For most of us, moving forward into a new year also means turning over a new leaf. For small business owners, it is synonymous with making changes for the better. Sometimes, though, these changes don’t stick, or become counterproductive. Often, this happens because these changes are more of resolutions, and not really goals. Fortunately, anyone can learn how to make small business goals that are specific, action oriented, and gears a company for success.
Understanding the difference between resolutions and goals is critical when you want to start the new year with an effective business plan. Resolutions may capture your ideal aspirations, but if you want something more tangible and measurable, you need to set smart business goals. In this blog post, we’ll guide you through creating a realistic and achievable roadmap to success.
Common Small Business Goals
Over 80% of small businesses have no employees, which means these likely started out as passion projects. Of course, not all companies have the same origin story—some are born from a recent innovation, while others are from seed funding. Despite their diverse backgrounds, though, small businesses have similar goals. These goals, crucial for growth and sustainability, serve as the pillars upon which successful small enterprises are built.
Here are some of the most common goals that you can set as a small business owner:
Reduce Operating Expenses
Over half of small businesses encounter financial problems, with 43% saying that operating expenses are their biggest challenge. So, creating an efficient cost management system should be an SME owner’s priority when making business goals for the coming year. Reducing operating expenses not only improves your financial health but also allows more flexibility when you make decisions.
Here are some ways you can significantly lower your overhead:
Review regular expenses
Small business owners need to review their regular expenses when setting new year goals. By reviewing expenses, you can easily identify unnecessary or excessive expenditures, leading to better cost control. It also allows you to create better budgets and be agile in adapting to changes in the business environment.
Renegotiate supplier contracts
Supplier landscapes, especially post-pandemic, could change significantly in a span of months or even weeks. So, renegotiating contracts is something to consider, since the initial contract may have changed since it was established. By reassessing and negotiating contracts, businesses can secure more favorable terms, better pricing, or improved payment terms.
Adopt cost-effective technologies
Small business owners should also embrace integrating cost-effective technologies when setting annual business goals. These tools can significantly enhance operational efficiency and streamline processes. Additionally, cost-effective technologies can improve customer experiences, facilitate remote work.
Increase Profitability
According to an Intuit global study, 61% of small businesses struggle with cash flow. Increasing profitability while reducing operating expenses is the most basic rule of business, something all entrepreneurs strive for. But it’s still good to set this specifically as a goal at the start of the year, to give direction to your growth plan.
That said, increasing profitability goes beyond boosting sales. It also involves making improvements to your existing business model for better revenue generation. The strategies you can try may vary depending on your line of business, but here are some techniques that can work as starting points:
Revisit your sales approach
There’s no getting around it: all businesses are people-centric organizations. Even B2B companies, yes! After all, they need to appeal to the decision-makers of their target markets. So, it’s good to uncover new ways of understanding the needs and pain points of your market. Tailor your sales processes to address those specific concerns—you can do that by interviewing current customers, digging through forums and reviews, and surveying customer sentiments on social media.
Exploring new markets
When trying to reach new customers and make your business more awesome, think about who they are, where they live, and what they like. Dive deep into niche markets and get creative with your online presence. Try out new things like interactive content, live streams, or even augmented reality to make your business stand out online.
Diversifying your product lines
Speaking of branching out, one way to increase profitability is to offer new products or services. Start by figuring out what your current customers are missing. Or, more importantly, what needs other companies are fulfilling for them.
Aside from those techniques, you can also take advantage of the benefits of CRM data management to track customer feedback and refine what you can offer. These are some of the goals you can set to drive significant profitability. Remember that sustainable growth comes from a deep understanding of your value proposition and the market you serve.
Hire and Retain Top Employees
According to a CNBC survey, over half of small business owners struggle to hire quality employees. Moreover, retaining qualified workers is a common concern. It’s important to address these issues since the strength of your operations lies in your workforce. So, one of the goals you can set for your small business is to develop a better strategy for hiring and retaining top employees.
A good start would be to determine whether you need a recruiting assistant. After all, it can be challenging to find and vet candidates while you’re running your business.
At the same time, you should identify opportunities for making your company attractive to top talent. Here are some examples:
- Offer competitive salary
- Provide professional development opportunities
- Develop a healthy work culture
Once you’ve built your dream team, make it a goal to retain your employees. According to Gallup’s Employee Retention & Attraction study, the top reason why workers leave is to seek “greater work-life balance and better personal well-being.” So, try focusing on developing a work environment that promotes such a culture. Here are some retention strategies you can implement:
- Offering flexible work arrangements
- Requiring employees to disconnect from work outside business hours
- Encouraging workers to use their vacation credits
- Having a supportive and inclusive work environment
- Offering resources such as mental health days, wellness programs, or subscriptions to meditation and fitness apps
- Delegating reasonable workloads
Improve Customer Service
According to a Salesforce study, the top factor that influences a consumer’s purchasing decision is the way a company treats its customers. So, in a crowded marketplace, what will set you apart is exceptional customer service. When you make this one of your small business goals, you need to understand and exceed what the market expects from you.
Some of the ways you can achieve this goal are by investing in staff training, ensuring prompt and effective communication, and implementing customer feedback systems. By creating a customer-centric culture, you can build strong relationships, enhance customer loyalty, and increase referrals. Remember, a satisfied customer is often a repeat customer.
Implement Sustainable Practices
Deloitte’s 2022 CxO Sustainability Report revealed that 67% of global companies have started to use more sustainable materials. As a small business owner, you can make it a goal to incorporate sustainable practices. Aside from doing your part for the environment, you’re also appealing to a growing segment of eco-conscious consumers. Here are some ways you can implement this practice in your operations:
- Cut down energy consumption – Encourage practices like turning off lights and equipment when not in use.
- Reduce waste – Implement a paperless policy where possible and encourage double-sided printing to minimize paper use.
- Use eco-friendly materials – Use sustainable, recycled, or biodegradable materials in your products and packaging.
- Hybrid work arrangement – Let employees work from home for some days in a week to reduce the carbon footprint associated with commuting and office energy consumption.
Level Up with SMART Small Business Goals
“A goal without a plan is just a wish” – Antoine de Saint-Exupéry
A study published in the Psychological Bulletin reported that 90% of individuals who set specific goals perform better. This happens because people with specific goals tend to direct their attention strategically, mobilize their efforts, and develop a clear plan.
So, when you’re making small business goals, the key is to take a careful approach that ensures progress along with sustainable and measurable success. One way to do that is to use SMART goals.
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. By following this approach, you’re setting a clear direction and action plan for your objectives. Let’s break down each component of this powerful tool:
S – Specific
When setting your goal, make sure that you have exact, clearly identifiable outcomes in mind. If we take one of the examples we mentioned earlier, you wouldn’t simply write down “increase profitability” and call it a day. Instead, you would be more detailed about your objective.
For instance, you can say, “raise sales by 15% by the end of Q1.”
By getting into the details of your goals, you’re eliminating ambiguity and giving your operations a clear direction.
M – Measurable
You also need to track your progress. So, your goal needs measurable criteria to help you identify whether you are achieving your objectives. In our previous example, the 15% sales increase counts as a quantifiable target. By using a measurable goal like this, you can make appropriate adjustments along the way. Moreover, you’ll have a visible marker that will motivate you to push forward.
A – Achievable
While having ambitions is important for a small business owner, you also need to be realistic and practical. So, your goals must be achievable within your business’s current resources and limitations. Otherwise, you’re setting overly ambitious goals that can only cause demotivation and frustration. While your achievable goals should challenge your team, they should still be practical.
R – Relevant
When setting small business goals, remember to keep them aligned with your broader objectives and values. Look at what you want your company to achieve in the long run or what your overall mission is.
Let’s say your long-term plan is to expand to a bigger market. In this case, your goal should be to generate a specific number of qualified leads within a timeframe.
Another aspect of a relevant goal is its suitability to the current economic climate, industry trends, and the resources available to your business. While your objective is meaningful and challenging, it should not overstretch your company’s capabilities.
T – Time-bound
Finally, your goals should have a clearly defined timeline. A deadline creates urgency and prompts action. Moreover, it helps in prioritizing tasks and managing time effectively, which is crucial for small businesses with limited resources.
Time-bound goals also facilitate regular review and adaptation. A specific timeframe for objectives automatically prompts you to check your progress. If you notice that your performance is not on track, you can revisit and adjust your strategies.
Creating Short-Term Goals for Your Business
Short-term business goals are the stepping stones that will move you towards your overall mission. Usually, these objectives are achievable within less than a year or a few months. However, their nature and timeframes can still vary significantly, depending on your business’s immediate priorities and resources. In any case, your short-term business goals must align with your overarching strategy. Moreover, you should set them within a realistic yet challenging timeframe.
If you’re running a product-based business, a SMART short-term goal could be:
“Launch a new product line by the end of Q2, achieving a 15% overall sales increase in the first month post-launch.”
- SPECIFIC – Launch a new product line
- MEASURABLE – 15% overall sales increase
- ACHIEVABLE – Within available resources and adequate marketing efforts
- RELEVANT – Expanding your product line
- TIME-BOUND – By the end of Q2 / first month post-launch
Meanwhile, here’s an example of a SMART short-term goal for a service-based business:
“Increase the client’s website conversion rate by 15% within the next five months through targeted A/B testing and personalized landing pages.”
- SPECIFIC – Target conversion rate increase through A/B testing and personalization
- MEASURABLE – 15% conversion rate increase
- ACHIEVABLE – Using proven conversion rate optimization strategies
- RELEVANT – A conversion rate increase directly influences the success of digital marketing efforts
- TIME-BOUND – Goal to be achieved within the next five months
How to Create Long-Term Business Goals
Setting long-term business goals gives you a clear vision and direction for the future. They typically extend beyond a year and shape your company’s trajectory. By strategically guiding your plans, you can ensure sustained innovation and growth.
If you’re running a product-based business, a SMART long-term goal could be:
“Increase market share in the primary product category by 30% over the next three years through strategic partnerships, expanded distribution channels, and targeted marketing campaigns.”
- SPECIFIC – Increase market share in the primary product category
- MEASURABLE – 30% market share increase
- ACHIEVABLE – Through partnerships, distribution, and marketing
- RELEVANT – Improving the business’s position in the market
- TIME-BOUND – Over the next three years
Meanwhile, here’s an example of a SMART long-term goal for a service-based business like a real estate broker:
“Increase client referral rates by 30% over the next six months by implementing a comprehensive client feedback and follow-up system.”
- SPECIFIC – Boost referral rates through improved feedback and follow-up
- MEASURABLE – 30% referral rate increase
- ACHIEVABLE – With a focused approach to client engagement
- RELEVANT – Directly impacts client satisfaction and business growth
- TIME-BOUND – Set to be achieved in the next six months
Dedicate More Time to Making Business Goals
In your pursuit of success, it’s essential to recognize that resolutions, typically vague and aspirational, might not deliver tangible results as effectively as the specificity and action-oriented nature of SMART business goals. All business owners would benefit from making SMART goals—Specific, Measurable, Achievable, Relevant, and Time-bound—at the start of the year.
By understanding the difference between resolutions and SMART goals, entrepreneurs will be better at crafting realistic, measurable, and strategic objectives that will steer them towards sustained growth and success in the upcoming year.
The best time to launch into your 2024 growth goals is yesterday! The second best time? Today. Get the ball rolling by putting more hours into strategic planning. Leverage outsourced staff to help you dedicate more time to strategy—here’s more reasons why you might want to outsource tasks!
Eunice Samson’s interest in keeping up with the “bleeding edge” of technology has led her to a career in digital marketing. She’s currently writing SEO content for eCommerce, SaaS, PaaS, and IaaS companies. Aside from searching for opportunities to increase her online marketing knowledge, Eunice also scours the Internet for useful bonuses and coupon codes that she can use to fuel her love for photography. During her free time, she watches professional photo retouching tutorials between streaming her favorite TV shows. Fun fact: Eunice has never met a cupcake she didn’t like.
