How to prepare and set long-lasting targets for the new year
Posted: Mon 2nd Jan 2023
There's no better time to set targets than January. Whether you're starting a new business or want to grow an existing one, the new year gives you the opportunity to refresh and reset.
Setting targets is a crucial part of keeping your business on track. Many people create ambitious goals at the start of a year only to forget about them as things get busier, so it's important to create goals that can keep you motivated and focused.
We spoke to a number of small business owners about their approach to target-setting and how to get the best results.
Setting a long-term goal
Before you set targets, it can be useful to choose a bigger goal to work towards. Identifying a long-term target will help give your business direction and momentum. The goal needs to be something that you're really passionate about – remember that you could be working towards the same aim for a number of years.
It can help to think about where you hope your business will be in five or 10 years' time. For example, you might picture yourself managing a team, running a number of different locations or earning a six-figure salary. This will give you an idea of your priorities and what's important to you.
Well Defined founder Chelsea Cox recommends taking time to decide on your business goal. She says:
"My long-term goal is to expand and add sister companies, but it's not something that I decided on straight away. It's something I took my time with. I understood where there were potential gaps in the market and set out a five-year plan based on that."
Big Hairy Audacious Goals
Many companies choose to set a Big Hairy Audacious Goal (BHAG). A BHAG is a clear, ambitious long-term goal that your entire business works towards.
Unlike normal goals and targets, a BHAG has to feel compelling and adventurous. It should have the power to excite people and stimulate creativity over a number of years. A famous example is President Kennedy's 1961 announcement that he wanted to send an American safely to the moon before the end of the decade.
Your BHAG could be anything from making science awesome for a million children or "to be bigger than Walkers and as loved as Lego".
Make your targets measurable
The targets you set for the year should be ambitious but achievable. If you've chosen a long-term goal or goals, annual targets should act as milestones for you to gauge how much progress you're making.
It's crucial to assign metrics to each target you set. Rather than deciding that you want more customers or better visibility in the local area, push yourself to dig into the details and quantify what success would look like.
How many customers do you want this year? What percentage of existing customers could you persuade to purchase from you again?
Using the SMART methodology for goal setting
The SMART method is an effective way of making sure you've covered all bases in your target-setting process. You should be able to understand what you need to achieve, by when and how you know it's been successful.
To make sure your targets are clear, they should be:
Specific: The information should be direct and detailed.
Measurable: Make sure you can measure or track your success.
Attainable: Check that what you're trying to achieve is realistic.
Relevant: Your targets should relate to your company's purpose and goals.
Time-based: Set a deadline by which you hope to have achieved your aim.
Don't be afraid to consider revenue
Well Defined's Chelsea tries to plan as much activity for the year in advance, so she can see what each month roughly looks like when planning finances. She explains:
"I'm sitting down with my finances from the previous year to see where there is opportunity for improvement. My business has only been going for just over a year, so I'll be going into my second year looking for a 25% increase in revenue. This should allow me to recruit new team members."
Dividing targets into tiers can help to keep you motivated. Chelsea sets a baseline target, a stretch target and a "super stretch target". She's found that a lot of business owners are hesitant to base targets around revenue, but urges them to try to get past this.
"Don't be scared to be honest about how much you want to earn. I work with a lot of clients who don't want to have a financial target because they think it's a sign of greed or it makes them feel 'cold'. Finances are vital to a business, so you have to overcome this."
Talk to mentors or peers
Target-setting doesn't have to be a solitary process. Business strategist Simon Ong believes that sharing your targets with a mentor or peer can help to hold you accountable. He says:
"You're more likely to succeed if you're accountable to someone and if you're regularly reviewing your progress: what are you doing, what are you learning and how are you progressing?"
Similarly, an outside perspective can help you to identify areas for growth. When you're deep in the weeds, it isn't always easy to identify where your business potential lies or how best to monetise your ideas – something that Chelsea calls "growth blindness". She recommends working with a mentor or business peer to check you're heading in the right direction.
"Work with a mentor or spend an hour with someone to hash out your growth revenue plans. Again, don't be scared of being honest about what you want financially from your expansion. Set a best, ideal and worst case scenario, so you have planning options."
Setting targets in 2024
Whatever targets you choose for 2024, it's important that they make you feel inspired and motivated to work on your business. Simon explains:
"If you're not really connected to something, you're more likely to give into procrastination. It's about understanding why something is important to commit your time to. It's about choosing a vision that's compelling, magnetic and exciting."
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