Small business goals are specific objectives aimed at helping small businesses succeed. If you own or manage a small business, setting clear goals can help grow your business, overcome challenges, improve efficiency, and more. Small business goals may vary from one company to another, as each business and business owner is unique.
What are Business Goals?
Business goals are important objectives to help businesses achieve success both short-term and long-term. Without business goals, a business owner or manager may struggle to make a profit. By setting clear and reasonable goals, you may find yourself in a better position to sustain your business for years to come.
Short-term Business Goals
In the business world, short-term business goals usually mean a time frame of less than a year. For example, in accounting and finance, the year is often used as a standard for classifying assets and liabilities on a balance sheet and determining certain tax rates.
Some companies may focus their goals on shorter periods than a year, such as quarterly, monthly, or even weekly or daily.
Here are some examples of short-term business goals to inspire you in creating your own goals:
- Increase average daily sales by 50 over the next 90 days.
- Raise revenue by $20,000 per month after one year.
- Reduce employee turnover rate by 10% within six months.
- Make five sales to repeat customers each week.
- Reduce production costs by 5% per unit over six months.
- Decrease average time to collect invoices by seven days after one year.
Again, every business is unique, so these goals may be suitable for your business or vary completely from what matters to you. It is essential to understand the significant challenges and opportunities, as well as the key performance indicators, for your business. You can focus your goals and efforts on the most relevant and effective business objectives for your company.
Long-term Business Goals
Long-term business goals are objectives that take five to ten years rather than just focusing on a time frame that exceeds one year. Even if you weren’t good at telling your high school guidance counselor or former manager where you see yourself in five or ten years, it’s time to apply this concept to your business.
Long-term business goals may also follow the SMART goal framework, but they may be more ambitious and require more effort to achieve. You can think of short-term business goals as stepping stones to reach those larger goals.
Here are examples of long-term small business goals for achieving lasting results:
- Doubled the number of physical locations in five years.
- Add 25 sales representatives over the next two years.
- Reach 100,000 customers within 10 years.
- Achieve $250,000 in annual revenue by 2025.
- Reach zero carbon emissions within 10 years.
- Produce products using only recycled materials by 2027.
Goals are an incredibly useful management tool. Setting long-term goals can motivate you and your team to work together towards success.
Note: If you tie rewards and compensation to achieving business goals, you know that your employees are motivated to reach the most important goal for the company.
Examples of How to Set Small Business Goals
To better understand how to set small business goals, let’s take an example. Suppose you purchased a new food truck and want to turn it into a successful business to support your family. Here are some goals that small business owners of this kind might consider to get on the right financial path:
- Find two regular weekly events and four regular monthly events to attend in three months.
- Achieve
- Average sales of $500 per hour during the first year.
- Establish a website and online catering order forms within 30 days.
- Hire two part-time employees within the next two weeks and four part-time employees by the end of the first year.
- Adjust the menu to achieve a minimum profit margin of 7% within six months.
- Reach annual sales of $100,000 by the end of the second year.
- Achieve annual profits of $60,000 by the end of the third year.
This plan provides a mix of short-term and long-term goals, which is excellent for building and maintaining momentum. If the goals are too difficult or if they are all long-term, it may be difficult, if not impossible, to achieve the objectives. By setting appropriate goals and tracking them regularly, you place yourself in the best position to achieve the best possible results.
Conclusion
Business goals are critical to the success of many business owners. Knowing where you want to take your business helps you and your team focus on the right areas and activities. By sharply focusing on goals and following a smart goal-setting system, there is no reason not to achieve the success you are striving for. By combining strategic goals with hard work and a little luck, you may find yourself on the right path to running your dream business for years to come.
Frequently Asked Questions (FAQs)
Why is it important for businesses to set goals?
Setting business goals helps business owners, managers, and employees understand what they are working towards. Without clear goals, it is easy for a business to drift aimlessly toward poor financial failure. Goals are motivating and help you discern whether your business is successful or failing.
How does ownership affect business goals and governance?
Ownership and business structure are vital in determining business goals. Business owners and managers are the right people to set the main goals for the business. Supervisors and team leaders must work with higher-level managers to ensure everyone is aligned. Ultimately, it comes down to the business owners or investors.
References:
- Youth Leaders of America Initiative. “Setting and Achieving Goals.”
- University of Texas Permian Basin. “Balancing Long-Term and Short-Term Financial Planning.”
- IRS. “Topic No. 409: Capital Gains and Losses.”
Source: https://www.thebalancemoney.com/the-ultimate-guide-to-small-business-goal-setting-2951416
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