How to set up effective goals to help grow your business

“The establishment of objectives and the development of their respective action plans are the most critical steps in a company’s management process,” wrote George T. Doran in his 1981 Management Review article which outlined the popular S.M.A.R.T goal setting acronym for the first time.

Goals play a key role in the success of a business. They help you formulate the mission of your business, inform your decision making and keep you on track to achieving the growth and targets that you aim for.

Goals also help to keep you and your employees motivated and productive. If everyone understands the vision of your entrepreneurial venture, you are more likely to successfully fulfil your business ambitions.

Types of business goals

The main types of goals are related to a business’ financial, operational and growth objectives.

Financial goals are those covering revenue, profit and cashflow. Your targets could include increasing profit margins and driving up sales. 

Operational goals are process related such as improving efficiency, boosting customer satisfaction and enhancing sustainability.

Growth goals are all about expanding a business. This could be increasing your market share, launching new products or improving brand awareness.

Work out your goals

The first step in setting business goals is working out exactly what you need to focus on to achieve growth.

You can do this by carrying out a SWOT analysis.

S.W.O.T. stands for:

• Strengths
• Weaknesses
• Opportunities
• Threats

List elements of your business in all four categories to work out what you’re good at, what you’re lacking in, what opportunities you have and how your business growth could be challenged.

Clarifying this information will help you to work the goals you should be setting for your business.

You can download a SWOT analysis template here.

Be SMART

Once you’ve conducted a SWOT analysis, you then need to set your goals.

There are various ways to do it but a very popular method is using the S.M.A.R.T. acronym which, as outlined above, was first coined by George T Doran in his 1981 article, ‘They're a SMART way to write management’s goals and objectives’.

S.M.A.R.T. stands for:

• Specific
• Measurable
• Achievable
• Realistic
• Time-related

Specific

Goals should be as specific as possible. Avoid broad or vague statements and focus on narrow objectives linked to a defined area of your business such as finances, sales and marketing. For example, rather than say you just want to achieve more sales by doing more marketing, decide by what percentage you want to improve the sales and using which particular marketing method. 

When thinking about specific goals, work out what you’re trying to accomplish, why you want to do it and who is going to be involved in achieving it. 

You might want to set specific goals related to factors such as improving sales revenue, increasing the number of clients, enhancing customer satisfaction levels and boosting profitability.

Measurable

Your goals need to be measurable so include metrics that allow you to track your progress in what you are trying to achieve.

Achievable

While it’s good to have big ambitions, you need to make sure you can actually achieve the goals that you set. Consider whether you can realistically meet the objectives. If you’re too ambitious, you’ll likely be frustrated and unmotivated.

To reach your long-term goals, you can set several short-term ones to get there. Achieving wins along the way will help you and your employees to stay motivated and productive.

Relevant

Goals need to tie in with your overall business plan and long-term objectives. Everything and everyone should be working towards the same vision.

Time-related

Each goal should cover a specific time with deadlines set for the objective to be achieved by a particular date.

Collaborate with others

If you have employees, involve them in the goal-setting process.

Giving staff a say will help them to stay motivated and know that they play a key role in your business achieving its aims.

They may also bring ideas and insights from their area of the business that you haven’t thought about. For example, customer service staff could have useful insights from conversations with customers, and marketing employees may have insights from how your advertising activities perform.

Run meetings and workshops to discuss your potential goals. Highlight the results from your SWOT analysis and remind staff of your overall business plan.

Discuss your long-term business objectives and come together to brainstorm specific goals that will help you to achieve them. 

If you have remote staff, be sure to involve them too by running online video meetings and using digital communication tools such as Teams and Slack.

You may also want to involve other stakeholders in setting goals such as key partners, suppliers and investors.

Track and measure progress

Once you’ve settled on your business goals, you need to set up processes to ensure you remain on track.

Create key performance indicators (KPIs) to measure your progress towards achieving your objectives. For more advice on financial KPIs, read our guide.

Hold regular meetings with everyone involved to discuss progress and what needs to be done if things aren’t going well. Adjust or tweak your goals if necessary.

Need help with setting and monitoring your business goals?

TaxAssist Accountants can help you with the right advice about financial and accounting goals to help grow your business.

Call 0121 354 5591 or complete our online enquiry form to arrange your free initial consultation. 

Date published 30 May 2023 | Last updated 20 Mar 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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