If you’re an entrepreneur or business owner you should be setting goals for yourself. There’s a lot of psychology around it, and setting goals has been shown to make it 42% more likely that you’ll actually achieve them. It also helps you keep focused, and keep yourself accountable and motivated. Today, we’re going to look at how to set SMART goals, and how this method of goal setting can help you achieve more in your businesses.
What are SMART goals?
Smart is an acronym that breaks down steps to set a good goal. They are:
S: Specific – Goals should have specific and have a clear cause and effect relationship to your business. You should try and make them as focused as possible as this makes it easier to act on them. Try to answer the 5’s (who, what, why, where, which) when writing goals to make them specific.
M: Measurable – A goal should also have been measurable and have a concrete pass/fail criteria. “I want to grow my business” doesn’t satisfy this while “I want to grow my business by 5%” does as you can clearly tell when you succeed.
A: Achievable – A good goal is also one that you can actually achieve. This one is a bit subjective and requires you to take into account what you believe you’re capable of. My process is to try and make a goal push me, while also being something I believe I can hit. I don't want goals to be too easy, but you also want to avoid making them too hard.
R: Relevant – Good goals are also relevant to your business. There’s a lot of stuff you can be working on that really doesn’t benefit your business, so make sure your goals are.
T: Timebound – Lastly, good goals have a time limit for completion. There has to be a clear frame to measure against, and a clear point at which you’ve either failed or succeeded.
Each of these contributes to setting a good goal and makes them more actionable. That really is the key, making your goals actionable. Too many people set nebulous goals, and in many cases, that’s as bad as not setting one at all.
Setting Smart Goals
I think the best way to learn how to set SMART goals is to take a look at an example of a bad goal and rewrite it according to the rules above.
Let’s say we have the goal:
“I would like to make more money”
It’s certainly a good goal to have, but it’s not really actionable. How much more money? When should I have that money? How do I know if I’ve completed the goal? These are the types of questions a bad goal brings up, and it’s really hard to use this as motivation to work towards.
Now, let’s walk through each of the SMART steps above to create a good, actionable goal.
Specific: We want our goal to be something that has hard numbers against it. Using the goal above, we can reword it to
“I would like to make more money through my business and grow its revenue.”
Now we know exactly when we reach our goal. We know that not only are we looking to make more money, but specifically we’re looking to do so through our business revenue. If we wanted, we could further make that more specific and go more in-depth in how we plan to generate that extra revenue.
Measurable: Our goal still isn’t measurable. We know that we want to make more money, but how much more? Let’s modify it a bit more now to:
“I would like to make 5% more money through my business and grow its revenue.”
That’s already looking a lot better. We now know exactly how much revenue we need to grow by, and can clearly tell when we complete our goal.
Timebound: I’ve taken a bit of a liberty here and moved this piece up as I personally think it feels better here. You’ll see why in a second.
If we look at our goal it has no clearly defined timeline. We know when we’ve achieved our goal, but for all we know we could take the next 5 years to do that. Let’s fix it.
“I would like to make 5% more money through my business and grow its revenue within the next year.”
Now we not only know what we want to achieve, but we also have a clear timeline for doing so.
Achievable: Next we want to make sure that our goal is achievable. I moved the timebound section above this as it’s hard to know what’s achievable without having your timeline defined. What you can do in 1 year is way different than if you gave yourself 5.
This part of the process is a bit subjective, you need to be honest with yourself. Is our goal of 5% growth in a year achievable? Only you can really answer that.
This is a good place to look back on the past if possible. If last year you only grew by 1% then maybe 5% might be a bit ambitious. You need to take an honest assessment of what you can do.
On the reverse side, you also don’t want to make a rule that is too achievable and you blow right past it. My rule of thumb is that hitting your goal should cause a little discomfort but not too much. It should be difficult but doable with a little hard work
Relevant: Lastly, we want to make sure that our goal is relevant to growing our business. In this case, our goal is simply a direct revenue goal so it’s likely to be extremely relevant.
Not all goals are relevant though. I see a lot of times people will set goals that are technically part of the business but aren’t really all that relevant to its growth. Maybe a business owner has set a goal to grow their Instagram followers without really understanding the benefit it will have for their business. If they’ve never made a sale off social media, maybe spending more time actively growing it isn’t the best use of time.
That’s not to say these auxiliary tasks aren’t important, but you have to be very picky about how you spend your time. My general thought is if you’re not 100% sure of the relevancy of something turn it into a shorter-term goal and evaluate often. There’s no use spending the next year growing your social media following only to discover it leads to no sales.
When To Set Goals
Lastly, I wanted to briefly touch on setting goals and when to do so. I personally like having lots of little goals to work towards, and then a few big ones. Generally, I set yearly goals, then break these down into monthly milestones.
This helps make things more manageable to work towards, but also provides quicker feedback on my overall status. If I’m 6 months into a yearly goal but only 25% of the way there that might be a sign something is wrong.
On that note, it’s also okay not to achieve 100% of your goals. Setting goals is a learning experience, and not every goal is going to be achievable. Sometimes life gets in the way, priorities change, or you simply just made it too ambitious. That’s okay, it happens to the best of us. Make sure you evaluate and learn what went wrong, and then endeavor to do better in the future. That’s all we can do.
Hopefully, this will help you in the future when setting goals for your business. I do truly believe setting goals is important, even if you don’t make them match SMART 100% having a set of goals to work towards is extremely motivating and helps me stay focused.
If you’re interested in learning more about setting goals and time management check out my book “It’s Your Time” available on kindle and paperback on Amazon.
