How to Set Goals for Your Small Business

The world of commerce is a dog-eat-dog world. Without the definitive picture of where, when, what, and how you want your business to be after several years, you’re another organization looking to bury itself in competition and financial resource wastage. Business goals set an enterprise apart from its competitors, more so, make them stand out in the industry. If you want to make your small business grow and make an impact in the industry, it would be best to go back to basics by evaluating your goals even further. This article would be of great help if you run a small business and you want to clearly define where you want your business to be.

Well-defined, effective and efficient goals

It’s always a good time for any business to assess their situation. As long as it is geared towards problem resolution, financial growth, human resource development, and operational sustainability, you can get your manual of operations or vision statement placard for a goal-setting session.

It is essential to note that not all goals are worthy of pursuing. Some business owners or leaders fall into the traps of making goals that are either unrealistic, unattainable, inefficient and making human resources unable to thrive. Also, an articulate goal is not enough to move the organization towards success. What’s the use of having a well-written goal such as, “XYZ Corporation aims to contribute 5% of yearly earnings for the outreach efforts to a chosen society,” when it cannot earn enough revenue to cover workforce wages and operational expenses?

Effective, efficient and well-defined goals must possess these attributes:

• • Fosters SME growth and development to your brand and business.
  • State means of achieving your objectives.
  • Improves human resources’ collaboration, teamwork, and career growth.
  • Provides a clear picture of where, what, when and how the business will proceed.

As a reference, we could look at these goal samples for XYZ Corporation.

XYZ Corporation intends to launch the first-ever eco-friendly packaging that supports advocates for a greener Earth. It will also establish a partnership with farmers and fisherfolk for direct purchase of goods for efficient financial investment and help suppliers by providing them cash rebates for bulk transactions.

In this goal, XYZ Corporation would like to set themselves apart by committing to a cause of a greener, healthier Earth and establish direct contact with suppliers for cost-effective operations. Moreover, it states the way the objectives mentioned in the earlier part by launching eco-friendly packaging.

To motivate the human resources of XYZ Corporation in participating the move towards a greener society, a semi-annual count of collected recyclable materials will be done. This activity will determine which employee collected most and will receive prizes in kind to be awarded in the semi-annual team-building events. Aside from mandatory team-building exercises, a working culture centered on collaboration and teamwork will be cultivated.

This tackles the participation and involvement of employees to the organization’s cause. Most of the time, organizations that don’t encourage employees to participate in the goal makes them feel neglected, left behind or unappreciated. Their skills and talents will not be put to good use because they don’t feel connected to their work.

Things to Remember When Setting Goals for a Small Business

For a practical goal setting, it is essential what business aspects you need to work on business growth, improvements, adjustments and eradications. If you are a newly-established business, always cover all bases and make sure to comply with Philippine laws and regulations. For companies already operating, it wouldn’t hurt to assess existing policies that align with the organization’s goals. Here are some tools you can apply to your organization to ensure the growth of your small business:

 

SWOT Analysis

The SWOT Analysis is the process of identifying the business’s strengths (competitive edge), weaknesses (operational or financial lapses), opportunities (possible market entries) and threats (foreseen danger).

Benchmarking

With the help of your planning and research department, they can gather relevant information such as average sales or financial reports and compare it with the organization’s financial performance.

Market Research

This process involves identifying market trends such as demographic needs, customer ages, psychological influences, and income and expenditure trends.

Legal Compliance

Although the process can be tedious and a headache at times, before delving into the operations of your business. An organization needs to comply with legal procedures for effective small business growth. What are these legal documents you need to secure? Please refer to the list below.

• • SEC Registration – for organizations that are partnerships or corporations.
  • DTI Registration – this needs to be secured as you register your business trade name.
  • Mayor’s business permit – you need to obtain a license from the municipality or town that you’ll be operating and payment for local businesses taxes.
  • BIR registration – your business needs to obtain its Tax Identification Number, BIR-compliant invoices and receipts, registration of account books, and payment of national revenue taxes.
  • SSS, PhilHealth, and Pag-Ibig fund registration – as prescribed by Labor laws, you need to register yourself as an employer, and for payment of remittances of employer’s share of contributions.

As of the moment, municipalities host the Philippine Business Registry System, a one-stop-shop for start-up entrepreneurs to aid their business registration process. Make sure to visit your local municipality or town office for a thorough guide that suits your business type.

Once all of the mentioned strategies or tools have been observed, you can start with the actual goal-setting. Just make sure that you are armed with the researched data, relevant information and reports to objectively support your session.

The Process of Goal-Setting

 

Tying your goals to your mission statement

With the help of your current mission statement, you can create a flowchart that will breakdown your goals. For example, a mission statement that reads, “XYZ Corporation is an organization that provides eco-friendly packaging solutions for various business owners in the Philippines. Our mission is to establish a sustainable, cost-effective and eco-friendly solution that mitigates the use of plastic for packaging.”

In the mission statement, one goal can be derived from the word “sustainable.” Being sustainable means being self-reliant and having a forward-looking mindset. Cost-effectiveness can be achieved through efficient use of materials, one goal that you can apply with the cooperation of your employees.

If you think that your mission statement lacks suggestive goals, you may choose to re-evaluate the statement itself so that it will capture the essence of the business.

The ACES Method

It helps to foresee positive outcomes with the help of your goals. After all, who wouldn’t want to achieve growth and profitability for such a small business? However, it will also be beneficial to identify weaknesses and problem areas and set goals to resolve or eradicate those. The ACES method stands for the following:

• • Achieve: What do you want to attain for your business in the future?
  • Conserve: What do you want to retain or hold on in terms of business practices?
  • Eliminate: What practices, resources or values you want to get rid of?
  • Steer Clear: What do you want to avoid for short-term and long-term operations?

Upon identification, you can craft those goals and let it guide you and your business practices for the success of your organization.

Making a SMART goal

SMART goal setting refers to Specific, Measurable, Attainable, Relevant, and Timely goal creation. This is the most common method of establishing goals for businesses everywhere. You can break it down into several notions and merge them into a holistic goal.

All-base goals

This method is one of the most unconventional methods for identifying goals. In this process, you create goals that answer to four crucial business aspects, namely: day to day work goals, problem-solving goals, development goals, innovation goals, and profitability goals.

• • Day to day goals – refer to everyday workspace effectiveness. This can involve goal setting that indicates office management, efficient use of office resources, and daily activities inside the office. Although this may appear irrelevant, it will later improve the overall effectiveness of the office’s functions.
  • Problem-solving goals – in this aspect, you identify the most common problems the business encounters. You can tackle low productivity, low sales, and revenue or service quality issues.
  • Development goals – you identify what your current resources are lacking and find ways to develop or improve it. For example, you lack computer units for sales monitoring, set a goal for this year to purchase at least one additional unit to promote productivity.
  • Innovation goals – for this kind of purpose, you find new ways of selling or improving your existing service or products. You can look for innovative ways of integrating your service to a community cause and engage the people for brand awareness.
  • Profitability goals – for businesses, this will be the first concern for goal-making. After all, if a company does not earn enough profit, it won’t cover payment for human resources, acquisition of materials and other overhead expenses.

Without goals, you are operating on a fleeting sense and without purpose. Always keep in mind that the growth of your small business relies on direction, follow-up, and commitment to set goals and objectives.

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