When starting out or establishing yourself in business, it’s very easy to take everything as it comes and go with the flow so to speak. However, it is crucial to set yourself targets and account for those targets as this is the driving force that will spur you on to succeed your business goals and grow over time.
According to a survey carried out by the business services firm Clutch, almost 65% of small business owners met more than half of their objectives over the year, whilst a modest 5% stated they achieved all their goals. By regularly setting the bar and benchmark for your business, it provides a visual incentive to conquer those targets, yet the activity of goal setting sounds a lot easier than it actually is.
We spoke to our Director and Head of Advisory, Joe Sword, on the importance of goal setting, what can go wrong if targets aren’t in place, and how the SMART criteria is a successful metric to create and attain your goals.
Goal setting is perhaps one of the most underestimated aspects of business. Why is it so important and why do so many business owners not pay this enough attention?
To people who have been successful in business, it’s so important. Goalsetting basically gives you something to work towards, but it can be difficult to stay on track especially nowadays when there are so many distractions in the world. It allows you to say ‘this is where I’m heading’ and ‘this is what I want to achieve’ which is fundamental in life, not just in business.
Without it, you certainly run the risk of running around in circles and falling into the trap of becoming bogged down by your busy schedule. When people ask me about goal setting, I like to refer to the example of a sat nav which nowadays pretty much everyone uses when travelling long distance. The ‘sat nav’ of your business allows you to not only pinpoint your final destination, but to also plot the best initial route to take, and pivot should something along the preferred route changes. You wouldn’t get into your car without checking the best route, particularly if there’s traffic jams or roadworks along the way and this really should be the same in business.
What are some of the fundamental occurrences that can take place if relevant goals aren’t set in a business?
Ultimately, it’ll comes down to not getting what you want, plain and simple. That might mean you don’t get what you want full stop, or you necessarily won’t get what you want in the time frame you desire. If you’re not setting goals, then you aren’t putting deadlines or prospective dates to work to something. If you follow this method, then your mindset will be ‘well if I go for it and achieve it then great, but if it doesn’t happen then so be it’. This is a really unhealthy lack of boundaries to set yourself in business, and will almost certainly result in failure.
If you want to progress your business and fast forward your success story, then you are going to need timeframes to work to, and your goals visualised. The more specific you are, then the stronger you become and the more likely in succeeding. The same goes for the opposite, the less specific you are then the weaker you’ll become in a business sense, which means you’re less likely to succeed.
What is the SMART breakdown and how does this make goals clear and reachable?
The SMART breakdown is a highly successful way to test whether your goal is effective and realistic. The S stands for specific, which we’ve touched upon already. Making your goal as specific as possible and outlining exactly what you’re going to do. Probably the most famous goals across the world, are a person aiming to lose weight and a person who wants to make more money. This may seem admirable on the offset, but if you’re not being specific enough with a precise figure and how you’re going to achieve this then you have nothing to account for. A common goal in business I’m hearing at the minute is ‘I want my team to be happy’. How can you measure that, especially something which relies on opinion, communication and emotion. what action is going to be taken or what is going to be done to make sure they become and remain happy?
This leads nicely into the M, which is measurable. Can you measure your goal, because if it’s too vague then it can’t properly be measured and therefore the achievement isn’t clearly defined. Probably the most famous goals across the world is the target of losing weight or a person who wants to make more money. This may seem admirable on the offset, but if you’re not being specific enough with a precise figure and how you’re going to achieve this then you have nothing to account for.
The A stands for attainable or achievable, and simply boils down to whether it’s realistic your goal can be met. At Nordens, when we work with people on their goal setting there’s usually an immediate rush of motivation and often goals are set sky high, for example I want to turn over a million in my first year. It’s amazing for people to push themselves and aim high, however there needs to be an element of common sense and sensibility into whether that really is achievable.
The R is relevancy. Business owners are incredibly busy people and often have their fingers in many pies, so choosing something they want to achieve needs to be relevant to the end goal. Goals should be the steppingstone to the bigger vision, the ‘why?’ in your business. You have to ruthlessly critique here and ask yourself is this action moving me towards my long term goals, or is it just something easy or common that is enjoyable?
And finally T is for timely. This is no doubt one of the biggest weaknesses people face when setting goals. If you don’t put a time frame on it then the goal will just be open ended. If your goal is I want to double my profit, then when do you want to do this? That deadline with it brings accountability, which is so underrated when it comes to thriving in business. Whether this accountability comes from yourself, a coach, or anyone else, you are committing which means the chances of success are heavily increased. We all know in life though, sometimes your goals aren’t achieved and that’s perfectly fine, you’re human after all. But having the mindset to face that goal again and conquer will set you on the right path.
The SMART criteria is such a valuable way to not only create your goals but also test them out.
The SMART breakdown has been criticised by many for not being flexible or adaptable enough in terms of long-term goal setting, whilst also potentially stifling creativity. Do you agree with this?
I can definitely understand this criticism and I have to admit I feel that the SMART breakdown works best for short-term goals, as opposed to long-term goals which I tend to label as the vision or the ‘why?’ of the business. The bigger vision and the ‘why?’ in your business are allowed a bit more freedom to be vague and will rely more on feeling rather than fixed facts and figures.
Let me come back to the sat nav analogy, say if we were going up to Nottingham from London. There are numerous routes that can be taken but the overall aim is to get to the end destination. If you become overly rigid and say I only want to take the route, then you’re going to get caught out sooner rather than later as what’s going to happen if a particular road on that route is closed or has lots of traffic? There needs to be room for flexibility and pivoting and sometimes the SMART criteria doesn’t allow this. The SMART goals will ultimately test which particular roads and pit stops you’re going to go down along the way, but the overall end destination requires more fluidity so to speak.
Have you used the SMART breakdown in your own life?
Yes, admittedly I do for lots and lots of things both personally and professionally. I know I keep repeating this, but the most important aspect of goal setting is the fact it creates accountability, although self-accountability can often lead to you making excuses for yourself and if you are only accountable to yourself, who will know if you miss your goals.
Having a person or group of people, holding you to account is so crucial and can never be underestimated. I do believe though that just the simple thing of telling someone about your goals, it really provides the incentive to complete the goal set.
We started the article with a stat and we would like to conclude with one, something that I understand, but when reading it for the first time it was still staggering . A study by the Association for Talent Development found that the probability of achieving a goal hinges on being specific and accountable. When you decide to pursue a goal, your chances of success fall somewhere between 10% and 25%. By sharing your goal with someone you care about, you raise the likelihood to 65%. And when you ask that person to meet with you on a regular basis to check in, your probability of success skyrockets to 95%.
By working with us at Nordens, we provide that accountability buddy and regularly check in with you to see if you’re on track with the targets you’ve set yourself. It’s really hard when everything is left solely down to you and sometimes it needs someone else to see the bigger picture from an unemotional viewpoint and offer invaluable help. The combination of the SMART breakdown as well as tailored support to assist you is a winning formula in my book and something which I regularly advocate for no matter what level in business you are.
We’re here to help at Nordens!
We hope this has outlined to you the importance of goal setting in business, and how the SMART criteria can really help. At Nordens, we value clear communication, expert advice, and genuine partnerships. If you’re thinking of hiring an accounting firm that truly understands your needs and offers tailored solutions, we’re here to answer all your questions.
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