Tips to set your business goals for the new year

If you haven't already set your business goals for 2014, it is time to do so. Setting goals is important for any type of business. It provides you with a structured framework. Goals also help the company understand how it measures success, and whether it is meeting that standard. A business is likely to fail without clearly constructed business goals.

The goal of goals
Whether short or long-term, goals provide a clear understanding of what the company strives to accomplish. Setting short-term goals to reach related long-term goals is a key to success for most any business. Thinking of short-term goals as “stops along the way” to large goals can compartmentalize processes without losing sight of the big picture. Having goals gives everyday tasks more meaning and clarifies the reasoning behind company decisions.

Setting realistic and achievable goals helps a business in the following ways:

Motivates the workforce. Setting goals helps your employees understand what is expected from them. Firm goals help maintain a consistent level of motivation and help employees improve their performance to achieve goals.

Attracts new clients. Specific goals will assure the clients they will benefit from working with the company. The same goal-setting method plays a key role in cementing the client-company relationship.

Helps stakeholders. The investors, shareholders and lenders form an intrinsic part of the company. Such external forces invest in a particular company only after understanding the short-term and long-term business goals of the company. Setting goals helps these stakeholders make better decisions about the company.

Aids performance evaluations. The performance of the employees can be evaluated by calculating their contribution in helping the company realize its goals. Goal setting helps the employees to create benchmarks and targets to achieve on an annual basis or during their tenure in the company. It provides them with a direction, and they can put in the required efforts to achieve their individual goals.

Meet financial targets. Sales form an intrinsic part of any business set-up and business goals. Well-structured business goals help the company to gauge the efforts that need to be put in to meet the sales target. Other details, such as the profit margin can also be accurately estimated with proper business goals.

Below are some tips in helping you get started:

Schedule time to work on setting your financial goals.

Financial planning is critical to your business, so dedicate adequate time to completing it. Use that time to consider seriously where you want your business to go and how you plan to get there.

Set specific and measurable Goals.

In setting goals, it is important to be as specific as you can. You know your business better than anyone and you know what your people can achieve. You are also the only one who knows what is the most important to you.

The goals should be within the reach of your company and be achievable as well as realistic. Don't make your goals too easy. If you set easy goals, such as to maintain expenses at the previous year's level, or increase sales by a modest 2%, you may achieve those goals but fail to satisfy yourself. Worse than that, by failing to commit to real growth you will give your competitors the edge.

The more specific and more measurable your goals, the easier it will be to communicate them and to acknowledge them when you reach them. For example, if your goal is simply “to increase sales” how can you tell if you are really succeeding? If your January sales figures exceed those of last year, have you truly met your goal or do the figures reflect some other variable in the marketplace, such as weather? You may also find that one month sales are up and the next month they are down. In short, the goal is too vague.

On the other hand, if your goal is “to increase for each region by at least 5% per quarter and 7% by year-end,” you have something that is clearly measurable. You can continually track your progress and push yourself to success.

Review the goals with your staff.

Explain how you plan to accomplish the goals you developed. Write step-by-step instructions for your business on how these goals will be met. Don't forget to add a timeline — define exactly when you will accomplish each goal. Time-bound goals will also keep you motivated.

Share your progress and success.

Don't wait until a year has gone by to look at your goals and see how you did. Post your goals where you — and everyone else - can see them. Measure how you are doing at regular and pre-determined intervals. That way you can make adjustments when needed.

By following the above tips, when the following year rolls around you can sit back and bask in your successes, learn from your misses and set tougher challenges for the following years.

Cheryl O'Neill Gowen is president and CEO of Alternative Funding Options. She works with business owners seeking cash flow from non-traditional sources, drawing on more than 30 years' experience in banking, financing and staffing. Contact her at: [email protected].