into your budgeting process.
  • Be a leader. Clearly communicate your business goals and business objectives. Describe the final destination so that your employees know what they're working towards. Keep them updated. Be transparent. Be honest. Inspire your team.

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