If you’ve decided to start a business, you’re going to find yourself focusing on your creative idea—the thing you’re so passionate about doing that you’ve decided to make it your livelihood. That’s where you’re the expert. There are, however, a whole mess of other things you should do if you’re really serious about running a successful venture. A good place to start: SMART goals.
What makes a goal SMART?
Have you ever been in a job with a really vague objective? It can be hard to know where to start, but it’s even harder to know whether you’ve achieved said objective. SMART is an acronym lots of business leaders use to help them set well-defined goals:
Now, let’s look at a sample business goal:
My goal is to grow my business and generate more revenue.
This goal is a good start, but it’s pretty fuzzy. What does it mean to grow your business? If you want more revenue, more than what? How much more? The time frame of the goal is also open-ended. When do you want to achieve growth, and by what point do you want to see an increase in revenue?
A SMART version of that same goal looks like this:
My goal is to grow the retail portion of my business by 15% over last year and generate $20,000 in new revenue this year.
Now we have something to work with. 15% growth is significant and measurable. Whether it’s realistic would depend on the type and scope of the current business. There’s a time frame—accomplish the growth by the end of the year. You present the goal to your partners and staff. Does the whole team buy into the goal, believe it can be achieved, and know what they need to do to make it happen?
How to set SMART goals when you start your business
If you’re mapping out a brand-new business, it’s important to include SMART goals in your business plan because those goals will dictate many other decisions. Say you’re starting up an e-commerce company that will sell a line of luxury skincare products. You goals for your first year may be to:
- Offer 3 complete product lines for differing skin needs
- Sell $300,000 worth of product
- Build a vibrant online community with 500 active users talking about their skincare issues
Now you have something to work with. You can break those goals down into actionable steps and determine the costs of each. If you’re going to sell $300,000 worth of product in a year, you can figure out how many units you can expect to sell to hit that goal and price your products accordingly. If an online community is going to be your primary marketing vehicle, you can put together a budget and plan for bringing that community to life.
Tracking progress toward your goals with cloud accounting
Did you know that a cloud accounting software package can help you track progress toward your goals in real time? By integrating your e-commerce platform into your bookkeeping software, you know exactly how much revenue you’re generating. You can also clearly see when you’re not on track to meet your goals and act accordingly. Your business happens in real time—so your accounting needs to happen in real time, too!
As accounting experts, we recommend Xero for all new businesses that need to be able to run from anywhere, understand their real-time cash positions, and get paid on time. We offer ongoing support from real, live humans who are standing by to help you meet and exceed your business goals. Can you afford to wait? Get started today with a consultation.