How to Set Business Goals and Track Their Progress
Watching your business grow is very satisfying, but now what? As a small business owner, you already understand the value of setting business goals. Goals steer your business in the right direction and help you stay focused on your mission. Yet, even small business owners with goals in place often fail to track their business progress.
To achieve your goals, you need a roadmap. Your roadmap will have specific objectives describing the things you must do to achieve those goals. Roadmaps also give you a series of benchmarks to measure your progress on your way.
What Is a Goal?
Races have a finish line, and crossing that line first is the goal of the race. Goals in business apply to areas like profitability, operations, or growth.
Unlike a short race, a goal is something to achieve over time. That time can be measured in months, quarters, or even years. Whichever it is, you can decide which ones best serve your business’ needs and align with your mission.
Setting Your Goals
To create a goal, you need to understand the direction you want for your company. Analyze your business data: accounts receivables, inventory, cash flow, marketing, and operations (how you execute on your sales). Understanding your current situation allows you to see the big picture and make better decisions. All this helps you understand market trends and create a more realistic, obtainable goal.
Use the acronym GROW as a guide to developing your business goals and objectives:
Gather: Financial information and how you operate your current business.
Resources: Utilize your employees and business networks to their fullest potential.
Objectives: Describe each step toward your goal and create a roadmap.
Waste: Eliminate any unnecessary action or business practice that may delay or prevent you from achieving your goals.
Objectives to Grow Your Small Business
When traveling to new places for the first time, you usually follow a map. You know where you want to go. You just need a little direction. Along the way, you recognize milestones that let you know you are heading the right way. On the roadmap toward your business goal, these milestones are called objectives.
An objective is a specific, measurable step that shows that you are making progress toward your goal. Your objectives are associated with specific dates and data, such as revenue or cash flow. Keeping track of objectives keeps you focused, efficient, and on track.
An excellent example of a simple roadmap for a small business is the following:
Your one-year goal
Starting on January 1st: increase your product offerings by 50%.
Your objectives would be:
- Increase cash flow by April 30th,
- Research top-selling products in the market before June 30th,
- Expand warehouse space by July 31st,
- Increase the number of SKUs by 10% for each month, starting in August.
A goal is general. Objectives are specific and incremental. And don’t be afraid to change the objectives to get to your goal. Flexibility is important, and if something isn’t working, change it.
Not only is tracking goals fun for you and your employees, but it’s also good for employee morale. According to Locke’s Goal Setting Theory, employees are motivated by clearly set goals and workable feedback to help them achieve them. Put company goals on a whiteboard and allow your employees to participate in tracking their progress and bringing them to fruition.
Goals, Clear and Simple
Unrealistic or unclear goals can set you up for disappointment. Olympians also set big goals, but they follow a roadmap with small steps toward the gold medal. They meet the objectives they set for themselves on the road to their ultimate goal. Don’t be afraid to go for the gold.