Come the end of a calendar year, it’s forgivable that many are thinking more about where to go fishing or what jobs on the house need doing over the summer break - and less about setting plans for their business in the new year. And we completely appreciate that. Setting goals is best done in the freshness of a new year after a recharge - but goals should be set as early as possible, giving the business as much time as possible to achieve them over the 12 months.
Many businesses work in financial years with their goals - that’s also a great idea as budgets and activities align. But coming back from the summer break with new goals to set is still a great time to do this as well. In this article, we take a closer look at the practice of setting new year’s business resolutions or goals.
Why setting goals is important
A business without clear goals runs a high risk of spending time and money in the wrong places. Without a north star, every function of a business can become inefficient and misdirected.
With goals in place, and reinforced, the day to day activities of everyone in the business can be guided by these objectives. They’re also a brilliant tool for speeding up decision making - i.e. does x activity help us get towards our goals?
Goals will also inform budgets, hiring decisions, new processes, sales strategies and supplier relationships. There doesn’t need to be dozens of goals worked on at once; fewer goals on biggest priorities is often a better way of achieving progress.
Reflect on the past year first
Don’t start setting new goals until you’ve both reviewed the progress against previously-set goals, and done proper reflection on the (calendar) year that was. Retrospective discussions are familiar to those in the project management space, but any business owner should set time aside with their leadership team or even solo to capture what happened in the past 12 months.
Some examples of reflections are:
- How did we perform against our forecast?
- Where did we have big wins with products, services or new customers?
- Did we have any people or culture challenges or successes? Why?
- What happened in our market broadly and how did it impact our performance?
- Have there been any services or products that have not performed well, or struggled to generate good margin?
- What did we try that didn’t work and we should avoid next year?
- What experiments did work and what’s the next logical step to rolling that out permanently?
- How did our leadership group perform and communicate?
- How well were processes and best practices followed?
The reflections will depend greatly on the nature of your business but do put aside the time to capture your thoughts here. There may just be one or two nuggets of gold that can help your forward planning.
Where are the areas of improvement? Start here first
Once you’re into goal setting for the new year, start with identifying your core business functions. The bread and butter of your business is its products or services and the functions that support that such as finance, sales, marketing, and so on. Much like a home with shaky foundations is not worth adding a second floor onto until they’re fixed, a business should avoid making grand plans before the nuts and bolts are tight.
That means you should identify any problems across your core business functions. Prioritise fixing these so they are no longer an issue or minor enough to be managed without great detriment to the rest of the business.
How are your goals supporting the long term business strategy?
Now as you’re building out goals, you’ll want to consider the future state of the business? Think about where this ship needs to sail towards to get your outcome down the track - whether that’s being in more regions, a revenue growth figure, or even getting towards sale of the business.
Looking ahead to the long term strategy of your business is a vital reference point when setting the year’s objectives. Each of your activities should be inching the business closer towards strategic outcomes.
If you’ve not yet got a business strategy that speaks to long term goals in 2, 3, 5 and 10 year terms, you may want to think about putting this together first. If you need help with setting a business strategy, RightWay can help. 
Splitting your goals into categories
As you start to jot down your goals for the new year, you may notice certain themes appear that help you group some goals together. The groupings could be reflective of different parts of the business, or it could resemble categories by customer type. But following on from above, you might find the most benefit in labelling your goals against strategic goals. Examples could be:
- Social and environmental responsibility
- Maximising gross profit
- Regional expansion
- Streamlining processes
- Becoming the leading brand in market
- The most desired employer in our industry
Under these categories could be any number of goals that help drive progress in that area. This can also be useful for reporting and governance if your business has a board.
SMART - a handy way to break down each goal
SMART is a popular acronym for Specific, Measurable, Achievable, Relevant, Time-bound. This framework is helpful to put any potential goal through checks before the business commits to it. If it doesn’t satisfy these criteria, it may not be the highest priority right now for a goal.
Specific - the goal needs to be very clearly articulated - what exactly needs to happen for this goal to be achieved, by whom, where and how. Without this information, a goal can struggle to gain traction.
Measurable - some goals are easier to quantify than others. But most goals can still have milestones and elements to them that are measurable. That could be as black and white as a revenue $ figure, or simply a new process being implemented and used.
Achievable - we’re right behind business owners with big aspirations for their business. After all, that’s part of what makes running a business exciting - the potential. With that said, the goals you set should be realistic. A business that dreams big but falls short every time will struggle to be successful. You may want to have a mixture of very-achievable goals and objectives that stretch the team a bit, too.
Relevant - It might seem obvious, but goals should all work with each other and actually have connection to your business’ strategy. In some businesses, goals can be introduced but not a clear tie to what the business wants to achieve long term. It’s important to call these out if they’re in play now, but also to avoid any new goals not passing the relevancy check.
Time-bound - goals without dates and deadlines rarely get achieved in a timely fashion. As business goals are often longer-term and sit alongside the busy day-to-day activities, it’s important to give them due dates so resources can be allocated to them properly. Otherwise they’ll just be deprioritised!
Including the team in your goals
As a business owner, you’re in the driver's seat ultimately - but that doesn’t mean you shouldn’t listen to your co-pilots. The insight you can get from working with your leaders and even broader team in goal setting can be invaluable. You’ll have a certain perspective but your goals can end up far more considered and well-rounded by getting input from your team.
There’s another good reason to make goal setting a group-contributed activity. When the team is part of identifying and setting goals for the new year, they can become more invested in it. It’s also good for keeping the team connected during meetings and updates as they’ll have full context behind why the business is focusing on certain things.
Establishing reporting and accountability
Before the hard graft gets underway, each goal needs to be captured in a tool or spreadsheet with clear milestones and accountabilities. Most goals will need multiple people involved to achieve at different milestones, but having an owner that’s responsible for overseeing the goal being delivered helps prevent the ball being dropped.
Avoid trying to do too much at once
You may plan out many goals that are all valuable to the business. But don’t make the mistake of trying to get everything done at once. A year isn’t much time in a business, so put the odds in your favour by prioritising the right goals first.
It may even be helpful to map out the order of goals, based on which changes or improvements will make subsequent goals easier to achieve. By focusing on just a handful of things at once, you might even be able to achieve more over the year, as goals are met faster.
Need help planning your next year of business growth?
Getting an expert, outside eye across your business plans can really help. Our team of business partners have worked with countless business owners to set out ambitious but realistic goals and help build a plan to get there. Give us a ring on 0800 555 024 or fill out our contact form to chat more.
