How to Set Business Goals & Inspire Your Team
Going from a self-employed or solopreneur career to hiring your first employees can be an exciting time.
Not only are you expanding your business enough to justify hiring someone (or many people), but you are also going to be determining the future growth of your business with you new team members.
However, no matter how experienced you are at being a manager or leader, you soon realize that without the appropriate small business goals, your employees may only be workers, instead of team members.
You want them to be as inspired and motivated as you are, and in order to do that you really need to work on your vision and goals.
For most small business owners, when they are working alone, they tend to keep their goals in their head, never really thinking they needed to write them down.
Now with extra people on the team, though, it is absolutely crucial that not only do you get these small business goals written out, but you need to make sure they are able to inspire your team and set your business on the right path.
That’s why today we’ll look at how you can set your small business goals to inspire and motivate your team.
I. Set your long-term visionary goals
One of the most important things to realize is that you actually have two types of goals: long-term goals and short-term goals.
Your long-term goals should be set for a timeframe of 3–5 years and they should state clearly your company’s mission statement. Here, you need to find a way to articulate the main reason that you started your company.
What is the core purpose of the company? What problem were you trying to solve, and whom were you solving it for?
It may seem daunting and even mysterious at the beginning, but once you start thinking of it, it becomes concrete.
When you think of your goals in these terms, they become a more natural summary of your business rather than a lofty and vague idea that will inspire no one in particular.
In general, there are four types of visionary small business goals:
1. Profit goals
Profit goals are any goals or set of goals that aim to increase profits by a specific percentage for a specified time period.
In order to determine how to set your profit goals, you should consider:
- your company’s fixed and variable costs
- your (the owner’s) annual income
- the company’s fixed and variable operating expense
- estimated returns on borrowed capital
- returns for risk
- returns for forecast future growth
- growth goals
By determining these, you can set your profit goals more accurately.
2. Service goals
Service goals aim to improve the satisfaction customers feel in your customer service, as well as significant improvements in customer retention.
The goals can include gaining new customers faster, making sales, solving customer problems and become more efficient in service calls.
3. Social goals
Social goals include philanthropic initiatives to constantly give back to the community. This includes through donations or volunteering.
The idea of corporate social responsibility is connected to social goals, as the business will focus some or a lot of its attention on helping others.
4. Growth goals
Growth goals are focused on consistently expanding the company. This can be achieved through the hiring of new employees, opening branches in various locations, and many other ways.
Setting growth goals, as with the other goals, will require you to be aware of your current financial and general business status in order to create and meet specific goals.
5. BHAG goals
There are actually more than just two types of goals. You could throw medium-term goals in there, as well as the legendary BHAG — the big, hairy, audacious goal that is pretty much: win or go home.
The BHAG (pronounced bee-hag) type of goals was first presented by James Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies.
In the book, they looked specifically at which types of goals produced the best results. When companies were willing to put it all on the line with their BHAGs, they found success.
One example is the Boeing Corporation, which put all of its resources in 1950 into becoming the dominant player in commercial aircraft. In fact, Boeing is currently working on its current BHAG, which is set to impact the aerospace maintenance, repair and overhaul (MRO) market.
Other popular BHAGs include (as shared by Rhythm Systems):
- Nike (1960s): “Crush Adidas”
- Walmart (1990): “Become a $125 billion company by the year 2000”
- Merck (1930s): “Transform the company from a chemical manufacturer into one of the preeminent drug-making companies in the world.”
6. Have specific, visionary, challenging goals
What this means is that it isn’t enough anymore to have moderate or vague goals. Your goals should be repeatable by everyone in your business in one or two sentences. Anything beyond that will most probably be vague, confusing, or not inspiring enough.
For example, Collins and Porras compared General Electric’s focused goal with Westinghouse’s.
- General Electric: “Become #1 or #2 in every market we serve and revolutionize this company to have the speed and agility of a small enterprise.”
- Westinghouse: “Total Quality; Market Leadership; Technology Driven; Global; Focused Growth; Diversified”
GE has two goals folded into its statement: to be in the top two spots in every market they’re involved in, as well as to make it as efficient as a small company.
Westinghouse’s goals are filled with vague and essentially meaningless buzzwords. It is not a sentence, it is not memorably, and it is definitely not inspiring.
Which company would you rather work for?
7. Make strong but flexible goals
One important thing to remember about these BHAGs or similar long-term goals is that you should always be focused but flexible enough to change along with the market.
For example, no matter what goals housing and construction companies had in 2007, by 2008 those changed dramatically due to the Great Recession.
You and your employees should be dedicated enough to focus on your long-term goal and go in with all your energy, but also smart enough to realize when it’s time to pivot or re-team to discuss changes to your long-term goals.
II. Set your short-term goals
The most important thing to realize about short-term goals is that they take the BHAGs or long-term small business goals and makes them manageable.
For example, if your BHAG is to lose 50 pounds by the end of the year, you’ll have to break that down into monthly goals, and even into weekly or daily goals.
This could include going to the gym on specific days, having a set number of calories, eating only certain types of food, investing in sports equipment, etc.
Without short-term small business goals, your long-term ones will simply be wishful thinking.
Specifically, you need to answer: how are you going to achieve your long-term goal?
In order to answer that, let’s turn to the popular SMART goal system, most commonly associated with Peter Drucker.
The SMART goals system has five aspects:
Your goals should not be vague, as explained above, neither for long-term or short-term. You should always have a specific figure in mind.
In our weight-loss example, the goal is not to just “lose weight,” but in fact to lose a very specific 50 pounds (BHAG) or 4 pounds per month.
You should be able to measure your progress. If you can’t measure it, how do you know how well you’re doing? If you just want to become “a better leader” (vague goal), how will you measure it?
Make sure your goal is measurable and assessable.
In our example, we can measure it by weighing ourselves. For a 50-pound loss in a year, that would be about 4 pounds each month, which comes to 1 per week. You can weigh yourself once a week to see how well you’re doing.
You need to make sure that your goals are not just specific and measurable, but also attainable, or realistic. If you’re thinking of hiring your first employee and your business is only two months old, it might be unrealistic to set your BHAG for $50 million in sales per year, which comes to a short-term goal of $4 million per month.
In our weight-loss example, something attainable is losing one pound per week. Losing three would be difficult and you’d just be setting yourself up for failure.
One important aspect is that your goal is relevant — in other words, it is related directly to your core business. For example, Boeing’s past and present BHAGs are very specific and related to their main business.
However, if my BHAG is to lose 50 pounds, and I my short-term goal is to set up a food blog, it wouldn’t be relevant to my main goal. In a real world example, many small businesses are aiming to increase their blog visitors, but they should instead be focused on getting better leads and higher conversions.
If you lose focus of your main goal, you’ll end up pursuing unrelated goals.
You also need your goals to have a timeframe. This will give you the necessary pressure to create tactical steps in attaining your main goal, through short-term, time-specific goals.
For example, if you are setting measurable goals, you are probably setting timely goals as well. In my example, 50 pounds in a year, 4 pounds in a month or 1 pound a week is a specific and timely.
Without that time factor, you are essentially giving yourself forever to do your short-term goal and therefore your BHAG, which makes it essentially meaningless.
III. Get your employees involved
One of the best ways to get your employees involved and inspired by your goals is to have them help you set some goals as well.
This may not be in setting your BHAG goals, as employees will still need their boss to be decisive. That means that as far as the direction of the company is concerned, you need to figure out your big goals by yourself or with other partners.
You should also not expect new employees to provide in-depth input, seeing as they may still be getting into the way of business and lack specific knowledge.
However, that doesn’t mean that you have to go at it alone when you’re setting your smaller goals.
You should be constantly getting feedback from your staff or management on key issues that affect them (especially since you may be a bit more removed from those tasks now that you’re not doing everything anymore).
By asking for employees to provide their input, you are asking for their expertise based on their experience. This is particularly useful for setting more specific and better short-term (and relevant long-term) goals.
These should also include employee-specific goals, as they should be working at getting better in one of many ways.
However, more importantly, according to one study, companies where employees were allowed to provide input had much better financial and operational results than others in the study.
This could be for the simple fact that those employees felt more engaged, motivated and inspired at work.
IV. Remain focused and consistent
If you’ve been following along, you may have realized that we’ve now got quite a few goals. There is one major, BHAG with accompanying short-term, SMART small business goals.
However, depending on the size of your business and your energy levels, you may have more than one major goal.
Not only do you want to increase your sales by 25% over last year, but you also want to increase customer satisfaction to 85% by end of year.
Those are logical, as many small business owners are determined to win at many things, and this passion helps push them forward.
However, you need to make sure that you stay focused.
More specifically, it means you need to cut away the big goals that aren’t necessary right now.
Tackling increase customer satisfaction and increased sales is challenging enough, but expanding the business by getting a second or third office as well as doubling your staff may be too much.
Instead, perhaps it is better to spread out your goals and do them one at a time (or, more realistically, two at a time).
In addition to that, you should always try to be consistent in working on your goals. Don’t just look at what your staff can do to, for example, increase customer satisfaction or sales.
Look at your entire business operations, including your software and other tools you use.
For example, no matter how great your content is and how awesome your social media strategy is, if your landing page is horrendous and your conversions are plain sad, your sales won’t be helped much at all.
Make sure all aspects, human and non-human are conforming to the main goal and doing their part.
When the team knows that each member of the team is working in unison, it provides good peer pressure and inspiration to work towards that goal.
V. Appreciate and reward your employees
Lastly, it is very important that you set appropriate steps not only for you and your employees to achieve the goals, but also for recognition, appreciation and optional rewards.
These may not always have to be of the financial variety. In fact, research has shown time and again that simple recognition is far more valuable to employees than financial rewards.
According to the study, 76% of respondents stated that praise from their praise was very or extremely motivating and 88% felt very or extremely motivated from praise from their managers.
This is important to remember on the mad dash to achieving goals. Employees are human, and a lot of how we operate is based on how good we feel about what we’re doing.
If you finish one goal on time or faster, you shouldn’t immediately dash to the next goal.
You should take a minute — or a few hours — and thank your employees, celebrating by bringing in symbolic donuts, pizza, healthy snacks, wine, or other symbolic foods or items.
This may of course just be a thank you (spoken or spoken and emailed) to let your employees know you recognize and appreciate them.
This is an extremely motivating aspect that can push your employees to work better and faster, to learn from their mistakes and add significantly to the company’s attempts.
If you don’t, you may find yourself with burned-out employees who are finding it hard to come up with reasons to go to work anymore. After all, employees leave managers, not companies.
VI. Your inspiring small business goals
These steps mentioned above are crucial to the longevity of your company. Not only that, but it will help to motivate your team to work harder, faster, better, stronger.
With the proper motivation, you’ll be able to inspire your employees (and yourself) to move closer and closer to achieving your goals.
Again, while having multiple goals is understandable for small businesses (that have a lot of “catching up” to do), it is best to be focused on your main-main goal, and have another that may be relegated to a “less-than-main” goal.
Having a lot of great ideas is fantastic; however, a lot of great ideas is asking for failure. Make sure you are focused enough to stay on the path towards that goal.
Let that goal reflect the core mission of your company, be SMART about the short-term goals, involve your employees and appreciate them regularly and you’ll be reaching your big, hairy audacious small business goals in due time.
Alla is one of the marketing spirits at InvoiceBerry, a simple online invoicing software that helps small businesses and freelancers. She loves social media and blogging.