Setting Small Business Goals
By VICKY BROWN
We all keep hearing that we should set goals for our business. And for many years, I thought that just meant setting sales targets – after all, the money is the most important thing, right?
But eventually I realized that business growth is about all the things you need to do to support getting more revenue – because without that, sales will dry up.
First, take a look at the departments of your company. Now, I know you’re probably saying – Vicky, it’s just me, I’m a solopreneur – I don’t have departments. Well, yes you do – sure they’re all headed by you, but every viable business has departments.
There’s sales & marketing, accounting & finance, product development, customer service, facilities and technology, and if you have other people helping you (independent contractors or employees) you’ll have human resources as well. Now there may be other areas particular to your business – but these departments are common across most businesses.
Now that we’ve identified the various departments, you’re going to set specific goals or targets for each of them. Most people start with revenue targets – so they focus on sales & marketing first. But I think that even before you get to figuring out how much money you’re going to need, you should take a moment to think about where you want the business to go.
For instance, if you’re a digital education business, is your goal to stop launching single courses every quarter and transition to a subscription model – or maybe you want to launch a signature program.
If you’re a marketing firm, maybe you want to figure out how to transition from a one to one model to a one to many model – so instead of doing the marketing for your clients, you’re teaching your clients how to do the marketing themselves.
Or maybe you want your accounting business to develop a low pricepoint, bare bones service level for smaller companies – where you provide the tools and they can do most of the work themselves.
It’s always best to start out with where you want to go, then you can start to put the pieces together around how you’re going to get there.
Let’s take the accounting business as an example. If they’re going to develop a low pricepoint, do-it-yourself service for smaller companies they’re probably going to need to invest in some technology platform or platforms that make it easy for the customer to access the tools they need. And they’ll need to focus on creating that service. So that naturally leads to some significant goals for both the facilities and tech department as well as the product development department.
And, of course, they’ll need to pay for it – so that will impact the accounting and finance department goals. And another thing to think about – they may not have any idea how much it would cost to say, get a customer self service platform up and running. That means, they’ll have to do a bit of research so they have an idea of what range they’re talking about, so they can set the target.
That just shows that doing goal setting, accurate, meaningful goal setting can’t just happen on a whim. And to do it well, it doesn’t happen in one setting. I used to take an afternoon – sit down – dream of what I wanted for the company the next year – and dive right in creating goals, targets and budgets. Well, let me tell you – that’s no way to plan – at least not successfully plan. It’s going to take a bit of research, then thinking, and revising, and maybe even – shock of all shocks – talking to someone else…like maybe your team. For goals to really be impactful, sure they need to be smart goals (specific, measurable, achievable, realistic and time bound), but at the beginning of the process, I think you really need to focus on the realistic part. And don’t forget to take a good long look at where you’ve been, what was the current year like – after all, you should be building on past performance, not re-inventing the wheel every year.
Oh, and by the way – it’s perfectly alright if, when you start thinking about where you want the company to go, that you ultimately come up with a roadmap that is multi year. Maybe it’s a 3 year journey – that’s completely fine. That simply means you’re being honest about what can reasonably be accomplished in the coming year, and you have a leg up on goal setting for next year – because the vision arc is already in place.
“…business growth is about all the things you need to do to support getting more revenue – because without that, sales will dry up.”
Alright, once you have the company vision in place for 2022, now you put the building blocks behind it. And again – don’t go right to the money targets, start with the blocks. What do you need each department to accomplish, so that the company makes its overall goal. Will you need to laser focus on product development, or maybe it’s going to be all about customer service in the new year.
Which reminds me – you know company goals don’t have to be, nor should they be, all about financial and market growth. Your time may best be spent up leveling a process, or overcoming a challenge. For instance, we like to use Net Promoter Scores to get a read on how our clients see us.
If you haven’t heard of the Net Promoter Score, it’s a single survey question that asks people to rate the likelihood they’ll recommend a company, product or service to a friend or colleague. I’m sure you’ve definitely seen an NPS in action – in fact, I’ll bet you’ve probably been asked to complete one at one time or another.
Well, when we look at our NPS, one of the things we focus on is where can we improve. What do we need to do to move the needle, and improve our NPS for the next year. So our annual company goals always include taking action to improve our net promoter score – because really, client satisfaction is everything. Sure you can drum up more sales and bring in more clients, but if you don’t keep them – well, that’s the whole ballgame.
Now of course, you don’t have to go the Net Promoter Score route – maybe you send a short survey to your clients, or maybe you measure client satisfaction by the actual number of client referrals you get, or something else. But either way, you should be keeping your eye on how your clients feel about the service they are getting from your business.
So think about three main overall company goals – the company vision for the year, a revenue goal and a client satisfaction goal. Everything else will spring from this foundation. The company goals will inform goals for each department.
For instance, if you’re really concerned with your customer satisfaction, or lack thereof, then that will help define your customer service goals. But it doesn’t stop there – because why are customers dissatisfied, is it service, or is it cost? Because that may have an impact on the product development department (how do you improve the client experience), the accounting and finance department (what is the cost of improving the client experience), and sales and marketing (you may have to increase the sales targets to bring in more people to support customer service or new technology.
You see, goal setting should have a waterfall effect – nothing really stands on its own. So company goals inform what the different departments have to accomplish during the year, and department goals trickle down to the individual – and no, it doesn’t matter if the individual is you or one of your employees. Once the goals are set for each department or area of the business, then you break them down into tasks, and that ultimately becomes the foundation of the monthly, weekly and daily task lists for each person
This process is the best way I’ve found to not only make sure the individual is achieving during the year, but to make sure those achievements really have an impact on moving the company forward, closer to the company vision
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Now, a couple of pro tips. Don’t load either the company or the individual down with too many goals. Try to stick with 3 company goals (aligned with vision, revenue and client satisfaction); and no more than 6 goals at the individual level – maybe 3 related to department goals, and 3 related to personal skills or performance improvement.
That might look something like this: 3 goals focused on department objectives – and you’ll see they also have milestone accomplishments – those just break the goals down into bite sized items.
And 3 personal objectives – in this example they’re focused on getting additional knowledge and doing some client development work.
Next – remember this should be a living process. You should take a look at everything each quarter – both to find out how you are doing against the goals, and to determine if anything needs adjusting. After all, goals that were set at the beginning of 2020, most definitely had to be adjusted during the year.
And yes, I do say go fully through the adjustment process – because skipping it, and just saying to yourself – well, the whole planet has changed, so my goals are out the window – leaves you open to working hard, and not accomplishing much of anything. There are plenty of businesses that thrived in 2020 – and one reason they did is because they kept their key on what they wanted to accomplish, and put a plan in place.
Also, don’t skimp on the process just because you’re doing all the work yourself. You’ll find that having a task list that is directly related to company goals will just allow you to move and grow the company faster. And it helps protect you from that ‘what should I do today’ feeling. Because this way, you’ll know what are the most important tasks for you to accomplish, and most importantly – why.
So your days of just having an endless list of to do items rattling around in your head, all of them with an urgent exclamation mark in front of them, will be over.
I recently heard a really great statement – I’m paraphrasing here – when you don’t take the time to prioritize what you have to do, your mind will think everything holds the same weight and urgency – it just hears a ringing phone.
So, my advice, block out some time (maybe in a few sessions) to really think about, research, and organize your company goals. Then figure out how they’ll trickle down ultimately into daily tasks. It will absolutely change your day to day experience in the new year.