Money matters when you’re running a business. When you’re drilling down to the dollars and cents, fuzzy goals are the last thing you need — especially when goals will identify what you’re working towards as a company. Goals help you, your business, and your people to move forward. They are an important source of motivation, so be clear about what you want to achieve by applying the S.M.A.R.T approach to your business finance goals.
The first step in setting business finance goals is determining exactly what you want to accomplish. Quantify your goals by being specific. For example, don’t just aim to increase top-line sales; aim to increase it by 5%. To test if your goals are specific enough, try answering the 5W questions — what are you trying to accomplish, why is it important, where will you work on it, who needs to be involved, and which actions should they take?
Make sure your goals are measurable so you know when you have achieved them. This can be quite straightforward in some cases, like setting a sales target for a product, but less so in others, such as when you’re trying to measure marketing success. For intangibles like the latter, you’ll want to start by defining key performance metrics so you have something measurable to track.
An attainable goal is one that is doable. You may have to stretch your team to achieve it, but it is not out of reach. Conducting research is a great way of understanding whether your goal is possible to achieve. If it’s not, a simple way of adjusting it is to lower the number or extending your timeframe.
What’s the difference between attainable and realistic, you ask? It comes down to the resources at hand. It may be doable to sell 10,000 units of your product in a month, but is it realistic when you only have one salesperson? To make sure your goal is realistic, do a stocktake of the resources you have and the constraints you face.
Great goals should be time-limited, in that you have a specific timeframe for completing them. This applies some pressure and helps you sharpen your focus on what needs to be done. It also provides a sense of urgency and ensures that you have your priorities straight, especially when you’re juggling a full plate.