Entrepreneurs are often ambitious people. After all, it’s no easy task to start your own business. Only the tough and determined strike out on their own, especially during tough economic times, such as a recession.
Regardless of your business, there’s one thing you need: goals. Creating a business without having goals is like creating a building without a blueprint. How can you create a successful business if you don’t have an idea of what you’re working towards?
There are several different types of business goals. Here’s an overview of a few types of business goals you can create for your small business.
Financial goals can be among the most critical when it comes to ensuring your business not only survives but thrives.
Without a keen eye on the various costs it takes to operate your business, you could be spending money on the wrong things. You might also be overestimating how much profit your business is generating.
If your business doesn’t yet have a budget or a detailed tracking system for monthly expenditures, this should be your first financial priority.
If your business started as a one-person side hustle, you might not have strict controls on how you track your expenses and your profits. But, as you grow, even if you maintain your current business model, it’s critical to analyze your costs and your profits to ensure you don’t miss opportunities to make money.
Besides having a clear-cut way of tracking expenses, here are some other financial goals:
- Increase cash flow
- Decrease business expenses
- Increase profits
- Increase monthly sales
- Experiment with promotions to drive more sales
Think of the big businesses you know about. Within these large companies, there are several smaller departments. Although each department contributes to the company’s larger goal, each department has its focus. The sales team isn’t trying to figure out how to provide better customer service. The customer service team isn’t trying to figure out how to market a new product. Each team has its own goals. So, in this way, each team is its own operation.
A goal that is specific to an operation is called an operational goal. Creating operational goals can be especially important when you’re transitioning your business from solopreneur mode into a bigger business. When you’re used to doing everything by yourself – maybe your business started as a side hustle business of one – you’ll need to clearly define how your business will transition as you bring people on. Or, perhaps you’re in growth mode with your business – you’re a locally known company, but you’d like to become regionally known – and to achieve your goals, you need big, operational goals to make this happen.
Typically, operational goals only involve one department. So, if your goal involves more than one department, it probably isn’t an operational goal. Your customer service department might have the operational goal to track customer satisfaction and increase it. Your sales department might have an operational goal of increasing sales. But, these goals are unique to each department, and they are specific to each area of your business operations.
Strategic goals keep your vision in mind and create goals based on your vision of the future for the company. If it can be measured, it can be managed. Without a vision, people will perish.
Take these two principles and combine them, and you have the idea of creating strategic goals.
You can’t create strategic goals for your business if you haven’t already thought about your desired vision for the future. You also can’t create strategic goals if you haven’t given thought to how to measure success. How will you know when your business – or business unit – has become successful? What targets have you set? What does mediocrity or excellence look like?
Strategic goals are those that can be acted on. They require measurable actions.
As you create your business goals, it might seem intimidating to set a timeframe for action. However, studies have shown that writing down your goals makes it more likely for you to achieve them. While you might be afraid of setting a goal and failing, it’s important to put a timeframe for your goal. This will increase your chance of success.
Cultivating a growth mindset will help you increase your confidence in yourself in spite of any obstacles you’re facing.
The goals you create should always specify a time frame. These goals can be:
- Long-term: Long-term goals might be to increase employee retention, increase profit margins, or increase customer loyalty.
- Medium-term goals: These are goals you set after you’re able to celebrate being in business for your first year. Many new businesses simply don’t make it past this significant milestone. But, once you get to this point, you can begin to make goals that have a longer time horizon.
- Short-term: These are the goals for the earliest days of your business. As you are creating a product or establishing a business, you’re striving to find your niche, identify your target customer, and focus on a main product that you’ll be known for selling.
Quantitative vs. Qualitative Goals
The numbers don’t lie or quality over quantity. Which statement do you lean more towards?
Quantitative goals rely on numbers. Using math, numbers, or statistics, you can create a goal based on hard data that can’t be disputed. Qualitative goals are much different. They use not-so-easy-to-measure traits that still matter, but that doesn’t rely on numbers.
Outcome vs. Process-Oriented Goals
Another way to think about goals is to re-frame the purpose of a goal. Many people feel that the reason for creating a goal is to achieve a certain accomplishment. This is where an outcome-based goal comes into play. For example, in January, many people make a goal to lose weight but quickly find that obstacles face them in the new year. They create an outcome-based goal, but the reality of obstacles interferes with their success.
For this reason, process-oriented goals are often easier for many people to achieve. A process-oriented goal creates several milestones for success, and success is found in the process, not in the final destination. So, for the person striving for weight loss in a new year, this person would instead create mini-habits that are likely to cause them to lose weight. Their process-oriented goals might be to eat a salad three times a week or to enjoy flavored water instead of a regular soda. Each time the person achieves one of these mini-goals, they are succeeding in the process.
A similar process can be used in business. Small mini-goals can be created that are geared towards the outcome that is desired. However, missing a goal doesn’t mean failure. It simply means that the plan can continue, and success can eventually be found later on, by trying the process again.
Creating goals is a fundamental process of finding success in any business venture. There are various styles of goal setting, based on the desired outcome. Planning takes an idea, puts it into motion, and is the first step of turning dreams into reality.