SMART Formula: Clear Goals For Your Business
To be successful as an entrepreneur, you need to define goals. For you, for your company, and also for your employees. Goals can be to increase sales, reduce costs, increase profits, and achieve greater customer satisfaction, to name just a few examples. But if you leave these formulations so imprecise, it won’t be easy to achieve them.
You have to formulate goals clearly so that you and your employees understand them. Goals can be defined very well with the SMART formula. How this works and what you have to do for it, we want to bring you closer in the following article.
Definition: what is the SMART formula?
If you want to lay the foundation for your company’s success and success for you as a founder, you have to formulate and define your goals in a “smart” way. SMART comes from the American and stands for “specific, measurable, accepted, realistic and timed.”
In short, you have to formulate smart goals for yourself and your employees. That may sound a little incomprehensible, but it’sits very easy. A simple example: Your goal is to generate sales for your new product by July 31st. This year to increase by five percent. This is a goal that you have clearly defined with the SMART formula. It’s specific and measurable, it’s acceptable, it’s realistic, because the five percent should be achievable, and you’ve scheduled it.
Objectives should always be smart.
When defining your goals, you should always be careful not to just act casually according to the motto: I want to get better. Of course, every entrepreneur wants this, but it cannot be understood as a specific goal. Here it can help to proceed according to the SMART formula:
- You need a goal that is specifically given. Where do you want to start? What do you want to do to reduce customer complaints? That is specific.
- Your goal must always be measurable. If you set yourself quantitative goals, such as a five percent increase in sales, you can measure this well. It becomes more difficult with qualitative goals, again, for example, reducing customer complaints. You also have to set numerical specifications; for example, the complaints have to decrease by five percent.
- Both you and your co-workers have to accept the goal. This means that a goal must always be an incentive and release new motivation.
- It is always important that a goal is realistic. If the goal is set too high, you give up much faster, you lack the courage to innovate, and you always have the thought in your head that you will not be able to do it anyway. That inhibits you in your commitment.
- Don’t forget to give your goal a time frame too. You have to schedule your goal, for example, by the end of the quarter, by the end of the year, etc. In short, there has to be a measuring point for your goal.
The advantages of the SMART formula
With the SMART formula, you can change your perspective on setting your goals. It can help you identify critical values exactly and increase the probability that you will achieve your goals. The advantages are, therefore, clear:
- You can clearly state your goals.
- Your goals can be clearly demarcated from each other.
- You only develop motivational goals as they are always realistic.
- You can ideally adapt your goals to your needs and the needs of your company.
- The SMART concept is very simple and can be implemented without tools.
Where can the SMART formula be used?
The SMART formula is also very often used as an instrument for staff management. Since our working life, especially as founders and entrepreneurs, is burdened with more and more tasks, you can use the SMART formula to define company goals and structure your everyday work better. With the SMART formula, you can create a temporal division of how and when certain tasks are to be done by you. But you also have to define these as goals, and above all, you should set these goals in writing for yourself.
Before the SMART formula comes to the Pareto principle
As mentioned above, you can also use the SMART formula to provide the necessary structuring and timing of existing tasks. Many tasks that may seem important to you can very often be neglected or even left out entirely. But before you start these tasks with the SMART formula, you should make a pre-selection of the tasks that are actually pending. The best way to do this is to use the Pareto principle.
Briefly described, the Pareto principle states that only a small part of the daily tasks is relevant for the achievement of the central goals. It even goes so far as to say that 80 percent of the goals can be achieved with just 20 percent of the effort. Most of the effort is spent on reaching the last 20 percent, which is often no longer really important or does not work at all.
Reduce stress with the SMART formula
After pre-sorting with the Pareto principle, you can concentrate on the SMART formula. Regardless of whether you use them as a tool for leadership or for yourself to define your goals – you shouldn’t do without them. The more structured you can design your work with the SMART formula’s help and set yourself clear goals, the more you can ensure efficient work. Goals are also important to you in your development as an entrepreneur.
You always have to keep in mind that you can also reduce your stress load by a clear structure and clearly defined goals. By using the SMART formula, you ensure that there is significantly less uncertainty and no more unclear time frames for you. The SMART formula fully develops its effectiveness in combination with a rigorous focus on your essential tasks.
Your 7 steps to achieve your goals with the SMART formula
- Decide exactly what you want to achieve and how specific your goal is.
- Always put your goal, “smart” in writing.
- Make a list of actions with all the activities that you need to initiate to achieve your goals.
- From this list of measures, you have to create a plan. You have to arrange all measures according to priorities and in chronological order.
- You should visualize the individual steps and hang up the plan so that you can see it at all times.
- Do not postpone the first activity, but start putting it into practice immediately.
- You need to work on these set activities every day. Items that you have done can be crossed off the list so that they are clearly visible. This increases motivation and helps you on the way to achieving your goal or goals.
Tips for the implementation of SMART goals
Knowing how the SMART formula works do not mean that you will be able to implement it. We have some tips for you here that will make it easier for you to achieve your goals.
STRENGTHEN GOALS WITH THE I-FORMULATION
Whether you want to implement the goals as a team or just for yourself, if you capture them with the I-phrase, it will be much easier for you to implement them. This way, you can identify better with your goal and achieve it better. Example: I will increase my sales by five percent by June 1st, 2020.
VISUALIZE YOUR GOAL
Many people find it easier to imagine their goals and to implement them when they have them visually in front of them. So here, it can help to visualize your goals. Of course, that doesn’t mean you have to paint a picture – but of course, you can if it helps. Graphics that you hang up all over the office can often remind all employees of the goals repeatedly.
PUT YOUR GOALS IN WRITING AND SIGN THEM
Speaking your goals out loud is all well and good to become aware of them. However, speaking out does not create any commitment. Especially when you are working on your team’s goals, it is helpful to write them out and then have them signed by all employees. You are even more committed to pursuing and implementing your goals.
SUBDIVIDE AND DIVIDE GOALS
Here, too, the motto is: stay realistic. Most likely, you will not be able to achieve all of your goals right away. Especially when larger projects are planned, there is not just one goal, but several that want to be achieved. For this, it makes sense to set milestones and divide your employees into teams. Each team takes care of one of the goals and always sets the stage goals in writing. In this way, you can observe how developments are progressing, and your employees are also motivated.
FINDING A BALANCE BETWEEN GOALS THAT ARE TOO SMALL AND TOO BIG
As mentioned before, short-term goals should not be set too big – that quickly demotivates. The same also applies to long-term goals that are too small. Even these can be very unmotivated if they do not offer a challenge.
ALLOW HELP TOO
Seeking support or help is by no means a weakness. Often it even makes a lot of sense to get a consultant by your side who knows exactly what to do. So this can save you from tripping hazards and major mistakes. If you get help from experts in the right places, it can give your business a real boost and help you achieve long-term success.
The SMART formula offers you a very helpful tool with which your goals can be achieved much more effectively. Of course, it means more work simultaneously if you have to deal intensively with your goals, but this will pay off in the long term. Your employees always have the same goals in mind, know exactly what they can work towards and how they can best and most productively achieve them. The SMART formula is essential for a successful business and should not be neglected.