Why it’s important to set goals for your small business
Lots of businesses fail because entrepreneurs don’t take the time to set well thought out goals. Planning and goal setting separate successful businesses from the herds of new enterprises that go out of business every year. The fact is that it’s almost impossible for your business to thrive if you don’t have well defined short term and long-term goals.
In this article, let’s explore the question “Why is it important to set clear goals for your business?” Goals are indeed important, whether you are running a solo enterprise, or you are at the helm of a large company.
Here are five reasons why goal setting is vital to your success:
Goals are empowering
Goal setting empowers you by giving you the knowledge and information that you need to succeed. When you have clear goals, you’ll know what you are working towards, what you have to do to achieve your targets, how much it’s going to cost you (in terms of time, money, and other resources), and what kind of help you will need.
Because knowledge is power, goal setting gives you the power of mastery over your business, and it enables you to get every aspect of the business under control. Goal setting empowers you to make better decisions during everyday operations, including putting a check on runaway spending and limiting your production costs. The more you know about your business, the better equipped you will be to run it.
Clear goals keep you from losing perspective
If you have clearly defined goals, and you relentlessly work towards achieving them, you will never lose your perspective. However, there is a caveat to this point – in order to keep your perspective, you need to have the right perspective, to begin with. As an entrepreneur, you should learn to set goals using the SMART system, which is explained in detail in this article on WorkWise.
This means creating goals that are Specific, Measurable, Achievable, Relevant, and Timely. Unless you adhere to this system, you could end up with goals that lack the right perspective. Many entrepreneurs make the mistake of setting goals that are impractical, only for them to become frustrated and feel like failures when they are unable to achieve them. You may be tempted to overestimate your profit projections or to expand your business at a rapid and unsustainable pace, so make sure that you manage your expectation as you set your goals.
Goals outline your path to success
If you have specific goals, they’ll serve a roadmap for you as you grow and expand your business. Goals will enable you to know at all times what step you need to take next, where to focus your resources, and when you need to correct your course in case you have deviated from your plan.
Unless you have clear goals, you will be charting a blind course into the unknown, and you won’t be able to assess the progress that you have made or know how much harder you have to work. Goals are generally categorized into two – long-term and short-term goals. As long you understand your goals and ensure that you hit each milestone, you’ll be sure that you are on the right path to success.
Goals help you define and quantify success
Speaking of success, how will you ever know that your business is successful unless you have predetermined goals? As part of your goal setting, you need to come up with numerical quantities as targets for various aspects of your business. How much money do you want to make by the end of the year? How many items do you want to produce within a day? How many branches do you want to open in the next five years?
For you to be successful, you need to define what success means to you, and having goals will help you do that.
Goals motivate your employees and inspire them to reach higher
Setting clear goals for your employees will give them something to work towards. If each employee understands the role that they have to play towards achieving the company’s collective goals, they’ll be more motivated and productive. However, you should be careful not to overshoot when you are setting goals for your employees. If you set unachievable goals, your employees could feel overwhelmed, and this could be counterproductive.
Remember to give your employees recognition for their contributions towards achieving company goals. As you achieve each goal, take the time to celebrate, and be sure to thank everyone for a job well done.