My business partner, George Huang, and I have been working for months to develop and start a new business. One of our most difficult tasks has been setting our short-term business goals to support our vision of what we want to accomplish.
Is goal setting really that important?
Before I answer that, give some thought to these following statistics. More than 4 out of 5 business owners surveyed in the fourth annual Staples National Small Business survey don’t keep track of their goals. In addition, 3 out of 4 have not yet accomplished their vision for their business. I suggest that the failure to achieve their vision is no surprise. If they don’t set and track business goals, they are hoping for good results. Unfortunately, hope is not a plan.
Goal setting can be likened to picking a place for you and your family to spend a vacation. Planning is akin to mapping out a route to get to your vacation spot. Tracking is checking your current location against your map to see if you are on course and on time.
This process becomes even more critical if you have a partner, as I do.
Although George and I generally agreed on the products and services we wanted to offer, we had different views about marketing, capital commitments and milestone measurements. Even if you have no one else to answer to, you still have options and choices at each step.
Our long-term goals are clear. We want to build a substantial business and exit within three to five years. We want the firm to operate ethically and to provide a needed service to entrepreneurs.
Short-term goals are the action plans to achieve long-term goals. If short-term goals are to be effective, some requirements are necessary. They must lead to the accomplishment of the long-term goal. They must be specific. No room for fuzzy thinking here. They must be measurable, usually in dollars. They must be realistic. It’s OK to stretch, but you must have the resources in money, time and people to achieve them. Finally, they must be time-specific, meaning there must be interim deadlines and a final deadline.
Ask yourself what must be done each day to reach your goals. Set a review cycle for each short-term goal. The cycle may be monthly, quarterly or any other appropriate period. During review you measure actual results against expectations. If you are on target, continue the plan. If you are behind target, revise the plan and set a new measurement for the next review period.
Employees must be involved in goal setting. Top-down directives will not work. Your staff must have some ownership in the goals to achieve them.
The word George and I use to stay on track is “focus.” We focus on the long-term goal. If an element of a short-term goal deviates from a direct path toward the long-term goal, we stop and redirect our thinking.
Bowser@BusinessValueInsights.com. Dan Bowser is president of Value Insights, Inc. of Durango, Chandler, Arizona, and Summerville, Pennsylvania.