In order for your business and the whole business to have a direction, you need to have goals in front of you. They must be neither too exaggerated and grandiose, nor too low, so that they don't discourage but motivate you. SMART goals are just that, according to the method of the same name. Learn how to set them.
Why it is important to have business goals
Goals are usually part of a business strategy, they set the direction of the business and are a measure of success. Properly set goals are a guideline for everyone in the company to work and activities to reach their goals.
Thanks to goals, everyone in the team has a clear idea of why they are doing certain activities. At the same time, they can always ask themselves whether, thanks to their work, they are bringing the company closer to the set goal - if not, they can rather focus on more useful things. The goals thus represent an imaginary path along which the team sets out. Otherwise, he would just wander around.
The main advantages of goals are that:
- they support teamwork,
- allow to measure the success of the company
- and they give clear direction to individual teams and the entire company.
How to set goals in business
The SMART method will help you to set goals for your business. It is an acronym of the initial letters describing the characteristics that SMART goals should have.
SMART goals are, according to it:
- S – specific – defined as precisely as possible so that everyone has a clear idea of them and knows where they are going,
- M – measurable – i.e. set in such a way that their fulfilment can be measured, expressed in a numerical value,
- A – achievable – appropriate to the market situation, the number of employees or your finances, so that these goals are also accepted and embraced by everyone concerned and everyone tries to meet them,
- R – realistic – neither high nor low, i.e. goals that you will not meet right away but will motivate you,
- T – time-bound – set a deadline for when you have to meet your goals so that you can evaluate whether you have achieved them.
SMART goals have the advantage of:
- the team knows exactly what they need to do to achieve the goals,
- they divide the path to the goal into sub-steps,
- minimize unnecessary work with unclear benefits,
- they motivate better thanks to their reachability.
The objectives should be based on the business strategy. If you don't have it, read how to set it up.
SMART goals - examples
When setting goals, always make sure they meet all five of the above points. Try to define and describe them as accurately as possible so that you know by when you need to meet them and how to assess whether you have achieved them.
Instead of vague goals:
- to improve business,
- sell more,
- reach more leads,
- make more leads,
- close more deals,
- not lose clients,
set SMART goals like this:
- Increase sales by 10% in the next quarter,
- to achieve a turnover of one million crowns within 2 years,
- reach twice as many leads next month,
- make 20 cold calls a week,
- close 5 more deals next year than last year,
- not lose more than 5% of clients per year.
You can have several goals in the store, usually one basic goal and several sub-goals are recommended. The primary goal tends to be long-term and more comprehensive, while the sub-goals are smaller and shorter-term, achievable within a year. However, the five conditions for SMART goals should all be met, all the time.
Once you have your goals defined, make sure everyone knows about them. Make all colleagues or employees aware of the goals.
SMART goals in practice
Here are some examples of properly set SMART goals to inspire you.
Increasing attendance at regular conferences
S (certainty) – We want to increase attendance to our regular events by 25% this year and we will achieve this by sending a series of personalized emails before the event.
M (measurable) – We want to increase traffic by 25%.
A (Reachability) – We have people to write the personalized emails and we have a tool to send them.
R (realism) – Last year, attendance increased by 25%, so we know that the same result this year is realistic.
T (time limit) – The conference takes place in March, June and November, so we will then average and evaluate the attendance.
Reducing customer churn
S (certainty) – We will reduce the churn rate of current customers by 7.5% compared to last year.
M (Measurability) – We will reduce churn by 7.5%.
A (reachability) – We can evaluate which customers are at risk of leaving and have customer support that will call them, ask for feedback and find a solution.
R (Realism) – Over the past year, we've improved our product, added features that the competition doesn't offer, and improved customer support, so we believe customers will stay with us longer.
T (time limit) – We start measuring at the beginning of January and evaluate the results at the end of June.
To make the goals even SMARTER
There is nothing left to do but to gradually meet the goals and then evaluate them. The SMART method is extended by two more letters:
The goals should still be:
- E – evaluated,
- R – rewarded.
Evaluate your goals regularly to see if you have achieved them. If so, it's time to reward yourself - and thus motivate yourself to achieve more goals.
How to communicate SMART goals to the whole team
In order for SMART goals not to remain stuck in a document, the relevant people must know about them. That is, not only managers and team leaders, but also all team members. The following steps will help you with this:
- Introduce the goals. Choose the channels to communicate SMART goals to them - hold a meeting with a presentation or send an email. The key is that everyone on the team knows about the goals and confirms it to you.
- Monitor progress. Create a place where you keep track of your goals and make it accessible to everyone. It can be a spreadsheet, a project management tool or perhaps a CRM. Summarize the results so far at regular meetings.
- Collect feedback. Gradually find out how people manage to move towards their goals. If you find that they struggle with an objective, maybe it was just set up wrong or you forgot about a potential obstacle. In this case, adjust the goals continuously.
- Evaluate. Whether you have achieved your goal or not, stop and analyze the results. Discuss with the team how their goal was met, what knowledge they take away from it or what the company should take from the results for the future.
Check how you're doing on your SMART business goals in CRM. Among other things, it will help you keep track of your leads and where they are in the sales process. Try CRM for 30 days for free and see how much work it makes easier and whether it's worth it.