By: Marshall Atkinson, Business Coach, Atkinson Consulting
When you’re launching a new business, you need a plan detailing how you will bring everything together. A big part of that business plan will be the goals and milestones you hope to achieve.Yet, it’s surprising how many entrepreneurs fall short simply because they didn’t fully map out their specific goals, nor detail the steps they need to take to get there.
This is where SMART Goals come in. A SMART Goal is an acronym for Specific, Measurable, Achievable, Relevant and Time Bound. To make sure your goals are attainable each one needs to be:
Specific- simple, sensible, with significant potential results
Measurable- quantifiable, important, and motivating
Relevant- reasonable, realistic given available resources
Time bound- time-based, time limited, time/cost limited
The SMART method helps to keep you and your business activity focused. It gives you a decision-making framework and a sense of direction, which in turn helps you organize and reach your goals- from big to small.
So, what goal do you want to accomplish?
Hit a sales number? Build out a lead-generation tool for your sales team? Develop an innovation or test out a new marketing tool?
Is Your Goal Specific?
Specific means exactly that. It isn’t a general feeling, or some wishy-washy statement like, “Sell more” or “Make it work better” or “Hire a salesperson.”
Specific would be:
-Have $253,000 in sales with a 52% profit margin with six new accounts.
-Increase efficiency by 23% by implementing the new production process outlined with the process map outline.
-Hire a proven sales leader with at least 8 years of industry experience, an MBA from an accredited top 30 business school, and a proven sales record of at least $2.5 million in sales annually.
The difference is obvious. For your goals, state your intention as specifically as you can with language that focuses on what you want to achieve.
A Look at SMART Goals in Action
But what does SMART goal decision-making look like? Consider the points below:
Is Your Goal Measurable?
For anything to stick we need accountability. This means we need to be able to quantify or measure the outcome.
It’s a number, a data point. Pass or fail. For example:
-In sales, it’s how many orders per day, week or month to hit that $253,000 goal. Also define how the profit margin information gets calculated.
-For production, cite how the group is measuring and how the 23% increase is defined. What was the original number and the new number? What’s the time period for measuring? How do you know it’s accurate?
-For hiring, how many applicants are responding? Being interviewed? Offered the position?
Remember, you can’t manage what you don’t measure. Having data points when you’re working on a goal is an easy way to gain clarity as to how you are doing in the process.
What’s a good number for you? What’s a bad number? Define those.
For your goals, define how you’re measuring to understand your progress toward your goal.
Is Your Goal Achievable?
Can you do it? Plenty of people bite off more than they can chew. What’s reasonable? Don’t push out goals that can be completed too easily. What’s going to really make a difference?
-In sales, what makes sense? A $253,000 goal might be a lot of money to one company, but a drop in the bucket to a company like Google. Use historical data, research or other information to guide you.
-Will a 23% increase in production be achievable? How long does something take now? What’s the current efficiency rate?
-For hiring, getting a top candidate to interview might be easy for a Wall Street hedge fund manager, but problematic for the corner deli.
Be sure to list how you are arriving at your goal. Why do you think whatever you want to do is something within reach? Is it realistic within the context of time, skill, financial resources, experience, equipment, or other means?
List why you think your SMART Goal is Achievable based on your current situation.
Is It Realistic?
Does your SMART Goal align with other ideas or tasks that you’re currently working to build?
Is this something that Realistically you should spend the time, energy and financial resources pursuing? It’s fantastic to want to make new improvements, but how does this goal fit in with other priorities?
-Looking at projections, the new website won’t be finished for several more weeks, putting the $253,000 goal in jeopardy. Maybe a better goal to spend time and effort with would be the online store development instead.
-A 23% increase in production sounds interesting, but sales has overbooked the company by 223%. Adding another shift or contracting work out may be a better solution.
-Your ideal candidate is interested, but based on the qualifications is demanding compensation more than twice what you can afford. What would be the realistic compensation package that your company should offer?
Shooting for the moon is great, as we all want the best we can achieve. However, SMART Goals work better when what’s Realistic is defined in the goal. What are the limits or parameters? Define the range.
Is It Time Bound?
When does your goal have to happen by? Here’s where our favorite tool, the calendar, helps out.
On a certain day? By a certain time? The more detail you include, the better your team can function as they know the rules.
-For sales goals, can you set them per day, week, month, quarter or year? In our example, the $253,000 goal is for the end of the current month. That’s $63,250 in sales per week, or $12,650 per day, or $1,581.25 per hour for an eight-hour day.
-For production efficiency, this could work the same way. By the end of the month, the average production rate will be 23% higher than the previous month last year.
-In hiring, you could also state when the job opening becomes available and when it closes. When will the new hire start?
For SMART Goals, people want to know “when” something has to happen. It helps anyone working on the goal to understand the deadline and be empowered to make decisions to achieve the goal on time.
Now, you can define the times and dates for when you’d like to achieve goals, including action items along the way.
SMART Goals: Bringing it All Together
For the three examples that we’ve used, the complete SMART Goal sentence for each could look like one of these:
-Have $253,000 in sales with a 52% profit margin with six new accounts by the end of the month. This will be a 12% increase from sales from the previous month. The new marketing video series will coincide with this sales push and be the lead generation tool for qualified leads that will come from the free webinars offered. Our benchmark goals will be to hit $63,250 in sales per week.
-Increase daily efficiency rating for the production teams from 10% to 33%, (a total of 23%) by implementing the new production process outlined with the process map outline. In the test group, they achieved a 42.3% efficiency increase in the trial period. Based on the previous date, skill levels of production teams, complexity of work, the average increase goal should be attainable with managerial support and employee training.
-Post a new job position for 30 days and have at least 20 qualified applicants, and then hire a proven sales leader with at least eight years of industry experience, an MBA from an accredited top 30 business school, and a proven sales record of at least $2.5 million in sales annually. The projected salary range will be our standard senior salesperson role, but will be increased by 22% due to market conditions and pressures. For example, if you need to fill a position needs to be filled by August 1, then on-boarding should start by August 5.
Of course, these are generic examples, but I’m positive that you can understand the need to write them this way. They answer the basic questions of “who,” “what,” “where,” “when” and “how.”
Business success coach and speaker Marshall Atkinson is a leading production and efficiency expert and has helped thousands of business es level up. As a coach, Atkinson focuses on operational efficiency, continuous improvement, workflow strategy, business planning, marketing, employee motivation, management and sustainability. He’s the owner of Mesa, AZ-based Atkinson Consulting. The author of several best-selling business-growth programs, Atkinson released Moving Past Disaster: Develop Your Business Next Normal in May 2020. Contact: email@example.com or (850) 445-3155.