Tips for Setting SMART Goals in Your Business Plan

What are SMART goals?

SMART goals are goals that fit the criteria indicated by the SMART acronym: specific, measurable, attainable, relevant and time-based. The SMART goals framework is a way to stay on target and achieve your goals more systematically. 

The process includes the following components:

• Making your goal specific
• Quantifying your goal 
• Ensuring your goal is attainable, reasonable and realistic
• Tying your goal to a deadline

An example of a SMART goal is to add 600 followers to your Instagram business account within 90 days.

How to incorporate SMART goals into your business plan

Here’s a look at each SMART goal element, along with implementation examples you can apply to your business. 

1. Make goals specific.

A specific goal states clearly what will be achieved, by whom, where and when (and sometimes why).

Let’s say you’re a wedding planner. Here’s how a non-SMART goal compares to a SMART goal in terms of specificity:

• Non-SMART goal: Market my business in Toronto.
• SMART goal: Start a monthly networking group on event planning in Toronto. Set a monthly attendance goal of 20 people, with two attendees per month signing up for my “How to plan your wedding without stress” workshop.

2. Make goals measurable.

Measuring your goal means tracking the results and milestones you must hit along the way. When you measure, you assess whether you’re on the right track to achieve your goal by asking these questions:

• How much?
• How often?
• How many?

Here’s how a non-SMART goal compares to a SMART goal in terms of measurability:

• Non-SMART goal: Increase sales.
• SMART goal: Increase sales by an average of $8,000 per month for the next year.

Delving deeper, say your goal is to increase sales by $96,000 per year. To measure your progress, you could take the following actions:

• Set a milestone target of $8,000 in sales each month. 
• Create a process that focuses on achieving $8,000 per month (adding up to $96,000 for the year). 
• Check your sales totals monthly to see whether you’re reaching your goal. 

Measuring draws your focus, helping you boost your odds of achieving your goal. One good way to track progress is to use a dashboard arranged by month. You could, for example, use a chart like this:

3. Make goals attainable.

Ensure that your goals are achievable. If you believe you can reach the goal, you’ll be more likely to do so. Setting unreachable goals is a mistake, because you set yourself up for failure.

What’s attainable for your business depends on your abilities and resources. Building a new factory from the ground up may be achievable for a large corporation, but it’s likely out of reach for a very small company.

Here’s how a non-SMART goal compares to a SMART goal in terms of attainability:

• Non-SMART goal: Build and equip a 20,000-square-foot factory by the third quarter of this year.
• SMART goal: Find and sign a contract manufacturer to produce and deliver 75,000 units of Product A by the third quarter of this year.

Setting attainable goals is also essential for team goal-setting, and it can boost employee engagement. If you set unrealistic goals for your team, your team members won’t fully engage in the project. They need to be fully on board for the project to succeed. Everyone on the team should share in the goal-setting so they own the goal and know it’s attainable. 

4. Make goals relevant.

Goals tend to fall into two categories: short term and long term. It’s essential to understand how both types of goals are relevant to your organizational or personal vision, mission and purpose.

Consider a business that publishes textbooks. It may be tempting to pursue other, related business offshoots, doing so can take resources away from the profitable main business. 

Here’s how a non-SMART goal compares to a SMART goal in terms of relevancy:

• Non-SMART goal: Create a network of in-person tutoring centers in the 10 largest school districts in the United States.
• SMART goal: Market our teacher-companion textbooks to existing third-party in-person and virtual tutoring centers in the 10 largest school districts in the United States.

5. Make goals time-based.

Setting a deadline attaches a time frame to your goals. A deadline can be an excellent motivator. Let’s say you want to run a marathon in a year. A time-based goal would look something like this:

Set up a system to get marathon-ready in one year.

1. Run twice a week for three months, gradually increasing your distance.
2. Run three times a week for the next three months, continuing to increase distance.
3. Be ready for a half-marathon by the six-month mark.
4. Increase your frequency and distance over the following six months.
5. Be ready for the marathon in 12 months. 

Time-based goals help you avoid procrastination because your process offers incentives as you meet smaller achievements along the way. 

Here’s how a non-SMART social media marketing goal compares to a SMART goal in terms of being time-based:

• Non-SMART goal: Double our social media follower count and increase engagement on Instagram, TikTok and Facebook.
• SMART goal: Double our social media follower count and increase engagement by 20 percent on Instagram, TikTok and Facebook by Dec. 31.

Why use SMART goals?

SMART goals allow you to chart a course and stay organized when reaching personal or professional goals. You’re more likely to succeed because you’re less likely to get overwhelmed and abandon your goal entirely. 

In a business setting in particular, SMART goals provide teams with clarity, structure and direction. Here are a few reasons to use SMART goals in business.

• Setting specific goals provides accountability. Accountability helps ensure that goals are achieved. If your goal involves reducing customer complaints by a specific amount, for example, your customer-service manager should be the point person for the initiative and have some accountability for the goal’s success.
• Measurable goals help you refine strategies. When your goals are measurable, you can gauge your success — or how close you came to it. Tracking metrics and key performance indicators allows you to compare the efficacy of various strategies and use only the most successful ones in the future.
• Achievable goals boost morale. When you set achievable goals, employee morale increases and your team is less likely to experience employee burnout or frustration. Employees are set up for success, helping you build an empowered employee culture.
• Relevant goals propel company growth. Goals are useless if they don’t contribute to overall business success. Find goals that help move the organization forward. Relevant goals can include meeting financial metrics, such as increased profitability, and broader goals, such as reducing business expenses, limiting waste and increasing recycling.
• Time-based goals provide accountability and urgency. Goals with deadlines are extremely motivating. A timetable brings a goal to life. Achieving time-based goals allows you to set new goals after your initial ones are met.

With SMART goals, you and your team know what success entails and can measure it within a project’s framework. Everyone knows the steps they must take to achieve their goals. With ambiguity gone and a direction mapped, SMART goals set up your team for success.

How to identify and reach your business goals

It’s not enough to set a business goal — you must create and follow a well-thought-out process to help you achieve it. “I’ve seen countless businesses fail because they can’t translate strategy into execution,” said Shantanu Pandey, CEO of Tenet.

Follow these steps to make your business goals a reality. 

1. Identify your goal.

If you can’t seem to set a SMART goal, it’s usually because you need to clarify exactly what you want to accomplish within a set period. It’s inadvisable to skip the process of SMART goal-setting and just go for it. You have a greater chance of success when you analyze your goals and match them to your vision.

When implementing SMART goals, perform the following exercise to save time, prevent disappointment and avoid costly mistakes.

Exercise

What are your goals? Writing down your goals helps clarify your thinking. Try to stretch yourself both personally and professionally by setting three goals in each area.

• Personal goals:
  • Goal 1
  • Goal 2
  • Goal 3
• Business and career goals:
  • Goal 1
  • Goal 2
  • Goal 3

2. Determine what is reasonable. 

Because SMART goals are attainable and time-based, you must ensure that you set a reasonable goal. If, for example, your goal is to increase sales by 30 percent in a year but you’ve historically increased sales by only 10 percent annually, consider extending the period to two years or reducing the target to 15 percent for one year. That way, you’re improving on previous years without being overly ambitious.

Also examine the resources at your disposal. In the previous example, a 30 percent increase in one year may be attainable if you’ve just received a cash infusion that you can put toward marketing expenses. Or maybe you’ve recently made an acquisition or added to your sales team, making a once-ambitious goal more reasonable.

3. Focus on essential metrics. 

When ensuring that your goals are relevant, specific and measurable, carefully determine which metrics to use. You may, for example, want a better digital marketing ROI from your social media efforts. In that case, follower counts and engagement levels (likes, shares and comments) are appropriate metrics. If you have a relatively small number of followers, you may want to focus on follower counts. If you have many followers who don’t contribute to sales, you should focus on engagement metrics.

It’s not enough to mindlessly pursue your goal — you must keep the overall business benefit in mind. In the previous example, if you wanted to grow your followers on social media, you could buy followers and seemingly accomplish that goal. That wouldn’t improve your social media marketing ROI, though, because most of those people wouldn’t engage with your company or become paying customers.

4. Identify and implement tactics to meet your goal.

Once you’ve set a goal, develop a system to achieve it. Several tactics can help. 

• Focus on consistent progress: If you want to write a book in one year and you’re not an author, for example, you may feel overwhelmed. Instead, try writing 250 words per day. Don’t agonize over what you’re writing — just write. At that rate, if you write five days per week (260 days per year), you’ll have 65,000 words in a year — approximately a 250-page paperback. If your business wants to improve sales, focus on consistently generating 10 quotes per month with a 50 percent success rate.
• Add an element of accountability: Pandey recommends improving your chances of success by adding accountability to your SMART goals framework. “Every SMART goal must have a single accountable owner,” he said. “Ambiguous ownership kills execution faster than anything else.”
• Consider goal phases: Pandey also suggests breaking SMART goals into three phases: quick wins (two to four weeks), momentum builders (one to three months) and transformation targets (three to 12 months). “This creates psychological momentum that dramatically increases follow-through,” he said. 

Justin Abrams, founder and CEO of Aryo Consulting Group, said SMART goals can give goal-seekers a framework to hit their targets. “They prevent you from drifting aimlessly and ensure every step you take is purposeful,” he said. “But don’t forget to adapt when needed. With SMART, you get the best of both worlds: structure and the freedom to adjust when the road ahead changes.”