The greatest basketball player of all time once said, “You have to set your goals before you can achieve them.” Even with his incredible talent, Michael Jordan recognized the importance of setting clear goals. Most businesses want to increase profitability, help their employees become more productive, or additionally, take a greater share of the market. However, without setting specific targets, and developing a plan to hit them, it is less likely that these goals will be achieved. To help you get started on defining financial goals for 2017, try this well-known, and effective method called S.M.A.R.T.
Set S.M.A.R.T. Goals
The SMART concept for goal setting was introduced in an article in the November 1981 issue of Management Review on the importance of setting business objectives. It’s become widely used and adapted because it provides a simple, logical framework, and the acronym makes it easier to remember.
Specific – Be specific. For example, set specific revenue targets, e.g., increase revenue by 10 percent by cross selling new products to current clients.
Measurable – Measurable goals inspire action, and provide markers for success. If your sales team sets a goal to close 20 deals by the end of the first quarter, this can be easily tracked. Along the way, plans and actions can be adjusted to meet the target.
Achievable –Setting achievable, but inspirational, goals is important. The purpose of goal setting is to guide growth and success. Set goals that are ambitious, but attainable, and guide your business to the next big milestone.
Relevant – Setting a relevant goal means that it aligns with the overall mission of the business. For example, if you’ve determined to increase revenue by 10 percent, determine the most logical areas, based on experience and known factors, where this revenue increase can be derived.
Timely – Lastly, set timeframes for each financial goal. “In the first half of the second quarter, a new, long-awaited product will be introduced, and we are targeting a 10 percent increase in top-line revenue by the end of the year.”
Once you’ve set your goals, work towards them methodically. Share them with your team, and monitor progress. A commitment to the process ensures progress will be made, and you will learn a lot along the way.