A new year is only a few days away — are you and your business ready? As 2023 approaches, all business leaders should prepare a plan for what they hope to accomplish before the year ends. A skill that every entrepreneur needs to have is setting SMART goals. Examples in this article will help you understand how to get started and craft the best milestones for your business.
What Makes a Goal SMART?
Consultant George T. Doran first invented SMART goals in 1981. SMART is an acronym, and Doran wanted to help managers create better goals by making them specific, measurable, achievable, relevant, and time-bound. (Some descriptions of SMART goals change the individual words in the acronym, but the basic concept remains the same.)
Doran intended his creation as an antidote to vague goals that leave people unmotivated, confused about where to start, and unsure of when they’ve found success. To understand why SMART goals differ, let’s break down the idea behind each letter in the acronym.
Specific: A goal must be specific so it is clear, or you won’t know what you’re trying to accomplish. To create a specific goal, answer the five W questions: What, when, where, who, and why?
Measurable: Adding numbers to your goal is crucial. Specific metrics hold us accountable and allow us to track our progress. “Improve customer satisfaction” is not measurable, but “increase customer survey scores by 10% in the first quarter” is.
Achievable: You want to be the biggest name in your industry. While it’s a worthy goal, seeing it happen within a year is probably unrealistic. Achievable goals should challenge you but not promote a culture of failure by being nearly impossible to complete.
Relevant: If a goal does not apply to your business ambitions, it will not do your company any favors. Create a plan that aligns with your overall vision and draws upon the more vague goal you started with.
Time-Bound: Failing to create a time frame for our goals lets us off the hook. We can’t be accountable to our goals because, with no end date in sight, we can always do them “later.” We also tend to expand projects to fill the time we have, and we frequently fall into paralyzing perfectionism when we don’t have a deadline.
Putting It All Together
It’s now probably easier to see why many goals we set for ourselves fall short. For example, take a typical New Year’s resolution. We often pledge to “exercise more” without clarifying what that really means. How much exercise is enough, and how will we know when we’ve met the goal? We probably agree that exercising one more time in 2023 is not sufficient — but what is? Not understanding our goal or how to measure it makes it easier to give up.
On the other hand, we too often set unrealistic goals. Instead of pledging to exercise more, we decide we’ll go for a run every day. When we inevitably miss a day, we feel like failures. The same thing happens in business. While increasing revenue is a good goal, planning to grow annual profits from $100,000 to $1 million in one year will create disappointment for almost every business.
Try to be reflective and critical yet realistic when setting SMART goals. Examples included below will help you understand where to start.
Let’s start with a simple example by going back to one of the most common New Year’s resolutions: “Exercise more.” By now, you should understand why this goal doesn’t meet the SMART criteria. But what does? One option would be “run two times every week.”
This goal is specific, assigning a specific target. We all understand what a week looks like, making the goal highly measurable. The goal is achievable by allowing some flexibility (since the goal does not specify the days of the week you must run) and using a reasonable number. It’s also relevant to the goal of exercising more and creates a sense of time-bound urgency by creating a loose schedule.
Every business wants to increase sales — but increasing sales is not a SMART goal. It doesn’t tell us the improvement we’re aiming for, provide a deadline, or explain how we might achieve success.
A better goal would be, “I will increase my sales by 50% in 2023 by investing one-third of my revenue in advertising.” This goal is specific because it incorporates precise numbers, making it easily measurable. Investing the additional money and taking on more work is also achievable for a company with sufficient resources and staffing. Finally, the goal is relevant to increasing sales and growing the business and provides a finish date by the end of the year.
Your business lives and dies by customer satisfaction, but how do you know when your customers are happy? One of the best ways is to implement a customer satisfaction survey where you can receive all feedback, good and bad. So, if you want to make your customer interactions more positive, a SMART goal that meets every criterion would be implementing a customer satisfaction survey for your business within one month.
The goal can become even more relevant once you build off it. After implementing the survey, you can create a secondary SMART goal of receiving 10 completed surveys every month by the end of the second quarter by promoting it at the bottom of every receipt and mentioning it verbally to customers. And then, once you have a baseline of customer satisfaction, you can start building even more SMART goals, like improving your average rating from 3 to 4 stars by the end of the year through additional employee training.
Remember that the above examples are for illustrative purposes only. A SMART goal tailored to someone else’s business isn’t smart. For a start, what’s achievable for one business will not be for another. When setting SMART goals, examples of best practices include:
- Considering the unique circumstances of your business
- Determining how you will measure success in advance
- Creating a time frame that is both challenging but realistic
What will your SMART goals be for 2023? The options are endless, but if you’re struggling to think of the right area to start, the experts at Newsletter Pro always recommend working on your content marketing strategy. Our Content Marketing Guide will give you the expertise you need to effectively craft and achieve your goals. Simply fill out the linked form to download your free copy today!