You’ve likely heard many tips about starting a business that is both successful and profitable. Focus on content marketing, build your email list, launch an eye-catching website—the list goes on.
All of these tips involve setting goals for your business. However, in order to be successful, you need to be strategic—not just with the goals you choose, but also how you define them.
So, how do you set goals the right way? The answer is simple: Set SMART goals. In this article, we’ll explain what SMART goals are, why they work, and how to implement them in your own business.
Let’s get started.
What Are SMART Goals?
It’s believed that the SMART goals acronym originated in 1981 when business consultant George T. Doran published “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives.” Within this article, he discusses the gap between setting objectives and actually achieving them, especially in the business realm.
To increase your chances of achieving a goal, he proposes that you follow a guideline during the goal-setting process. Every goal that you create should be specific, measurable, assignable, realistic, and time-related. These characteristics comprise the acronym SMART.
As best business practices evolve over time, so have the characteristics that define SMART goals. Today (and for the purposes of this article), a SMART goal is the following:
Setting goals that adhere to this acronym is the secret to achieving what you set out to do for your business. Here’s why.
The Importance of SMART Goals
Setting SMART goals is similar to writing a business plan. Without a plan of action, your business idea is exactly that—an idea. You manifest that idea into reality by creating a business plan. This step is critical when determining whether that business idea is viable, how much startup funding you need, and what it takes to run and grow your business.
Similarly, the SMART guidelines help you actualize your business goals. It confirms that your goals are focused, actionable, and realistic. It encourages you to think deeply about the steps between where you stand and where you want to be with your business.
Now that you have a better understanding of SMART goals, let’s break down each component of a SMART goal.
How to Set SMART Goals for Your Business
Once you understand each component, you can use this SMART goals template to create all of your business goals moving forward.
SMART goals are specific. Your business goals must be well-defined and articulated. Think of this part as the overview when writing your business plan. While it doesn’t dive into the details, it addresses the main points of your business goal. Within this section, you will want to answer the five W’s:
- Who is involved in this goal? This might involve your marketing team or sales representatives.
- What do I want to accomplish? Briefly describe your intended outcome (more on this in upcoming sections).
- Where is this goal achieved? Often, this will be at your place of business. However, it might be at a business conference to improve your skills or a potential client’s office.
- When do I want to achieve this goal? We’ll explore the importance of deadlines in the time-based section.
- Why do I want to achieve this goal? Every goal should have an underlying reason, such as increasing profit margins, improving brand loyalty, or decreasing employee turnover rate.
To help you distinguish a SMART goal from an ordinary one, take a look at this business goal:
Jane wants to make more money in her business.
This goal leaves more questions than answers:
- How will Jane make more money?
- What type of business is Jane operating?
- How much more money does Jane want to make?
- Is there a deadline for making more money?
Now, read the goal below:
Jane is a freelance web designer wanting to increase her company revenue by 20%. To do this, she will onboard three new clients within three months.
This goal is more specific and in-depth than the ambiguous goal above. Review how this SMART goal answers the five W’s:
- Who: Jane
- What: Increase company revenue by 20%
- Where: Her place of business
- When: Within three months
- Why: Increase revenue
Mystery is great for movies and literature, but not for your business goals. If you’re wondering what to do next, spend more time fleshing out your goal.
Do you know why fitness experts recommend that you count your calories? Counting your calories is the easiest and most tangible way to determine whether you’re eating too little, too much, or just enough.
The same philosophy applies to your business goals. How can you determine whether your business is going in the desired direction if you don’t know where you’re heading? Your goals are more than dreams and fantasies—goals act as compasses that lead you to your destination.
When brainstorming measurable goals, try using quantifiers like:
- How much?
- How many?
- By what percentage?
- What amount?
Take a look at this goal.
Benjamin wants to increase brand awareness for his life coaching business.
This goal isn’t quite measurable yet. However, look at what happens when you add some quantifiers to this goal:
To increase brand awareness for his life coaching business, Benjamin will book at least two speaking engagements per business quarter and post daily on social media.
You can quantify and measure what Benjamin needs to do: two speaking engagements per business quarter.
In your business, get obsessed with collecting data. Your business goals should be grounded in hard numbers and reality.
It’s easy to get your head stuck in the clouds when it pertains to your business. You want the very best, but sometimes the end result you visualize is more imaginative than realistic.
For example, let’s say that you want to double your income. Doubling your income might be possible after one year. Doubling your income within one month is less realistic. Falling short of this highly challenging fear can leave you frustrated and disappointed.
Ambitious goals keep you inspired and motivated—however, unrealistic goals have the opposite effect. Remember: Keep your feet grounded in hard facts and reality. Give your business goals a reality check by considering the following questions:
- Do you have the resources available—whether it’s time, capital, staffing—to achieve that goal?
- If not, how can you obtain those resources?
- Have you set a reasonable time frame? Or is it more realistic to push out that deadline?
- Are economic conditions conducive to your goal? Consider how a recession or industry trends will affect your business.
Return to your company’s mission statement for what you want your business to be.
Do you want your business to be a leading figure in eco-friendly products? If you set a goal that compromises the planet, then that would conflict with your company’s mission. If you want to increase brand loyalty among your customers, then investing in product development and customer service would be relevant to your goal.
Let’s take a look at a SMART goal that is relevant to the company’s mission:
Samantha sells handmade reusable grocery bags because she wants to reduce the amount we add to our planet’s landfills. Samantha will publish one blog post per week to both increase awareness and drive traffic to her ecommerce store.
Samantha’s business is built on protecting the planet. Her goal of publishing weekly blog posts is relevant to her brand’s culture, and her goal to drive more traffic to her ecommerce store will help her increase sales.
Whatever goal that you set for your business, remember to keep it on-brand and aligned with your brand’s culture and mission. Deviating will lead your business down a different path and may compromise your brand’s image and customer loyalty.
If you’ve doubled your business growth, that’s great! But if it took you three decades to do that, then your progression was slower than most would prefer.
That’s why SMART goals are time-based. It’s difficult to know whether you’ve achieved your goal if there isn’t a deadline.
If you want to double your conversion rate for people who visit your website, when would you like to achieve it? One week from today? Next business quarter? One year from now? Be clear about your time frame. This will affect the mini-milestones you set along the journey to achieving that goal.
Also, consider setting both long-term and short-term goals. If your goal is to launch your business within six months, set short-term goals like applying for a business loan, launching your website, and securing inventory.
Setting deadlines creates a sense of urgency for your goals and short-term goals keep the momentum strong. You’ll also more easily be able to determine if you’re on track to meet your goals, or whether you need to change your strategy along the way.
SMART Goals Template
Now that you’ve learned about SMART goals, you’re probably eager to apply them to your own business. To help you set SMART goals, check out this SMART goals template created by the University of San Diego. By following this template each time you set a goal, you can ensure they’ll be SMART.
Image credit: University of San Diego
SMART Goals Examples
If the above SMART goals examples still left you unsure how to apply this strategy to your own business, here are two scenarios that further outline the process.
“I Want to Boost Company Profits”
Specific: I will increase company profits by 20% within three months by onboarding three new clients through referrals, cold emails, and ad campaigns.
Measurable: To boost revenue by 20%, I will onboard at least three more clients.
Attainable: This goal is achievable if I ask my network for referrals, send out at least 10 cold emails daily, and run a Facebook ad campaign to drive more traffic to my small business website.
Relevant: Increasing my marketing efforts to onboard more clients will increase my profit margins.
Time-Based: I will implement my new business budget within one month and will onboard at least three more clients within three months.
“I Want to Reduce My Employee Turnover Rate”
Specific: I will improve employee retention by 20% over one year by improving our training programs and scheduling monthly meetings with each employee.
Measurable: Employee retention will improve 20% by one year from today. Also, employee surveys will be sent out to gauge employee satisfaction in the workplace.
Attainable: A one-month training program will ensure that employees are adequately prepared and confident in their roles. One-on-one meetings will be scheduled throughout the month to ensure each employee receives sufficient attention and that concerns can be addressed.
Relevant: Employees become frustrated when their responsibilities are unclear and they’re confused about how to perform their jobs effectively. Improving training will set employees up for success. One-on-one meetings will allow employees to voice their concerns and to receive constructive criticism.
Time-Based: Within one year
The Bottom Line
There’s a saying that goes: If you have five hours to chop down a tree, spend the first two sharpening your axe.
Preparation before execution is the key to success, and failing to do so can result in unnecessary mistakes that can cost you both time and money.
Before you act on your goals, think deeply about why you have those goals and how you can achieve them. Remember: Goals that are specific, measurable, attainable, relevant, and time-based will help you achieve the business you’ve always dreamed of.