Setting business goals: The first step to a successful business
Summary
Business goals are a predetermined target that a business or individual plans to achieve in a set period of time. This article discusses the importance of business goals and reasons why you should set them for your team.
Establishing company goals is a common business practice—and for good reason. Setting clear business goals influences motivation and increases performance . Whether you work at a small business, large enterprise company, or as an individual, you are more likely to succeed with strong business goals.
These are just a few benefits the goal setting process provides. Whether you're looking at the big picture or looking for small stepping stones, we'll explain everything you need to know to set goals for your business.
What are business goals?
Business goals are a predetermined target that a business or individual plans to achieve in a set period of time. These goals are often split into short-term goals and long-term goals . Business goals can be general and high level, or they can focus on specific measurable actions.
A good example of a general business goal is a mission statement. Missions statements are a general goal because they don't have one metric that defines their success. They’re more often used as a guiding North Star—something your team can strive for as opposed to hitting hard numbers.
Alternatively, you can set specific goals—measurable goals that are easy to track as your team progresses towards them. When someone talks about "setting goals" or the "goal setting process," they're talking about specific goals. A common goal setting process to use is the SMART goals process .
Short-term goals
Short-term goals are often bound by a set period of time, usually ranging from a few hours to a full year. Long-term goals can also be time-bound, but if they are, they’re typically set further into the future.
Short-term goals are often used as building blocks towards larger goals. A common strategy in business is to set multiple short-term goals to make the long-term goals more achievable.
Examples of short-term business goals:
Increase net promoter score by 10 points this quarter.
Hire 12 new support representatives by the end of the year.
Increase employee satisfaction by 20%.
Long-term goals
Long-term goals are bigger visions—goals you want to achieve further into the future. A common long-term goal is a 10-year goal. Think about where you want your business to be 10 years from now. What business objectives do you want to have achieved by then? What new businesses do you want to break into, if any?
Long-term goals are often used as vision or mission statements —these goals serve as a compass for your business to help you move in the right direction. Think of your goals as a map to get you where you want to go. Long-term goals may not tell you how to get there exactly, but they point you in the right direction. Short-term goals are like a GPS. They provide step-by-step directions on how to get where you want to go.
Examples of long-term business goals:
Nike : To bring inspiration and innovation to every athlete in the world.
Patagonia : We're in business to save our home planet.
Google : To organize the world's information and make it universally accessible and useful.
Why are business goals important?
Setting business goals is a best practice for a reason—goals help drive businesses in the right direction. Here are a few more reasons why companies take the time to establish strong goals.
Confidently define success
One of the easiest ways to know if your team is successful is by clearly outlining what success looks like. When you set your goals, take into consideration what you know your team is capable of, and push them slightly farther than expected.
There are a few common frameworks used to define goals. One of the most common ones used to create measurable and actionable goals is the Objectives and Key Results (OKRs) framework.
Connect work to goals
A good business strategy to get into the habit of doing is connecting your business goals to the work your team is already doing. When you connect daily work to short- and long-term goals, individual team members have a clear sense of what they need to do, when they need to complete it, and the strategies they're doing to achieve those goals.
Not only are team members more confident in what they need to do, but it gives them a sense of pride and ownership over their work. Team members are confident in how the work they’re doing impacts your business and how they’ve contributed to that success.
Keep teams aligned
A key benefit of using business goals is to align teams towards a common goal. Establishing clear business objectives allows team leaders to define which tactics their individual teams should use to achieve these goals.
For example, imagine your company's overall business goal is to increase profitability by 10%. This is an overarching goal, but there are many different ways your company can achieve this. By establishing smaller, more tailored goals, business leaders can define the specific strategy you plan to take to achieve this goal. Your sales team may increase their sales quota, and your marketing team may implement a new outreach strategy. These are two different tactics that can be implemented to ultimately reach the same goal.
Maintain accountability
Once you set business goals, you can then break them down to the individual level. Using a technique like this can help maintain accountability from the leadership level all the way down to individual team members. When individual team members are responsible for their individual goals, it's easy for managers to gauge how they're performing and when they might need more support.
Inform decision-making
If your company regularly tracks its business goals, you can use past goals as a way to inform your decision making process. For example, if your team sets up a new marketing strategy to track your goals and progress, you can use that information to set your business strategy for the next year based on performance.
Tips for setting clear business goals
Now that you know the reasons why business goals are important, here are a few tips on how to establish them.
Use a framework to set goals
If you're on the path to setting your first business goal, it can be challenging to figure out where to start. You want to make sure that your goal is achievable, but not so easy to achieve that it's not a challenge. Goal setting frameworks like SMART goals or OKRs are a good way to establish your first set of business goals.
Co-create with other business leaders
Your team doesn't work in a bubble. The work that your team does can affect other teams in your company and your business strategy as a whole. This is why co-creating with stakeholders is important. By working together, your team can utilize their unique knowledge and experience to set goals and create a sound business plan.
Start with the big picture
When you're establishing your goals, choosing numbers and tactics can feel overwhelming. To prevent that, start with the big picture first. Focus on answering the questions:
What do you want your company to stand for?
Why was your company created?
Where do you want to be in 10 years? What about 25 years?
Once you’ve defined a big picture mission, break it down into smaller, more actionable goals. What steps can you take to get there? What new products can you introduce to help achieve that overall, big picture mission?
With goal setting, there is no right or wrong answer. It's all about finding the strategies and methodologies that work best for your team.
Manage goals using software
There's no use in setting goals if you set them and forget them in a document somewhere, only to be opened again at the end of a quarter. Using software to regularly track goal progress is important, and what better way to do that than to use software that connects your goals to the work that needs to be done?
Connecting the work you’re doing to goals is easy. Guru aligns their company OKRs to their projects with UDN Task Manager . The Guru team uses UDN Task Manager as a source of truth for clarity and accountability company-wide.
Start setting—and achieving—business goals today
All businesses start small, and setting goals is how they grow into successful companies. If you're interested in learning more about different goal strategies, how to measure them, or where to start with planning, visit the UDN Task Manager goals resource page for more information.
