April is an important month for business owners: It marks the beginning of the second quarter and includes the annual tax deadline. While your business’s accountant takes care of your tax returns, you as the business owner should take time to analyze how the year is going so far for your business. This includes assessing the progress you’ve made over the first quarter, evaluating employee performance and identifying opportunities to improve. [Learn what a good performance management process looks like.]
The first quarter of the year, known as Q1, can impact the entire year for your business, so it’s vital to take this reflection exercise seriously.
Why goal setting is important
Setting goals is a crucial part of building and maintaining a successful business. When you set business goals, you and your team actively work toward clear targets. Goals keep everyone on the same page and can boost morale.
You may wonder which types of goals you should set for maximum success. One accessible goal-setting framework is the SMART method:
- Specific, with as much detail as possible
- Measurable, allowing you to track your progress
- Achievable for a team with its available resources
- Realistic and attainable
- Time-bound with a deadline range
The more specific your goals are, the easier you and your team can strategize tactics to accomplish them. With quarterly goals, organize them so they build upon each other and can lead to accomplishing larger annual goals.
Tip: Check out our guide to setting better business goals to make sure your company is on the right track.
How Q1 impacts your business’s whole year
The first quarter of the year can either be the driving force behind your business’s success or lead to a slow downfall for the rest of the year. It’s crucial to take stock of progress and metrics in Q1 to see how your company can improve weak spots and continue successful tactics in the next quarter. Q1 impacts your whole year for the following reasons:
- You can launch, relaunch or change certain aspects of the business with little pushback. New years help employees welcome fresh starts. Mid-January is an optimal time to make changes that could set the company’s pace for the rest of the year; it gives employees time to readjust from holiday breaks and a fresh perspective for the new year’s goals.
- You can start performance improvement plans for employees by mapping out key performance indicators (KPIs) for the year and work toward professional development goals for the following months. KPIs can measure performance each quarter, with Q1 setting the stage.
As the saying goes, “If you fail to plan, you are planning to fail.” Businesses that don’t set goals in the first quarter of the year aren’t setting themselves up for success. It’s much harder to embark on and accomplish time-sensitive initiatives when you’ve already wasted the first three months of the year. But if you do wisely set quarterly and annual goals for your company, it’s just as critical to evaluate them over time to ensure you’re on the path to success.
How to reflect on Q1
Here are three ways to take stock of how your business fared during Q1 so you can continue marching toward completing your company’s goals in Q2:
Which goals and metrics did you hit in Q1?
Q1 provides the foundation on which to base the rest of the year. By assessing each quarter individually, you’re creating short-term objectives that will feed into your overall strategy for your business. To ensure you’re on the right path, it’s vital to set aside time in April to review the goals you set in January.
Some key metrics you should keep an eye on are sales revenue, gross and profit margins, overhead costs, and monthly profits or losses. Your small business should have very specific goals, based on your industry and size, to meet these metrics. You may also have less data-driven goals, like implementing a successful hiring process or improving your brand reputation.
At the end of Q1, evaluate the goals you set, and determine which ones have been reached and which ones haven’t. Commend your team members for their excellent work on meeting these goals, or develop tactical performance plans to alter course immediately if goals were not met. For some objectives that were easily met, it may be time to be more ambitious and revise current goals to be larger in scope. For others, you’ll need to identify which factors led to not meeting your goals.
Q1 is a great time to use data and employee performance records to see if your team is producing actual results. If the results aren’t there, you’ll need to adapt and make improvements now; don’t assume you’ll catch up in Q2. Make a plan to regain lost ground and keep progressing.
Did you know? There are plenty of easy-to-use software tools to help you set and track business goals.
Which goals and metrics did you fall short of in Q1?
Most small businesses start the year excited and determined to kick off new projects and embark on challenging goals. However, it is perfectly normal to fall short of the high expectations presented in the first quarter. Just don’t let that discourage you or keep you from taking a realistic look at where business is now and where it needs to go to improve.
After identifying the Q1 goals that were not reached, determine why your company did not meet them. Possible reasons could be that the goals were unrealistically high, there was a lack of communication on the implementation plans or there was an unexpected incident causing a loss of business. Whatever the reason for not reaching your goals, it is essential to make corrections and move forward. Management and staffers should be encouraged to offer suggestions for improvement and new methods to reach the company’s goals. [Perhaps poor coworking relationships are to blame for missed goals. Find out how to improve relations between your managers and employees.]
If your business results from Q1 don’t align with your projected goals, consider how you can change the way things are happening and embrace a different approach to achieve different results in Q2. After all, insanity is often defined as doing the same thing over and over and expecting different results. So the only way you’ll reverse failure is to make a change. You might have to get a little uncomfortable by trying new technology, new approaches or new ideas to achieve this.
Bottom Line: After you’ve identified why your business fell short of its Q1 goals, brainstorm ways to approach the goals differently rather than repeating past mistakes.
How are you committed to making Q2 better?
After you devise specific tactics to better reach your goals, get all of the business’s stakeholders to commit to adhering to the updated plans. These leaders should then communicate the plans to the rest of the staff. Set deadlines for new and continuing objectives; meeting weekly will help keep everyone updated on progress and notified of any potential issues. Discuss how new developments will be implemented, and emphasize the importance of committing to your company’s revised goals.
It is crucial that all team members are aware of the company’s updated goals so that they know where the marks were previously missed and are motivated to do better. It’s especially important to loop in employees whose performance may have contributed to missed targets. Getting the whole team in on the journey to make Q2 better can benefit employee engagement.
Tip: If all or part of your team works from home, your remote employees could feel disengaged and isolated from the wider team.
Today, employees want to be valued and fully integrated members of the team, so ensure you’re allowing each person an opportunity to be a stakeholder in your quarterly success. Q2 is a new quarter and represents a fresh beginning to achieve new and continuing objectives, so don’t miss out on this important chance to amend your annual plan to meet your desired progress. Then make sure you repeat this reflection exercise when Q2 ends so that you can stay on the right path in Q3.
Adam Toren contributed to the writing and research in this article.