Importance of Setting Goals & Objectives

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In terms of setting goals in your organization, if you know where you want your organization to go, you’ll be in a strong position to know whether or not you’ve arrived at that goal. Goal setting is an important tool not only for clarifying direction but also for assessing organizational progress. Set clear goals and be realistic, as those enable you to be more effective toward guiding your performance and evaluating your results.

As business owner, it’s important that you take the time to set goals and review your business as a whole.

Having clear, well-defined goals can:

  • help your business grow
  • achieve your objectives
  • improve teamwork and collaboration
  • help everyone understand the direction your business is heading in.

Before you start

Before you even begin to write down your goals, you need to know what areas your business needs to improve in, or could improve in. Although you may already have an idea of the key areas, it’s important to regularly step back and review your business.

Here are some help tools and strategies you can use to help you assess your business:

  • SWOT analysis – identify your business’s strengths, weaknesses, opportunities and threats.
  • Bench-marking – research similar businesses in your industry or location and compare industry averages on income, and expenses. This can help you assess how your business is performing.
  • Market research – do your homework and research the market and industry of your business to identify customer needs, trends and changes in the market or technology.

Setting goals

Useful goals should be challenging and achievable. Setting a sales target that you’ll almost certainly reach may make you and your coworkers feel good about yourselves, but it won’t spur you to work harder and achieve your potential. Setting a sales target that is nearly impossible to reach won’t make your staff work harder, because they’ll know the outcome will inevitably fall short. To be truly useful, goals should also be clear and — whenever possible — quantifiable. It is more effective to say that you want your company to expand into two new markets during the next two years than to say that you want it to grow considerably. The former provides clear criteria that drive you to achieve, and indicators that tell you when you’ve succeeded. The latter is so vague that you won’t really know what you’re working toward or whether or not you’ve achieved it.

Setting SMART (specific, measurable, achievable, relevant and timely) goals can help you evaluate the goals you wish to set. Think about whether they are realistic. You should write down your goals in your business plan to help keep you on track to achieve them.

Here are a few things to consider when setting your goals:

  • Specific – be clear about what you want to achieve
  • Measurable – make sure the goal can be measured, and you can recognize if you’ve achieved your goal
  • Achievable – check that your goal is something you have the time, money and resources to meet
  • Relevant – ensure your goal is relevant to the direction you want your business to head in, for example, increasing profit, employing more staff, increasing brand awareness
  • Timely – set a realistic deadline for completing the goal.

Example of a SMART goal

Overall goal: I want to grow my gardening business.

Specific: I will gain four new clients for my business.

Measurable: I will measure my progress by keeping track of how many new clients I gain while maintaining my current client base.

Achievable: I will gain four new clients as I currently have four available spaces in my fortnightly client scheduling diary.

Relevant: Adding clients to my customer base will allow me to grow my business and increase my income.

Timely: I will have four new clients within three months.

SMART Goal: I will gain four new clients for my gardening business within a three month period filling my current available diary places. This will allow me to grow my business and increase my revenue.

Achieving your goals

Once you’ve got your list of business goals, you’ll need to figure out how to achieve them. Be realistic in what you can achieve. It might be helpful to break down the steps into smaller chunks.

Here’s a list of things to consider when planning your strategy to achieve your business goals:

  • time frame – how long do you expect a task will take to complete (include both a start and finish date)
  • actions – describe the actions you are going to take in detail (e.g. research five different ice-cream suppliers in Hobart and make a list of their pros and cons)
  • responsibilities – write down the person or people responsible for achieving each step
  • resources – detail your budget, staffing requirements and any supplies you’ll need
  • the desired outcome – describe what you expect from your actions and how you’ll know when the goal has been achieved.

To make your goal-setting meaningful and important, the members of your staff must have a clear idea of what they’re working toward, and they must have the tools and resources to achieve the goals you’ve created. Communicate your goals clearly in meetings and in memos. Be available to answer questions, give feedback and offer support. Celebrate successes and reflect when your efforts fall short. Coordinate efforts among team members to work in a shared direction with the objective of achieving the goals you’ve set. Create a series of goals to be achieved over time, such as opening one store a year for five years. Align short-term goals, such as improving quarterly cash flow with longer term goals, such as opening new stores.

Shifting Gears

In some ways, the process of setting and working toward goals is even more important than whether or not you actually achieve them. Circumstances unfold over time, such as changes in market conditions or unforeseen opportunities that make previously set goals obsolete. Failure to reach a goal doesn’t necessarily mean that your work has been unsuccessful. If your goals turn out to be unrealistic, take a step back and set new goals that will guide your plans and processes in a more relevant direction.

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