How to set SMART goals for your small business

Whether it’s going to the gym more often or finally tackling that small business to-do you’ve been avoiding, we all have goals. But when it comes to setting small business goals, you’ve gotta think more than just smart; you’ve gotta think SMART. SMART goals for small business is a more effective way to write business goals—and accomplish them—that actually sets you and your business up for success. Never heard of the SMART goal-setting method? Don’t worry, we’ve got you covered. We’re breaking down everything you need to know about SMART goals. Plus, we’ve got some examples of SMART goals for small businesses to help you write goals with confidence.

What are SMART goals?

SMART is an acronym used for helping with goal setting. SMART goals are goals that are Specific, Measurable, Achievable, Relevant, and Time-bound. The SMART goal-setting method is designed to give you better results vs. simply setting a goal without any guidelines. We all love a good acronym, but this one also serves as a handy guide for forming an effective goal. Each letter is a criterion that your goal must meet. Together, they help you write a goal that has a clear objective and includes all the components necessary to set you up for success. So whether it’s a personal, professional, or even a team goal, use the SMART goal-setting method to be on your way to achieving your business targets in no time. First, let’s break down each of the criteria in detail.

1. Specific

A specific goal should be… well, specific. Put simply, it means including all the details you might need to help you reach your objective. Goals that aren’t specific tend to raise a lot of questions. For example, “Grow my business” is a goal, but it’s not specific. It’s vague and comes with a lot of follow-up questions for anyone involved in accomplishing it, like:

• How are you going to grow your business?
• Who is responsible for growing your business?
• By how much are you going to grow your business?

A goal that’s specific should cover the following:

• What you’re trying to achieve
• How you’re going to achieve it
• Who’s going to be involved
• Why the goal matters

Instead of “Grow my business”, add in specificity, like, “Increase produce sales by 17% through new marketing outreach.” This tells us what you want to achieve, how you’re going to do it, what team is involved, and adds in a unit of measurement… more on that below.

2. Measurable

Tackling goals takes a lot of time and effort. So if you’re going to dedicate resources, you should probably know when you’ve reached the finish line. Or at least if you’re on track. If committing to a concrete number feels scary, you’re not alone. Over 80% of small businesses don’t track their goals. But it’s a big part of setting you and your team up for success. You can fulfill the measurable criteria of a SMART goal in many different ways. The easiest is setting a quantity or specific amount you want to achieve. For example, you want to reach $100,000 in revenue or you want to grow your team to five people. But you can have goals that don’t have numeric targets. In those situations, you should still be able to easily determine what success looks like. For example, if you want to complete a training program or implement a software, the goal is measurable because you can confidently check off a box that says “done”.

3. Achievable

This is where you should gut-check if your goal is realistic or achievable. For example, if hitting your target will require all your employees to work overtime for the next two months, that might not be a realistic goal. It doesn’t mean you can’t be ambitious or even set stretch goals. But if a goal is unrealistic, it means you’re unlikely to achieve it. And setting a goal that’s out of reach isn’t motivating or helpful for propelling your business forward. If a goal doesn’t feel achievable, try breaking it down into bite-sized SMART goals so you can get one step closer to that big goal. (And hey, we all love crossing something off a list.)

4. Relevant

As a small business owner, you probably have a ton of great ideas. While we all want to do everything, it’s more than likely impossible. So it’s important to step back and make sure your goals play nice with the rest of your larger company vision. In other words, you need to make sure it’s relevant. An easy way to evaluate if your goal is relevant is to simply ask yourself, “Why am I doing this?”. If the why is unclear, it might be a sign that your goal isn’t relevant enough to be SMART. For instance, let’s say your mission is to become the number one hair salon in your city. In which case, opening a retail store in a different state probably isn’t a relevant goal. But opening a second location in your city? Now we’re talking.

5. Time-bound

We’ve all been there—we say we’ll do something but then it never happens. More often than not, it’s because it’s not time-bound. If there’s no deadline, it doesn’t feel urgent and continues to fall to the bottom of our priority list. Even if we know it’s important. This is especially true if you’re a busy business owner with a to-do list longer than a CVS receipt. So when setting a SMART goal, you should always include a reasonable timeline for when you plan to achieve your target. If you don’t end up hitting that deadline for some reason, it’s no big deal. But at least you’ll have a timeline to work towards. It also gives you a date for when it’s time to re-evaluate your goals.

Why are SMART goals important

Improving operational efficiency is a top of the priority list for small businesses and setting the right goals is an easy way to make sure you’re optimizing how you use your resources. Unlike any old goal, writing a SMART goal takes a little more thought and care. But we guarantee that it’s an extra step worth taking. Almost 90% of businesses fail to achieve their goals. And while achieving everything you set out to accomplish is unlikely, the SMART method helps you set goals with intention. It’s a tried and true formula that equips you with everything you need, so you’re more likely to achieve your goals. Of course, no one can do it all alone. As a small business owner, you also likely need the support of your employees to make your goals come to life. Not only does the SMART method help you clearly articulate your plans, but it makes it easier to communicate them with your team. By increasing transparency, the entire team knows what they’re working toward and why.SMART Employee development: SMART goals aren’t just for your small business. You can use them with your team as well. Employees who set goals are 6.5 times more likely to recommend their organization as a great place to work.Offering earning and growth opportunities are a proven way to boost employee engagement and satisfaction. Whether it’s leveling up their day-to-day work or creating a career path, taking the time to goal-set with your team can help them be their best selves at work.Even better? Align their goals with larger company SMART goals. It gives your employees purpose and helps them understand why their work matters. Employees who know how their goals connect to business are 10.1 times more likely to be motivated at work.

How to set SMART goals for your small business

Goal-setting for your small business isn’t something you should just do once a year. Rather, it’s something you should be doing regularly to make sure you’re constantly working on the things that matter. So whether it’s your first time goal setting for your business or you need to take a moment to reset your objectives, the SMART goal method is a great way to keep you on track and help you set better goals. Here’s a step-by-step for how to set business goals using the SMART method.

1. Determine the area of opportunity

Before you can set a goal, you need to narrow down the most important areas of focus for your business. A good place to start is by identifying a problem that you’re hoping to solve for. Problems aren’t necessarily bad things, they’re just areas where there’s room for improvement. Some examples of areas of opportunity for a small business might include:

• Reducing the amount of time your employees waste at work
• Hiring more employees to meet customer demand
• Setting up a time tracking system to get a better understanding of your labor costs.

If you’re not sure where to start, a prioritization method like the Eisenhower Matrix can help you surface tasks that are higher impact and more urgent.

2. Make sure your goal is SMART

Now that you know what you’re setting out to achieve, you need to make sure that how, when, and what you’re doing is clear. You can do this using the SMART method we covered earlier. As you’re writing out your goals, here are the five SMART questions you can ask to check if your goal is ready to go.

• Is it Specific? What are you trying to accomplish and how?
• Is it Measurable? How will you determine success and track your progress?
• Is it Achievable? Is the goal reasonable and realistic?
• Is it Relevant? How does the goal ladder up to your overall business objectives?
• Is it Time-Bound? When do you plan to reach your goal?

Once the answer to all these questions is a resounding yes, you have yourself a SMART goal.Put it in writing: Writing down your goals is a great way to make sure they’re SMART and communicate them with your team. But it also makes your goals more achievable. A study found that you’re 42% more likely to achieve your goals if you write them down. So grab your favorite pen and start writing!

3. Put a plan in place

Now that you have a solid SMART goal to guide you, it’s time to create a plan of action. A SMART goal is detailed but usually doesn’t cover everything you need to get to the finish line. That’s where your action plan comes in. As you start putting a plan in place, you should start to have answers to the following questions.

• What resources or tools do you need to achieve your goals?
• Are there any blockers that prevent you from getting started?
• What key steps or milestones will you need to hit along the way?
• Do you have the data points necessary to track and measure your goal?
• Are there any potential risks or challenges that you’ll face?

Your plan doubles as a roadmap toward achieving your objective. Without a clear, organized plan, it’s easy to find yourself feeling lost or missing important steps along the way—which can derail your goals.

4. Take action

Now that the planning is done, it’s finally time to start doing. Depending on the scope of your goal, this step could take anywhere from a few days to several months. As you start checking to-dos off your plan, check back on your SMART goal every once in a while to make sure you’re still on track. This will help you make adjustments if necessary.

5. Celebrate

By now, we know how important it is to show appreciation for your employees. But don’t forget yourself! No matter how big or small your goal is, take a moment to celebrate getting to the finish line. And since there’s a good chance you didn’t get there alone, take a moment to thank your staff. For small goals, a quick shout-out in a team communication app is perfect, so everyone sees it. For larger ones, boost morale with a free lunch or even a nice thank you card. If you didn’t quite meet your target, that’s totally fine. When you set a SMART goal, you laid a solid foundation. Even if things didn’t go as planned, you’ve made progress that puts you ahead of where you started. And that’s worth celebrating too!

6. Review and re-evaluate

One of the benefits of setting time-bound goals is that you have a built-in review period based on the timeline you set. It prevents you from procrastinating on or sitting on a goal forever. When the timeline or deadline on your goal lapses, it’s time to review. If you smashed your goal—amazing! Go back to Step 1 and set your next SMART goal. But if you came up short—all good. Take the time to evaluate and understand what didn’t go as expected. Maybe the goal wasn’t as SMART as you initially thought. Or you ran into a road bump that derailed your plans. That’s the great thing about goals. They don’t have to be set in stone, priorities can change and it’s okay to readjust them if necessary.

Examples of SMART goals in action

Setting SMART goals makes sense in theory. But what does it look like in action? Let’s look at a few examples of strong business goals and what makes them SMART—so you can start writing better goals.

Hiring more employees

“Hire three more employees with customer service experience by the end of the year using Homebase’s Hiring and Onboarding platform. This will help us expand our store hours.” What makes this goal SMART?

• Specific: You’re specifically searching for candidates with customer service experience, and you plan to do it by using Homebase’s hiring and onboarding platform.
• Measurable: You know you’ve achieved success when three employees are hired.
• Achievable: There are still six months left in the year, and in the past, it’s taken one to two months to hire a new employee, so you know this goal is realistic.
• Relevant: You want to improve the customer experience by hiring more employees so you can expand your hours.
• Time-bound: You plan to complete your goal by a specific date, the end of the year.

Reducing overtime labor costs

“Reduce employee overtime costs by implementing a time clock to accurately track employee hours in the next 30 days.” What makes this goal SMART?

• Specific: You’re specifically reducing overtime time costs by implementing a time clock.
• Measurable: You’ll know you’re successful when you’ve implemented a time-tracking system that your employees are using regularly.
• Achievable: A free digital online time clock can be implemented in as little as a few hours. Research shows that time clocking can help reduce overtime. So you know this goal is very achievable.
• Relevant: Employee wages are one of the biggest expenses for small businesses, and overtime often costs more than regular hours. So reducing overtime will help you optimize your labor costs.
• Time-bound: You plan to implement a time-tracking system in 30 days.

Reduce the amount of time spent on payroll

“Reduce the amount of time management spends running payroll by implementing a payroll software that automates timesheets and wage calculations this quarter.” What makes it SMART?

• Specific: You’re specifically tackling the time it takes to run payroll by setting up a software that automates timesheets and calculates wages.
• Measurable: You know you’re successful when you’ve run your first payroll using your new software.
• Achievable: You know that most small business payroll software is relatively simple to onboard. But giving yourself the entire quarter gives you time to evaluate your options and find the best payroll software for your small business.
• Relevant: If you have hourly employees, or employees at all, you need to pay them. By reducing the time it takes to run payroll, you can free up more time to work on other business goals.
• Time-bound: You’ve set a timeline of three months (or a quarter) to complete your goal.

Ready to reach your SMART goals?

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Small business SMART goals FAQs

What is a SMART goal?

A SMART goal meets the five criteria of the SMART goal-setting method. The acronym SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. This list of criteria helps you define your objectives clearly. It also helps ensure you have all the components to help you to successfully achieve your goals.

Why should you set SMART goals for your small business?

You should set SMART goals for your small business because they help you set your goals with intention. Rather than picking arbitrary goals, the SMART method ensures that you’re focusing on the things that matter. SMART goals are also well-defined and attainable, so you know you’re setting yourself up for success.

How do you set business goals using the SMART method?

Here are the steps for how you can set business goals using the SMART method.

1. Determine your business objective.
2. Take the objective and make it SMART. (Specific, Measurable, Achievable, Relevant, Time-Bound)
3. Create a plan to tackle your SMART goal.
4. Put that plan into action.
5. Track your progress along the way.

By using the SMART method to set business goals, you can feel confident that you’re choosing goals that you’re likely to achieve.

How do you write SMART goals for a small business?

When writing business goals using the SMART goal-setting method, you should make sure that your goal meets all five components. The acronym is designed to help guide you through the process. Here are the 5 criteria you’ll need to cover while you’re writing your SMART business goal:

• Specific: What are you trying to accomplish and how?
• Measurable: How will you determine success and track your progress?
• Achievable: Is the goal realistic?
• Relevant: How does the goal ladder up to your overall business objectives?
• Time-Bound: When do you plan to reach your goal?

When writing your small business goal, you can answer all the questions separately or phrase them together. As long as you meet all five components, you have a SMART goal.