A business goal is a broad outcome that a company hopes or expects to accomplish in a period of time. It can pertain to the business as a whole, a specific department or project. It may have to do with employees or customers.
Whatever its nature, it sets a general direction for the company. Though business goals aren’t generally specific, they should be measurable and realistic—things that the company can work toward.
Business Goal vs. Business Objective
Some people use the terms business goals and business objectives interchangeably. The two are different, but they often work together to achieve a company’s desired outcomes. While business goals are broad targets that define the what, business objectives are the how or the specific and measurable steps that a business can take to achieve its goals.
Types of Business Goals
Companies rarely just have one goal. At certain milestones, businesses can add new business goals or change old ones that have already been achieved. To know what kind of business goals to set, it’s helpful to know the different types:
Time-Based Goals
Time-based goals are based on a set period of time. These can be long-term, stretching out over months or even years; or short-term, lasting only a few weeks, months, or a quarter.
Long-term goals are usually defined at the founding of the company, i.e., the ones written in a business plan. Meanwhile, short-term goals are the steps that a company takes to achieve its long-term goals.
Performance-Based Goals
Performance-based goals are dependent on specific tasks and processes. They’re great to use to evaluate employee performance and to see if workflows are returning their intended results. Examples of performance-based goals include specific marketing campaigns, hiring new employees (or retaining existing ones), and efficiency of operations.
Quantitative and Qualitative Goals
Quantitative goals are the easiest goals to measure because they use data such as numbers and statistics. Common examples of these include profit targets or user acquisition goals.
Qualitative goals, on the other hand, are more difficult to define because they are subjective and can encompass broader criteria, such as how audiences react to a product a business is selling. If setting qualitative goals, it’s important to be specific about how they will be measured.
The Importance of Business Goals
With both existing and in creation of a new business, setting business goals is important for three main reasons:
To Measure Success
Companies should always be growing, and setting goals encourages businesses to constantly improve and innovate. The success of a business can also be measured by comparing its progress with its goals. When the two don’t correlate, it’s a good sign that some changes need to be made.
To Define Objectives
You can pinpoint what needs to be done without tying it to an expected outcome. Setting business goals helps companies pinpoint and track relevant objectives to reach their targets.
To Align Teams
When managers and employees are aligned about a company’s goals, it’s easier to be focused and motivated about working toward them. Being aligned with a common purpose also helps steer decision-making because the rationale behind every move can be justified.
How to Set Business Goals
Defining business goals starts with a clear understanding of your company’s purpose. From there, owners and managers can establish the outcomes your business hopes to achieve in the future, whether soon or in the long run.
Once a broad target has been defined, you can set, assign, and measure SMART (specific, measurable, attainable, relevant, and time-bound) objectives that get you closer to the goal.
It’s important to map out business goals to direct your company and employees in the same direction. When you have a plan laid out and everyone’s on board, goals become much easier to reach.
