“There are always new frontiers in business”
Importance of Setting Business Goals
There are always new frontiers in business to take on and because of that your goals are always changing and evolving with your business progress. Each month, quarter or year presents a new set of challenges. The key to business growth is consistently setting new goals throughout each year and there are several reasons that this is important.
1. Informs the path that your business will take in the future.
Setting business goals provides the map that you will need for laying out the specific next steps that you need to take. You cannot know how you are moving forward in business until you know exactly where it is that you intend to go. Setting business goals are the only way for you to know which milestone it is that you are working to reach. That knowledge is what will propel your planning strategies and production methods moving forward.
For example, you cannot revamp your sales strategies without first analyzing what mark you need to hit by the end of that sales cycle. If you know what goal you need to reach then you can proceed to assessing whether or not you have adequate staff to reach that goal, if the team that you have has the resources necessary to reach that goal, and even assess whether or not your team will need additional incentives in order to reach that goal. It all starts with determining where the finish line is, and then the race can begin in full force!
2. Creates a more seamless communication channel between employers and employees
In so many businesses, leadership makes the mistake of not communicating the goals of the company to team members in the appropriate time. This can create an unfortunate sense of confusion and frustration for those who are unaware of the direction that the higher levels of management are trying to go. In order for all employees to feel that they are adequately contributing to the goals of the business, they need to know that they are all in lockstep with where management needs them to be.
A good illustration of how this can be detrimental to your business is when looking at goals for sales. Everyone may be aware of the hard number that they need to reach, but they may not be aware of the specific products that need to increase in sales. If they are not aware of the details of what management is expecting, then they will feel frustrated when management is unhappy with their numbers. They need to know that the overall dollar amount may be reached, but if they do not reach the proper number of units for each product then they are still falling short.
3. Keeps the mission statement and foundation of the company focused and in perspective
As your business grows and evolves, the short term goals are going to change pretty often. However, when you began your business then you likely started with a mission statement and a singular focus, as most companies do. Throughout the evolutions and changes of your business, you have to maintain that singular focus and mission statement in your line of sight at all times. Otherwise, you will risk losing the identity of your brand and that is something that is difficult to get back. Setting goals is not just about placing the marker down for where you want to go, but it also requires referring back to the basics and ensuring that each goal is in line with that vision for the company.
One industry that struggles greatly in this area is specialized restaurants or stores. Even when the food is perfect and well loved, it is an extremely tough business to keep up in and when you want to grow and expand it can be hard to know how. Adding foods to what they offer is crucial to staying relevant and exciting to existing customers and also important for going after new demographics. However, if you expand the offerings in the wrong way or too much too soon then you also run the risk of confusing customers by attempting to change your entire identity in the industry.
4. Forces management to hold themselves accountable and be introspective
Goal setting is an exercise in pushing oneself and the company that they own to do bigger and better things. That means that they have to look within themselves first and ask the question of what they can be doing better and where could they be working harder before asking the same of their teams. If a manager or owner wants to see the best come out of their people, then they have to know that they are not only working above their employees, but also alongside them.
In order for those goals to be realistic, they also need to think about whether or not their employees are capable of reaching the same marks as they have. For example, if a manager knows that he or she works fifteen hours a day, then it is not realistic to set a goal for employees that would require that many hours of each of them.
5. Maintains and increases future growth for the company
Of course, every business owner wants to see growth year over year but not everyone knows how to get there. Having a great product or service to offer is the first step, doing the leg work on researching demographics and how to accomplish outreach is the next. You have to hire employees where necessary, but if you do not set goals for the organization then you are falling forward aimlessly.
In order to know exactly what you are trying to achieve each quarter, then you need to know the goal for the year. Then you need to analyze how the seasons of each quarter impact your business differently and set shorter-term goals with those intricacies in mind. That is the most effective way to ensure that the growth in your company is ongoing rather than being cyclical or spontaneous.
Goals in business can mean marketing, sales, productivity, employee retention, overhead or so many other things. If you do not set those goals then you cannot take the necessary steps between now and what the future could hold for you and your team. Take the extra time to set those milestones!