The Importance of Setting SMART Goals for Your Small Business

As Lenny and I progressed through our careers and started leading larger and larger organizations, we gained a finer understanding of how to define success and measure progress.? In previous issues of this newsletter, we talked about thinking strategically, defining a mission, and deliberating planning in a manner that maximized the use of the resources available. That work can be challenging, but without it, you are flying blind.? In a game of limited resources, you have to be selective in what you choose to take on and effective in what you have chosen to do.?

SMART goals are a great way to structure this work.? SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound.? Setting goals in this manner do a few things for you and your business:?

• Provides direction and focus: Setting SMART goals provides direction and focus for your business. You know what you want to achieve on a large scale and how to get there in specific, measurable steps (SMART).?

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• Helps with decision-making: Having SMART goals in place helps you make informed decisions about how to allocate resources and prioritize tasks both in the short- and long-term.?

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• Motivates and empower employees: SMART goals help to motivate and empower employees to work towards a common objective, both in the present and with an eye towards the future. They understand what is expected of them and the impact of their work on the big picture.?

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• Facilitates tracking progress: SMART goals are measurable and time-bound, which means that you can track your progress towards achieving them, providing a framework for tracking progress towards your long-term goals.??

This work can be lengthy and difficult. It is best completed with your team.? Your leaders across your core business process are vital to getting the most out of this process. It requires good teamwork, open dialogue, and some patience. Take your time, but don’t get bogged down.? The outcome of this process is a SMART Goal that each portion of the team understands and has resource to. It also forms the basis for recurring assessment.?

• Compile an Agenda, Gather the Team, and Prep your Materials.? Like any good planning effort, having a clear agenda with identified deliverables is key.? Having all the right people around the table is a necessity (you’ll look everywhere for Kim and she will inevitably be unavailable).? Having the right planning material is a must (the moment you need the market research data from John, the data will be a mess).?
• Start with your “End”: As part of your strategy development, you left with a set of Ends in mind.? Review the End, re-establish understanding, and set your horizon.? One of your ends was: By the end of the Calendar year, XCorp will be the market leader in the widget X product space and recognize real growth of 20%.? Does this end still hold true?? How has the widget X product space changed since the last discussion? Is our growth target accurate?? Is there 20% growth in that market? Is 20% growth the right target based upon your PNL and financing costs?? The point is not to rehash old ground, but to ensure the End still holds.?
• Break the End down into SMART goals: Identify the specific, measurable steps you need to take to achieve this End. Make sure each goal is Specific, Measurable, Achievable, Relevant, and Time-bound. For Example: By the end of the first quarter (Time Bound), XCorp will have identified and developed 10 new leads in the tri-county area (Specific) and convert 5 (Measurable) of them to product contract (Achievable) contributing to 2% real growth (Relevant).?

Lenny and I have sat in countless planning sessions participating in this very process as key members of the larger team.? We have similarly led our large and disparate organizations through this very same “drill.”? It’s tough work and time consuming.? But it’s so worth it.? You don’t have endless resources at your disposal.? The reality of your business plan requires that you get the most out of every hour and every dollar.? If you are wasting either one, you need to be able to “fish or cut bait” as we say and go a different direction.???

At LLS, we have the right tools, the right processes, and the right people to help you work through these types of discussions.? Wherever you are in your business journey, we can help.? Our SMART series products can get you started with these foundational topics.? Reach out if you’d like to learn more.?