Growth is every business’ goal, but that could mean so many different things. Revenue growth is one of the most common goals, but in order to grow revenue, there must first be other things in place. It’s just like chess. The end goal is to capture the king and win the game but to do that you must take smaller incremental steps that position your company properly and leave fewer risks.
Mini goals remove barriers and get you closer to where you want your company to be. One of the best ways to create these mini goals is to use the SMART goals system. SMART is an acronym that stands for Specific, Measurable, Attainable, Relevant and Timebound.
To skip to the SMART Goals example, scroll to the bottom.
“Specific” should be, as it implies, as specific as possible. “Growing the business” isn’t a specific goal. “Getting better social media results” is, again, not specific. A good SMART goal would be something like, “grow revenue by X.” That kind of revenue growth is specific; “business growth” or “better results” are not.
This is the yardstick of SMART goals. In order to know if you’re reaching your goals, you need to have something to reach for: a percentage, a dollar amount, a location, etc. If we continue using our SMART goal example of revenue growth, we would expand our smart goal to say “Grow revenue by 15%.”
There’s no point in having goals if they’re impossible to reach. This part should concentrate on benchmarks, industry reports and past company performance, just to name a few. If last year you only grew revenue by 3% with a $300,000 budget, and now you have half of that, and you want to increase revenue by 90%, this goal might not be that attainable.
Although “revenue growth” is specific, it also happens to be relevant to almost every for-profit company. If you sell dental equipment though, and your goal is to collect 500 emails at a shoe convention, that’s not really relevant.
Over the past few years, Facebook has minimized organic traffic to a point where the only reason to have a page is to advertise. Facebook is a great example of an irrelevant goal. Most companies want to have a strong Facebook presence and want to grow their Facebook page numbers, even if their goal is growing revenue. But even with advertising, a Facebook page doesn’t actually matter much in the grand scheme of things and are mostly vanity metrics.
In order to know if you’re on track to hitting your goals, you need to know where the track is going and how long it is. Saying, “I want to grow revenue” without a time frame isn’t a SMART goal. However, saying, “I want to grow revenue by 15% in the next twelve months” is, because it’s time-bound. This way you can evaluate your efforts and see if you’re on track to hitting your goals on time, whether it’s in six months or a year.
We will acquire the services of Frozen Lemon Media, an inbound marketing agency to develop and launch an optimized website and inbound marketing program. We would like to generate 180 new customers in the next 12 months from 120 generated last year since our CLV is $35,000, this would generate $6,300,000 in additional annual revenue from $4,550,000 generated last year. Based on industry benchmarks, we will need to attract 5,000 visitors per month to the website, to generate 130 leads per month and close 15 customers per month.
As you can see, there is a lot more to goal setting than simply having a goal, the SMART goals system puts much more emphasis on the specifics and makes you think ahead.
Do you have any great examples of SMART goals that you’ve used for your company? Share them in the comments.