CHAPTER EIGHT: Part C – Having answered the “what” and “why” questions about your business, it’s time to answer the “how.”
Are you in the process of writing a business plan for your small business? Do you need help writing your business plan goals and objectives? Then below is an in-depth guide on how to write a business plan goals and objectives.
Without a business plan, your business would be like a rudderless ship drifting aimlessly on a vast, stormy sea. A business plan is the compass that guides your business through its journey to growth and success. The most important components of your business plans are your business goals and objectives. Without these, your business plan is simply empty. Well-chosen goals and objectives keep a new business on track.
The business objectives section reveals how you are going to execute your vision and mission and bring them to reality. This is where setting goals and objectives come into play. As a rule of thumb, your business goals and objectives must be SMART. That is, they must be specific, measurable, actionable, realistic, and time-based.
Before we dig deeper into how you can plan your business goals and objectives, let me explain what both terms mean and how they are different. (Many people think both terms can be used interchangeably, but they have different meanings).
- What are business goals?
Goals tend to be more qualitative, while objectives are usually quantitative. Also, goals usually revolve around achieving big picture business intentions that are centered around market position, customer service, growth, and company culture among other key things. Goals are the ultimate successes that you plan to achieve after some activity or practice. For example, one of your business goals could be “to expand your business from small scale to medium scale by the next 5 years.”
Business goals outline the destination you are heading for and the time you plan to reach those destinations. Goals also help you improve the overall effectiveness of your business. The more carefully you define them, the more likely you are to achieve them in the long run.
- What are business objectives?
Objectives, on the other hand, focus more on practical, day-in day-out metrics that revolve around revenue, number of customers, and product-related metrics. Objectives are specific procedures for achieving a goal. They are the steps that you need to take in order to achieve your desired goals. For instance, if your goal is to expand your business from small scale to medium scale in the next 5 years, you are likely to have the following as your objectives:
- To market your business aggressively in order to attract more customers
- To reward loyal customers as a way of retaining them
- To develop an online marketing strategy
- To research and analyze possible growth opportunities such as acquisitions, mergers, etc.
- To introduce new products and services
- To open more offices in various locations
In short, your objectives specify what steps to take and when you should take them. Now, let’s briefly define the timelines for an entrepreneurial venture. “Short-term””means the next 9 – 12 months, while “long-term” means the next 1 – 5 years. With the above in mind, let’s now look at how goals and objectives work together to propel a business to success.
- Goals specify where you want to go, while objectives specify how exactly you will get there.
- While goals can increase your effectiveness, objectives make you even more efficient by showing you how realistic your goals are.
- Goals are defined in words, and they are usually very brief. But objectives are usually more detailed, and they come with numbers and specific dates.
Having well-defined goals and objectives for your business means forming a road map for your company’s future. Without them, you are very likely to make wrong decisions and waste precious resources. After having discussed their importance, let’s now discuss how to develop or outline perfect goals and objectives for your business.
Writing your Business Plan Goals and Objectives
Firstly, when establishing your goals and objectives, try to involve everyone who has roles to play in the achievement of those goals and objectives after you outline them. Secondly, start with as few goals as possible. Anything between 5 and 8 is a good number to start with. If your goals are too many, you may have a hard time accomplishing them. But be sure to outline enough goals that you will need to drive your success. Here’s a checklist for defining your goals and objectives:
- Outline how determined you are to succeed. If your determination isn’t strong enough or you are nursing fears of obstacles ahead, you are less likely to succeed.
- Define whether you are willing to invest your own money and time for no pay and carrying on with this sacrifice for many months, at least.
- Define how many employees your business will have when your efforts start paying off.
- Define what you want your annual revenue to be after one year, five years, ten years, and so on.
- Define what would be your market share in that time frame you have set.
- Define whether your business will concentrate on just one niche or it will offer a wide range of products and services.
- Outline your plans for geographic expansion; local, national, or global.
- Define whether you will be in charge of most tasks or you will delegate most tasks to others.
- Ask yourself if you are comfortable taking direction from others or working with partners or investors who may have some input in the management of the business.
- Define whether your business will remain privately owned or it will go public after some time.
Finally, before incorporating your goals and objectives into your business plan, you must fine-tune them to ensure that they are clear, specific, realistic, and in line with your pattern of business.