Setting Goals and Objectives in your Business Plan
Goals and objectives in the business plan may are drawn from the strategy or the vision of the business. Strategic plans tend to be concise, and a summary of the direction of the business. Goals are general, broad objectives, probably without a measurement for success. Objectives are precise, tangible, concrete and can be measured.
SMART objectives are very useful in a Business Plan. SMART is an acronym for Specific, Measurable, Achievable, Realistic and Timed, and that encompasses everything that objectives should be.
A business plan should contain the Vision of the business – two or three sentences which encapsulate how you see your business developing in the next three to five years.
GoalsFrom the vision, goals can be elicited. These are key features drawn out of the underlying reason that the business exists and what it is proposing to do.
Goals can be put into these categories:
Unique CapabilitiesWhat is unique about the business’s products? Or the way it works? What sets it apart from its competitors?
Products And MarketsWhat products or services does the business provide? What sectors of the market it is involved in? What geographical location does the business cover?
PositionWhat position in the market does the company aspire to? How big does it wish to be?
ProfitabilityThese goals will be crucial for potential investors who are looking to see when they’ll get a return on their investment.
ValuesGoals in this category will be concerned with the underlying values, ethics and beliefs of the business. All actions and activities of the business should be driven by the values (which may be written in the vision statement).
ObjectivesObjectives will be drawn from the goals, and here is where they get measurable and precise, and should adhere to the SMART principles outlined above. Objectives may even be broken down into milestones so that progress towards their achievement can be measured.
A key point is to make sure that the objectives fit will with the goals, and especially the values of the business, and don’t just become measurable targets for their own sake. It is also important to keep the objectives (and therefore the goals) alive by continually checking them for success. If achieved, goals and objectives can be re-set, or if they prove unattainable for reasons that are understood and accepted, they may be changed or even removed.
Your business will attempt to meet its objectives in order to attain its goals, as part of its overall strategy.
Business EnvironmentIn order to do this, you, as the business owner, must ensure that the business environment is set up so that the business can achieve its goals. What conditions must you provide? What resources will the business need? What skills are needed in various parts of the business? What might prevent your business from achieving its goals, and what can you do about that?
Answering these questions will help you create the environment in which the business can realistically achieve its goals, via its objectives.
It is also important to ensure that there are no conflicts within the goals, or within the objectives. You should not have a situation where one part of the business is trying to achieve something that another part of the business is attempting to stop! Competition between different parts of the business is healthy; open conflict is, quite evidently, not.
The business plan should clearly state the goals and objectives of the business, so that everyone – both inside and outside of the business – who reads the plan will understand what it is trying to do. As the business progresses, everyone should be in a position to keep those goals and objectives in mind, and continue to work towards them.