Tips for Setting Better Business Goals

What is a business goal?

Business goals are objectives tied to your vision for your company and the achievements you want to accomplish. In this way, a business goal differs significantly from a New Year’s resolution and has way more money riding on it than a gym membership fee. 

Business goals may pertain to the whole company, certain departments, specific groups of employees or other areas of the organization. Depending on the purpose, the goals you set to help your company progress can be daily, quarterly or yearly objectives. If you created a business plan, you may have already mapped out your goals as action strategies. However, it’s essential to continually reassess your goals and set new ones to accomplish strategic growth.

What are SMART goals? 

When you set business goals, it helps to be “SMART” — the goal-setting acronym for “specific, measurable, achievable, relevant and time-bound.” SMART business goals can be highly effective when the framework is applied accurately. Here’s what to consider when you set a SMART goal:

Specific

It’s essential to determine precisely what you hope to accomplish and what actions you must take to reach your objective. Let’s say you want to expand your revenue. These are some of the specific elements to decide on as you set that goal:

• The dollar amount or percentage of revenue growth you want to achieve
• Which department or individuals will drive this process
• What steps they will take to work toward this goal
• What resources you’ll need to allocate to help your staff meet this objective
• A deadline for when you expect to reach the objective

Measurable

Measurable goals use metrics such as dates and numerical values to define success. This approach not only encourages you to focus on the end goal but also helps you evaluate how well your efforts are contributing to accomplishing the objective, which can keep you and your team motivated. In the above example, your measurable goal might be to increase your sales by $5,000. You might decide this should happen in 30 days and then ask each sales team member to follow five extra leads per week in hopes of meeting this objective.

Achievable

For a goal to be achievable, it must be realistic. For example, a goal to make $1 million in one day isn’t attainable for most of us, and creating such a goal would be setting yourself up to fail. Even though your goals should require you to expend extra effort, they should be reachable. Balance high aspirations with feasibility by setting goals that are a stretch but not impossible with hard work and the right resources.

Relevant

A relevant goal is an objective that matters to your business; it should make sense and relate to your company’s mission and needs. Continuing with the example above, would increasing your revenue make a difference to your business? Of course! However, not every business goal needs to be about revenue.

“If one of your big values is to serve others to the best of your abilities, then merely setting a revenue-based goal isn’t going to be enough to motivate you,” Heather Moulder, a leadership and business coach at Course Correction Coaching, told us.

At the same time, a goal to bring in pizza for the office three times a month probably doesn’t seem all that relevant. But if the real purpose of that objective is to have a dedicated time where employees can mingle and foster camaraderie as part of a larger goal to strengthen your company culture, that goal may be justifiable.

Time-bound

A time-bound goal has a deadline for the work you intend to do. When there isn’t a time limit, it’s difficult to measure progress and hold team members accountable. Deadlines can push your staff to action and help them work efficiently toward company goals.

What are examples of business goals? 

Understanding what makes a good business goal can help you model your own goals for your organization. 

Using the SMART framework and the revenue example above, a fully formed goal may look something like this: “Increase sales by $5,000 within 30 days using our CRM system to track lead progress.” In this example, “Increase sales by $5,000” is a specific and measurable goal that relates to growing your business, “within 30 days” is an achievable deadline, and “using our CRM system to track lead progress” is the specific way you will measure whether the goal is reached.

Business goals can also be about your employees. If your overall objective is to improve or grow your team members’ skill sets, you can do so through smaller goals. For example, these might include finding ways to invest in employee training, such as hiring a professional instructor. Then, your goal may be something like this: “Hire a training manager by March 1 to host six weekly workshops to train staffers on using large language models to increase employee productivity by 10 percent before June 30.” To measure success, you can outline specific ways team members will be expected to use their new artificial intelligence skills and track the results.

How do you write an effective business goal?

It’s one thing to have goals in mind, but you need to make them official and share them with your team. 

“The physical act of writing down a goal makes it real and tangible,” said Angela Civitella, a certified business coach and founder of Intinde. “You have no excuse for forgetting about it.”

Here are two strategies to help you write effective business goals.

Write in an active style.

Use a strong, active voice when you write your goals. The language you use affects how you perceive your goals and whether you get them done.

“As you write, use the word ‘will’ instead of ‘would like to’ or ‘might,’” Civitella said. “For example, ‘I will reduce my operating expenses by 10 percent this year,’ not ‘I would like to reduce my operating expenses by 10 percent this year.’ The first goal statement has power, and you can ‘see’ yourself reducing expenses. The second lacks passion and gives you an excuse if you get sidetracked.”

Narrow down what’s important.

As you start drafting your goals, make sure they’re important to you and your company. Ask yourself, “Do these goals motivate me?”

“If you have little interest in the outcome, or they are irrelevant given the larger picture, then the chances of you putting in the work to make them happen are slim,” Civitella said. “Motivation is key to achieving goals.”

It’s possible to have too many goals, so ensure you set only extremely valuable objectives that are reasonably attainable. A long to-do list with only two items crossed off can cause disappointment and frustration, which can reduce motivation and be incredibly destructive. The same is true when you’re working toward goals and are struggling with too many that aren’t truly important, Civitella said.

“Ask yourself, ‘If I were to share my goal with others, what would I tell them to convince them it was a worthwhile goal?’” she said. “You can use this motivating value statement to help you if you start to doubt yourself or lose confidence in your ability to actually make the goal happen.”

Tips for setting better business goals

Before you actually sit down and start typing out your goals in a company-wide memo, you should take the time to really think through where you see your business going and what it will take to get you there. Here are a few tips to keep in mind for better goal setting.

Look at where you are. 

To determine where your business should end up, you need to understand where you are now. By evaluating your current operations, you can identify potential growth areas and untapped target audiences or markets. You must also assess what your competitors are doing to see what’s working for them and what mistakes you should avoid. A SWOT analysis is a great tool for this evaluation and a solid first step toward planning your business goals. 

Get everyone involved. 

Setting the right course for your business isn’t just a job for upper management. You should get everyone on staff involved. Solicit input on strategic objectives from all departments and employees at every level. This will allow you to identify opportunities that management might have missed and help your entire organization feel more connected to the company mission. 

Talk with your customers and potential customers as well. There’s no better way to understand the wants and needs of your target audience than to go right to the source. Ask what they love about your business and what they wish you did better. But don’t stop there — also talk with people who chose to purchase from your competition to find out why they passed your business over. 

Build a road map.  

A critical part of the goal-setting process is making an action plan for moving your business forward. Start by differentiating between short-term and long-term goals. Then, determine which goals to prioritize so you know the best way to allocate resources. All of this information should form the basis of a business growth plan.

No matter the time frame, break down each goal into smaller, actionable objectives. Business success involves carefully planned steps, not blind leaps. Let key players know what their responsibilities are for each step, and tie organizational goals to employee performance goals as much as possible. Make sure to use the SMART framework for every mini-goal to ensure everyone has a clear understanding of their target. 

Track your progress.

Another vital part of the goal-setting process is determining which metrics to track as you work toward accomplishing the decided objectives. When and what you track will vary depending on the goal, but there should be concrete data to measure so you can evaluate how your business is progressing. 

To ensure your company stays on course, consider using tools for setting and tracking goals. These apps and software solutions can monitor complex data points across multiple employees or departments and present them visually in a simple, easy-to-understand way. 

Adapt when necessary.  

As you monitor how your business is advancing, you might uncover problem areas that are making it difficult to achieve what you set out to accomplish. Be flexible, and reallocate resources or involve additional people when necessary. Don’t be afraid to adjust your goals, either. If you see that a projected target isn’t feasible, set a new one that your company is capable of reaching. Conversely, if you end up reaching a goal much faster and more easily than expected, consider setting a next level for that goal to capitalize on the accomplishment. 

Sometimes you might even find that the entire goal needs to be changed as your business pivots from one path to another. Although this can be disappointing or frustrating, all your previous effort wasn’t wasted. Even discarded goals are an opportunity to learn, grow and course correct. 

Celebrate every win. 

To get buy-in from your team, create a strong, goal-oriented company culture. But setting goals is only half the battle; you need to celebrate your wins, too, and not just the big ones. Make the effort to recognize every success, no matter how small. Reward individual employees’ efforts as well. Showing your staff you value their hard work will keep them motivated and engaged. 

What are the different types of business goals?

Four types of goals are beneficial in the business world. Read on to learn more about each one.

Activity-based goals

Activity-based goals require someone to perform specific tasks or activities. For example, you might set a goal to make 20 client phone calls each week.

Process-based goals

Process-based goals involve a focus on internal processes, strategies and behaviors. “Some examples would be resetting business policies for better efficiency or developing a new training program for staff to help their communication with customers,” Moulder said. 

Outcome-based goals

Outcome-based goals are centered on the results of your efforts. You may have less control over whether you achieve these objectives if they’re based on consumer or client behavior. 

“An example of this would be to get 10 referrals from existing customers,” said James Pollard, founder of The Advisor Coach. “You can’t directly control whether or not they give you any referrals, but you can influence the process by asking.”

Some goals are a hybrid of process and outcome goals. For instance, Moulder explained that a service-based business might set a goal to implement a new staff training program to improve customer service. The process portion of the goal is implementing the training program. The desired outcome is improving customer service, which you could gauge by measuring whether there is a reduction in service cancellations or an increase in repeat business from returning customers after the training is executed. 

Personal goals

Personal goals are those that business owners set for themselves. These may be related to maintaining or improving your health, increasing work-life balance or engaging in professional development. Knowing what you want for yourself is as essential as understanding what you want for your business because your personal goals affect how you run your company. Employees can also have personal developmental goals that help them progress in their careers.

Why is setting goals in business important?

We set small goals in our everyday lives, such as making it home in time for dinner or eating a salad for lunch instead of a hamburger. It’s just as important to set goals in your business. Goal setting is crucial because it gives you and your company direction. With the right goals, your organization may be optimized to perform at its best.

Without carefully set goals, however, it’s hard to keep your business moving in the right direction and difficult to measure success. This makes it challenging to recognize what aspects of your company are doing well and where growth is needed. Shared objectives centered around your mission statement also keep you and your team aligned. When everyone knows the organization’s purpose and how their roles contribute to your vision, it improves morale and increases productivity.

Tom Anziano and Julie Thompson contributed to this article. Source interviews were conducted for a previous version of this article.