A new year! I’m sure most of you have done the “Come to Jesus” talk with yourself about business goals, where you want to be at the end of it, and how you plan to get there.
Or maybe you haven’t and you’re just throwing shit at a wall this year to see what sticks. Respect. I’ve done that and just let myself be surprised. It didn’t work out well in a growth sense but certainly forced me to learn gratitude for the lessons learned.
If you are planning goals, though, let me offer some tips on how to define realistic goals that help you move forward without feeling overwhelmed.
How to Plan Realistic Business Goals
Look, we all want to make millions…or at least, make enough to turn a profit that lets you live comfortably. But in most cases, it’s incredibly difficult to create significant income from the beginning of a project. Instead, it’s better to either:
1. Plan out a big 5-year goal and work backward
2. Plan a smaller goal for this year that is expandable and have a stretch goal
The joy of being an entrepreneur is that you can choose your own adventure when it comes to this. My usual system is to have a pie-in-the-sky 5-year goal (which I forget to write down) and then stumble towards hitting it with my smaller yearly goals.
But let me take a commercial break here for a second to say that goals don’t have to be financial at all. Whatever your goal is, it should be something that drives your business forward.
For example, for this blog and Beige House, I’ve worked out editorial calendars that define themes for each month, list any events I need to be prepared for, and let me break each month down into relevant, themed posts. It’s a bit like assigning myself homework, but it feels better than having to figure out what to write every week.
Whatever your goals are, they need to adhere to the SMART method of goal-planning:
- Specific – a drilled-down goal that has definitive terms. So “I want to be self-employed by the end of the year” is not specific. Instead, you would want to say “I want to develop enough of a profit (which is $X) that will allow me to generate a net income of $70k and let me leave my day job.”
- Measurable – Goals don’t work without benchmarks or milestones. How will you measure your progress? What will let you know if you’ve achieved the goal?
- Achievable – Dropping 45lbs in a month isn’t realistic (unless you’re cutting off a limb) and neither is earning $1 million in profit by the end of the year if you haven’t even started. *, Of course, there are outliers to both. Mazel tov to them. Please buy me a new car.
- Relevant – I think this is the most “duh” part of SMART, but it’s still necessary. Don’t work on a goal that isn’t going to drive you forward.
- Time-bound – You can give yourself 35 years or 35 days, but there needs to be a specific deadline
Here’s a comparison using someone who screenprints t-shirts at $25 a pop:
- Bad – I want to make enough money to hire an assistant
- Better – A part-time Production Assistant would need to be $15/hour and work 30 hours a week, which would cost me $1800, or $2200 to round up for any taxes, etc. So I need to generate $2200 in additional profit every month, which translates to 200 shirts wholesale, or 100 retail sales per month. To do that, I’m going to shoot for 2 new wholesale accounts per month and 1 press feature to generate interest. If I can sustain this $2200 increase for 6 months, I will hire a Production Assistant in July.
See the difference? There are clear benchmarks and plans set in place that can show pass/fail and set the expectation on what would be an achieved goal.