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Any successful entrepreneur will tell you the importance of goal setting to maximize your business’ potential.
Not sure where to start? We’ll explain everything you need to know about business goals below.
What are Business Goals?
Business goals refer to the specific articulations of all the things you want your business to achieve within a specific period. These goals fall under your business plan.
One example of a business goal is your mission statement, which is more general and highlights what your business strives towards.
You can also set specific business goals that are more measurable and trackable. Having a clear time-bound business goal helps your company to be oriented in the right direction as it grows.
The Importance of Business Goals
Starting and running a business is no walk in the park, and the truth is, not a lot of businesses make it.
One of the most common reasons this happens is because many businesses fail to set goals. Here are some of the benefits you’ll reap when you set clear business goals.
It allows you to focus on the important things
When companies set goals, it allows everyone in the organization to re-focus their priorities. The main purpose of business goals is to let employees know what they should put more effort into the upcoming period.
This enables them to align their tasks more efficiently. For managers and other high-ranking staff, it allows them to decide the major projects to prioritize.
It helps people stay motivated
Even if you love your business or industry, there will still be instances when you just don’t feel motivated to work.
One of the importance of goal setting in businesses is it allows everyone to stay motivated especially in times when they don’t want to put in work.
Although someone may feel like they can’t give their 100%, they will still move forward because they can visualize the end results.
It defines what success is
Every business owner wants to know whether or not their business is successful.
How can you do this?
Clearly outlining your business goals will give you a picture of what success is. When you set goals, you will push the capabilities of your team.
It enables you to track your progress
Another reason why it’s integral to set business goals is because it is a way to track your progress.
By sitting down and looking at how close you are to hitting your targets, or how many business goals you have achieved, you are able to see the areas of your business that need more work.
You will also know which of your actions are paying off.
It helps you stay accountable
Every responsible business owner will tell you the importance of holding yourself accountable. If you decide you want to achieve something for your business, you need to take all the necessary steps to hit your goal.
If you are constantly falling behind, you know that you have to work harder and see which of your actions you need to change.
Types of Business Goals
Not all business goals are the same. To help you find out what type of goals you should set in place, study the types of business goals listed below.
1. Personal & Professional Business Goals
When you think of business goals, the first things on your list may be hitting your first million, or doubling your number of clients. While these can definitely be goals, these should not paint the entire picture.
To help you find out the best goals to set, remember why you started your business in the first place. These things prove that it’s not all about money. Instead of thinking of your sales as the end-all-be-all, think outside the box.
For instance, your business goal may be to only work for specific days each week or hire more staff so you can be more present for your kids.
2. Short-term & Long-term Business Goals
When it comes to growing a business, you need to set both short-term and long-term goals.
Short-term business goals are ones that you want to hit in a period of weeks or months. For example, a short-term goal can be to reduce your utility bills in your physical store in the next month or get more interactions on your Instagram campaign.
On the other hand, long-term business goals are those that you want your company to achieve in the distant future. These goals are harder to hit and require you to be strategic in breaking down the steps involved in them.
This can include reaching a specific income, opening up new stores, or completely overhauling your existing equipment.
3. Process-based & Outcome-based Business Goals
The reason why you are making business goals is that you want to see results.
Outcome-based business goals are directly related to the results you want. But unlike process-based goals, you have no control over whether you will achieve them or not.
To hit this business goal, you need to have process-based goals which are based on specific tasks and actions that you complete.
Setting process-based goals involves identifying all the things you need to do to achieve a larger goal.
4. Qualitative & Quantitative Business Goals
If you want to ensure your goals have a higher chance of becoming successful, it needs to be specific enough to track.
When you have a vague goal such as “increasing your social media followers,” you’ll end up getting confused on whether you’ve hit your goal or not.
Qualitative goals are more focused on your financial targets and metrics, but you also need to have goals that concern the more nuanced aspects of your business.
These are called qualitative goals. It can include increasing your workplace morale or improving the brand loyalty of your customers.
The secret to creating business goals is to be as specific as possible, especially when defining how much more you want to increase something. Then, don’t forget to set a time period so you can assess your progress better.
Business Goals vs. Business Objectives
A lot of businesses use the terms “objectives” and “goals” interchangeably. However, the two are not the same. Understanding their differences is key if you want to avoid confusion.
To put it simply, a business goal is an aim that you establish to start your business planning process. For example, increasing your Instagram followers by 100% in 6 months is a business goal.
Meanwhile, a business objective refers to milestones that you reach on the way to achieving your goal. This can include creating more relatable content to increase shares and visibility.
Considering this definition, goals are more broad and long-term. These are mostly used to make annual strategies to be executed by different departments in your business.
Related: Business Development 101
20 Best Business Goals Examples for Filipino Entrepreneurs
To help cement your idea of what business goals are, here are some concrete examples that you can apply to your business.
1. Cost reduction
Whether you have a huge corporation or a small business, it may benefit you to reduce your costs to maximize your cash flow.
However, make sure to be specific about what costs you want to target. For example, you can invest in technology to improve business efficiency and increase productivity. This, in turn, reduces your costs.
2. Hiring your first employee
Being a small business owner is hard because you need to wear many hats. If you want to ease your burden, you can set a goal to hire your first employee.
Part of hiring an employee includes defining a clear set of responsibilities. This way, you can have a laser focus on candidates that have the right experience.
Recommended: Hiring Tips for Filipino Entrepreneurs
3. Improve operational efficiency
Improving your operational efficiency is not just one initiative. It is a collective effort that involves people, processes, technology, and financials.
This way, your business can become a well-oiled machine, and deliver quality services even with fewer resources.
4. Minimize tools & energy required for operation
More processes and staff doesn’t always mean more productivity. As an entrepreneur, remember that technology is on your side.
As much as you can, leverage resources to save money, and give you more consistent services and results. This may include automating repeatable work, especially in your administrative processes.
5. Increase online presence
Whatever industry you belong in, you can benefit from having a strong online presence. Considering more people spend hours each day online, building your online presence has become a no-brainer.
By doing this, more people can discover your business, and you can be seen as a more legitimate enterprise. Having an online presence also means having the luxury to guide your customers in their buyer journey.
6. Update your business plan
The first business plan you made when you first started your business may be outdated. Updating your business plan is vital if you want to keep your information up to date.
This will also help you gain more opportunities in analyzing competition, seeking more financing options, and starting a new financial period in your business.
7. Go paperless
Every entrepreneur faces the pressure to improve their company efficiency and decrease costs. One of the ways you can do this is by going paperless.
Technology has made this easier, and while this can be intimidating for some, it can give you tons of benefits such as improved collaboration, security, and access. It’s also more eco-friendly.
8. Reach out & help the local community
Without question, the people close to your business are more likely to become your customer base. Because of this, you have to cater to their needs.
Reaching out to people in your local community will increase brand trust since more will catch wind about your business with little effort towards advertising.
9. Improve the company’s brand & image
Your company has a unique personality. While you serve the same needs as your competition, you need to make an effort so customers won’t confuse you with other brands.
After all, no one confuses McDonald’s for Jollibee. So how can you improve your brand image, especially online? The best way to do this is to communicate your brand voice and values clearly in your collateral, as well as your service.
10. Leverage social media marketing
Social media marketing refers to using social media networks such as Instagram, TikTok, and Facebook to market your products and services.
The moment you prioritize this, you can ramp up your customer engagement, and reach new people in an inexpensive way.
More than that, social media also has built-in analytics so it will be easier for you to measure the success of your efforts.
11. Increase market share
Market share refers to the percentage of a market your company earns. It involves your total sales in relation to the overall industry sales.
If your goal is to hold more market share, it means increasing your customer base, as well as improving your reputation.
You will also enjoy increased bargaining power, as well as an upper hand in negotiating with your suppliers.
12. Business expense reduction
In today’s uncertain market condition, every peso counts. Even the smallest revenue increase can impact your profitability.
Aside from expanding your sales, one way you can do this is by reducing your expenses. This can include your production costs, supply expenses, insurance policies, and even marketing efforts, among many others.
13. Perform a marketing audit
The marketing landscape and needs of your customers change constantly. Because of this, you need to conduct a marketing audit every once in a while.
This involves assessing the strategies and targets of all your marketing activities. After doing this, you can identify your areas of weakness, and have an overview of the tools at your disposal that can improve your future outcomes.
14. Make a better & more cost-effective product
Whether you already have a huge market share or not, you will surely benefit from making more cost-effective products.
This arduous process involves studying cost trade-offs of various concept designs, as well as evaluating tons of design and supplier alternatives so you can come up with the lowest cost without sacrificing quality.
15. Enhance customer service
Customer service involves giving your customer what they want in the best way possible. This will give you a greater chance of increasing your customer base and raking in favorable word of mouth.
When this is included in your business goals, you can also seek feedback from your customers, streamline your processes, and strengthen your team.
16. Run a leadership development program for managers
Implementing a leadership program for your business is required if you want to keep up with the current climate.
All your staff needs reliable and strong leaders whom they can turn to for support and guidance, and a leadership development program will do wonders to increase the competency of managers and give employees the opportunity to build the necessary skills to move up.
17. Increasing production
For many businesses, increasing production is the ingredient needed for them to grow. Providing more services and products to your customers can translate to better profits.
As production increases, your company can also pay stakeholders faster, as well as retain a larger cash flow to be used for future expansion.
18. Launch a new product
If you’ve had the same products and services for years, chances are, your customers want something new. Change things up by studying the current market and trying to fill a current gap.
If launching a new product is something you can’t afford to do, try marketing your old product in a new light.
19. Open a new branch
Despite the success of eCommerce, brick and mortar shops still continue to do well since it provides customers with a tactile shopping experience.
If your company is ready, maybe it’s time to open a second location to expand your footprint and cater to more customer demand.
20. Open the brand for franchising
Want to enjoy the benefits of a bigger company without all the work? If so, open your company for franchising.
When you’re finally ready to take this plunge, you need to set aside time and effort to manage and guide your franchisees. This way, you can help them grow their business while keeping your brand image strong.
7 Tips for Successfully Setting Business Goals
Successful businesses set goals to reach milestones, irrespective of their industry. Here are some tips to keep in mind when setting your business goals.
1. Use the S.M.A.R.T. system
When you spend effort and time visualizing and specifying your goals, you’ll have a higher chance of achieving them. However, being as descriptive as possible does not come easy for many entrepreneurs.
To make this simpler, use the SMART system to guide you. This means:
Specific – What exactly do you want to accomplish? Specify the Who, When, What, Where, and Why.
Measurable – How will you measure your progress against your specific goal?
Achievable – Can you achieve your goal with your current skills and resources? What do you need to change to achieve it?
Relevant – Are your business goals in line with how you see your business in the next few years?
Time-bound – When is the realistic deadline you want to set for yourself to achieve this goal?
2. Study & research companies in the same field
As you make an effort to increase your market share, developing a better strategy becomes more crucial. Considering this, studying and researching your competition is an important step you should not miss.
If you forego your competition, you won’t have a clear picture of the strengths and weaknesses of other businesses, and how they are attracting potential customers and retaining old ones.
When you take time to research other companies in the industry, you can learn from their failures and successes and apply these things to your business goals.
3. Use the O.K.R. framework
Broad business goals can be extremely useful, but if you want your company to adapt more, you need to break this down into smaller steps. One way you can do this is by following the OKR goal-setting framework.
OKR means Objectives and Key Results. This goal-setting methodology was pioneered by Andrew Grove, former CEO of Intel.
This framework involves two basic parts. First is the Objective, which is qualitative and tells you what areas you want to improve.
The next is Key Results, which is quantitative, and defines how you will find out if you’ve achieved your objective.
You can look at it this way:
(Company name) will (objective) as measured by (Key Results)
Two techniques that make this framework unique are weekly check-ins and initiatives. The former helps you track your accomplishments and other plans, while the latter includes the plans and projects that will enable you to achieve your objectives.
4. Be specific
Do not be afraid to go into the nitty-gritty details of each goal. Define each peso. Outline each percentage. List the duration you need to achieve it. Examine who can help you achieve your goal. Be as specific as you can.
Doing so will make it easier to track your performance and progress. Having a specific goal will also bring you more clarity, as well as avoid confusion.
5. Track & measure your progress consistently
Failing to measure business performance will give you a skewed picture of your standing in relation to your business goal.
Whether you want to do this weekly, bi-monthly, monthly, or quarterly, you have to look at relevant business metrics and other performance indicators to know the progress of your goals.
Consistently and regularly monitoring your progress will also protect you from financial and organizational problems.
6. Break down long term goals into actionable steps
Long-term goals can take a long time to reach, and it can be easy to lose track of your end goal and lose your motivation because you’re not seeing any results.
After all, long-term goals have been proven to be psychologically taxing, not to mention very intimidating. Think about it this way – your long-term business goal should serve as your North Star.
For example, no one expects you to hold 50% of the market share in one go. Instead, every marketing effort increases your market share until you reach your goal.
Breaking down your large goals into more manageable chunks will make them seem easier and more realistic. It also provides you with a clearer action plan that won’t make you feel overwhelmed.
7. Identify the resources you’ll need to hit your goals
If your goal is to improve your customer service, do you have everything you need to do so? Is your customer service team ready? Do you have the right software to handle customer queries? Do you have the budget to hire more staff in your physical store?
Answering all these questions in advance will make your journey more seamless. Perhaps your customer service team is already drowning with work. Calculate how much effort you can expect from all your identified resources before you let them know what you expect of them.
In every business goal, knowing the people and work required to achieve it is part of the bid. When you know this key information, you can start looking at the resources required and break it down into a clear project plan.
This will enable you to identify tasks that need to be ticked off and give you an idea about the software, skills, and tools required to complete specific tasks.
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