How to Set Goals for a Business

Setting goals gives you a target to aim for.

You don't jump in the car and drive cross-country without a map. You don't build a house without blueprints. To run a business, you have to know where you want to go with it. Establishing goals is the easiest way to decide how to move forward and stay on the right path to reach the aspirations you have for the company. Setting goals can be educational as you consider what it is you really want out of the business and your life.

Difficulty:

Moderately Challenging

Instructions

1. Set goals along a time line into the future. Determine where you want to be in five, 10 or 20 years. Even set goals for how your children will run the business or how you will sell it when it reaches a certain value. Typically, setting goals that are three to five years out gives you time to implement strategies to get you to your goal. You may decide that in three years, you will increase your customer base by 20 percent. You now have a goal you can work to achieve.

2. Create steps toward the goal. Your long-term goal may seem really good, but it probably doesn't tell you how to get there. For example, you may have a five-year goal to open two more stores. Create actionable steps you can perform to accomplish the goal. To open the two new stores, you may need to double your current profits. To double your current profits, you may need to increase customer traffic by 100 more customers a week. To bring in 100 new customers a week, you may need a new product or something different to attract the customers. You can understand that the primary goals are fed by steps along the way. If you set a goal for three years in the future and do nothing toward making the goal happen, it will likely fail. However, if every day, you and your employees consider where the company intends to be in the three years, everyone works toward the goal. Each small step that you create to reach the larger goal is usually a goal itself. For example, the step may be to increase sales by 10 percent each month for the next year so you have the money to open the new stores.

3. Track your progress. If you carefully track how you are reaching your long-term goal, you will stay on the right path. For example, if you intended to increase sales by 10 percent every month for the next year, you will carefully monitor sales each month. You may find that you are understanding your business better. You may realize that for three weeks out of the month, you were on target for the 10 percent increase. One week of the month, sales slowed. Determine why and create steps to address the problem. Maybe a winter storm came through the area and sales dropped. Brainstorm the next step. You may decide to have a theme sale such as a "thaw-out sale." Or you may decide to have sidewalk sales the next month when the weather improves. The key is that you use your skill at running your business, but you keep the goal ever-present as you make decisions.

Tips & Warnings

• Plan time often to review both your short- and long-term goals.

References

• "Inc. Magazine": How to Set Business Goals
• Prevential: How to Set and Achieve Business Goals