Establishing goals is an important aspect of managing a successful business. To develop useful goals, businesses need to step back from day-to-day business operations and plan out short-term, mid-term and long-term company goals. A lot of small business counseling focuses on start-up planning and short term objectives, however, the key to successful long-term business growth is establishing defined short-, mid- and long-term goals. Creating, maintaining and updating these ambitions is an exercise that should be practiced continually through the life of the business. Many business owners struggle to define goals because they are not sure of what makes a functional goal, and their objectives are often either too vague – “make money” – or too unrealistic – “make billions of dollars”. Goals should be realistic, specific and fact-based action tasks. For example, “increase sales by 5% in Quarter 2”. Good objectives are usually attainable tasks based on profit, productivity or direct growth.
Often, goals are confused with an organization’s responsibilities or daydreams. Responsibilities are the workings of the business that must be completed to maintain normal daily business function. Daydreams are aspirational visions. They’re good for a business to have and are often a good source of entrepreneurial spirit. However, having too many daydreams and not enough attainable goals can lead to inactivity and disappointment and can eventually lead to business failure.
Short-term goals are more easily accomplished and can be completed quickly. They should take anywhere from a few weeks to a few months. For new businesses, these are typically simple things like setting up an email account or returning networking calls. For more established businesses, short-term goals could be to update an existing business practice or something that creates a small profit bump like a big sale or a networking event.
Mid-term goals take longer and are more difficult to accomplish. These tasks can take from several months to a couple of years to complete. They also tend to have a much greater impact on business function. For a new business, this might be hiring a first employee. For more established businesses, a mid-term goal could be adding a new product to your offerings.
Long-term goals are things that take several years to fully realize and usually go beyond basic business functions. This is where the business owner(s) look beyond the business as it exists today. A long-term goal could be centered on growth, exit, succession or legacy building. New businesses frequently struggle with long term goals because it’s hard to visualize far enough ahead before a business is fully established. In this case, long-term planning might involve thinking about paying off loans, adding partners or reaching a certain profit margin. For established businesses, long-term planning goals should focus on what happens next and should include retirement planning, exit strategies and succession planning.
Goal-making is an active process, and a company’s goals should be constantly evolving. You may find your business growing or changing in ways that you never anticipated. As your business evolves, some of the mid and long-term objectives you had before may no longer make sense. In this case, you’ll need to revisit those aims and let them change with your business. Short-term goals should be redefined as the previous goals are completed.
Setting short-, mid- and long-term goals is an important activity for business owners. It requires business owners to stop and think about where they want the business to go and how the business will need to evolve to meet future realities of the business climate and the owner’s lives. If you’d like to learn more about setting business goals, the Cayuga Economic Development Agency (CEDA) and Auburn SCORE are hosting a workshop, “Defining Business Goals”, on Wednesday, March 4th from 3:30 – 5:30 at 2 State Street in Auburn. Click here for more information about this workshop and to register.