While some people talk a good game about setting goals, many fall short when it comes to execution, hampered by vague targets that lack structure and trackability.
The solution? It’s time to get SMART — as in specific, measurable, attainable, relevant and time-bound.
Here’s how to set SMART goals for your small business, including some examples.
What Are SMART Goals?
Setting SMART goals can help you set up verifiable trajectories toward specific objectives featuring well-defined, attainable milestones to ensure success.
The SMART process helps focus your efforts and eliminate distractions: You focus on what matters. It also helps promote transparency and accountability throughout your company so employees can be empowered to prioritize their efforts and resources toward accomplishing common goals.
The 5 Elements of a SMART Goal
Let’s break down the acronym:
Your goal should be well-defined and focus on a particular outcome. For example, instead of saying, “we want to increase sales,” it should state “we aim to increase sales by 80% in the XYZ market.”
A specific goal should be crafted in a precise manner, so all members of the team know what’s expected of them and what action they need to take. It should describe an observable action, behavior or result and use quantitative values (e.g., a number, amount, or percentage) to measure success.
Consider the following when you’re setting a specific goal:
- What do you want to accomplish? (For example: Increase sales by 50%.)
- Who needs to be involved? (The sales team.)
- What are the resources required? (Spend $2,000 to purchase new customer-relationship-management software.)
- How can you make this goal a reality? (Implement an inbound marketing strategy.)
- Why is the goal important? (To scale up to enter new markets.)
Each SMART goal should have a starting point and a finishing point that can be quantified and tracked. Besides the key metrics, you should indicate a system, method and procedure that will be used to measure progress.
To quantify success, you need to have a benchmark and take baseline measurements of the starting point:
- What’s the starting metrics? (For example: $1 million in sales last year.)
- What’s the finishing point that indicates the goal has been achieved? ($1.5 in sales this year.)
- What efforts are required to achieve the desired outcome? (Implement a lead-nurturing strategy.)
- How can progress be tracked? (Set monthly and quarterly sales goals.)
This criterion prompts you to take stock of timeline, budget and resource availability (e.g., talent) so you can evaluate if a goal can be realistically achieved.
For instance, many venture capitalists or angel investors would disregard a company’s plan if the goals are outlandish or lacking a practical approach. To set an attainable goal, do some research and check with your industry association to get a gauge on what realistic growth looks like in your field.
A Note About the ‘A’
The “A” in SMART goal also can stand for “acceptable.” It refers to getting buy-in from everyone involved, so you can rally employees behind a common objective and motivate them to take the initiative.
A goal needs to be relevant to your business. Otherwise, it might turn into a lot of busywork with few meaningful results. For example, short-term goals need to be in alignment with the overarching vision for your business.
Your goal also should address market conditions and the realities of the business climate. For instance, a goal may not be relevant if you’re trying to increase your sales by 50% in an economic downturn.
A realistic goal takes into account the practical situation of your company so everyone involved can relate to the objective. If it isn’t relevant to those that need to work on it, then they won’t be motivated to generate results.
Tying a timeline to the goal-setting process helps ensure things get done. Your goal should have a clear start date and end date representing a duration that matches the scope and resources available. Setting a time-bound goal is especially crucial for short-term objectives because it helps you strategically allocate time and resources to high-priority projects.
Keep in Mind
Faster isn’t always the better. An extremely tight deadline can prove demotivating for employees and might discourage them from taking action.
SMART Goals: Examples of What Works
Consider applying SMART goals to several aspects of running your small business, including leadership, management and employee performance. Here are some examples of setting meaningful SMART goals that’ll help you achieve tangible results:
SMART Goals Examples for Employees
There are two types of SMART goals for employees:
- Performance goals. These are related to an employee’s job responsibilities and deliverables. For example: Improve the quality of customer service to achieve a 90% customer satisfaction rating on accuracy, timeliness and courtesy measures in 6 months.
- Development goals. These are used to improve employees’ performance in their current roles and support their career advancement. For example: Gain industry knowledge by attending three trade events every quarter and deliver an internal presentation to the team on key takeaways afterward.
SMART Goals Examples for Leadership
Objectives for developing leadership capabilities include honing communication skills, the ability to inspire and motivate others, assessing situations and making decisions, critical thinking and problem-solving skills and the ability to work with a team.
- Motivate and enable team members to increase productivity by 25%. This can be achieved by streamlining processes and workflows through the implementation of collaboration and project management tools by [XX date].
- Develop presentation skills and improve the clarity of my communication to reduce the number of questions in team meetings by 30% in 6 months. This will reduce the time spent on answering questions and minimize misunderstandings to improve the team’s productivity.
SMART Goals Examples for Managers
Managers need to set SMART goals that not only aim to improve their performance but the performance of team members. For example:
- Increase blog traffic by 200% using search-engine-optimization and email marketing strategies. The web team will monitor blog stats and provide a weekly report to help fine-tune the tactics. Work will begin on [XX date] and the goal is expected to be achieved by [XX date].
- Develop management and coaching skills by having weekly one-on-one meetings with direct reports and quarterly one-on-one meetings with indirect reports to achieve a 10% improvement in employee engagement in 6 months.
SMART Goals Examples for Performance
These goals can guide employee performance reviews to help workers focus on improving areas most relevant to their professional development and the organization’s business objectives. Some of these goals focus on meeting specific performance metrics, while others revolve around acquiring professional knowledge and updating relevant skills.
- Take an online course on social media marketing and apply the tactics to Facebook and Instagram to increase reach and engagement by 25% in 6 months.
- Spend 2 days each month shadowing operation and sales teams to gain customer insights, which will be applied to the procurement process to improve cost efficiency by 10% in 6 months.
SMART Goals Examples for Small Business
Small businesses operate differently than large corporations and require setting SMART goals with a level of granularity that allows you to stay focused on results without losing sight of the big picture.
- Gain 4 new clients this quarter, each with a monthly retainer fee of $2,000. This will be achieved by repackaging my services, increasing my fees, improving my lead generation efforts so I can have 3 or more sales conversations each week and build a pipeline of high-quality prospects.
- Acquire 10,000 new online customers using pay-per-click ads at an average cost-per-acquisition of $25 with an average profitability of $10 by the end of the year.
- Secure $10,000 in sponsorship funding for an upcoming event within 2 months.
Long- and Short-Term SMART Goals
While it’s essential to have a long-term vision to guide the growth of your business, you also need short-term milestones to help you stay on track. You can set SMART goals for both:
Examples of Long-Term SMART Goals
- Expand to 10 regional markets and reach $10 million in sales in 5 years.
- Become the industry leader by launching 5 innovative products that will reach $1 million in sales each within 3 years.
Examples of Short-Term SMART Goals
- Implement business work-flow automation to increase productivity by 25% in 3 months while improving the company’s scalability for expansion.
- Hire 2 new designers/engineers to focus on new product development and have the prototype ready by [XX date].
Why It’s Smart to Set SMART Goals
SMART goal-setting is an effective way to help refine your ideas, clarify your objectives, focus your efforts and allocate your resources productively.
Also, having a common goal can transform how you and your team work together and create a collaborative environment that’s essential for small businesses to thrive in today’s competitive market.