How to set business goals (plus examples)

Establishing clear business objectives is key to paving the path for success. By setting both short and long-term goals, you can map out strategic maneuvers and keep your team on track. This guide is a leader’s roadmap to understanding different types of business goals and how to define them effectively. Here's a glimpse of what we'll explore:

• What are business goals?
• Types of business goals you may set as a manager
• How to set business goals as a manager
• Examples of business goals companies typically set 
• Adjusting business goals
• Conclusion
• FAQs

What are business goals? 

Business goals are broad targets a company wants to achieve over a set period. They shape business strategy and guide decision-making. They provide direction on how to align resources and efforts. Although many people use the terms "goals" and "objectives" interchangeably, they're different. Objectives are measurable actions you take to get closer to your long-term business goals. 

Types of business goals you may set as a manager 

Explore the different business goals you can set for your team or company:

Short-term vs long-term business goals

Short-term business goals are measurable objectives you want the team to achieve in a few days, weeks, or months. They provide motivation and a sense of achievement as you reach each goal quickly. Here are some short-term business goals examples: 

• Increase traffic on the company's blog by 20% by the end of the month.
• Hire five new sales team members over the next three months. 
• Create two social media posts per week.

A business's long-term goals are ambitious outcomes that aim further into the future, usually many months or years. Measuring the progress of these business goals may be harder. And they may take longer to achieve. But they provide shared direction and motivation for team members. A company may use a long-term goal as a vision or mission statement.

Here are some long-term business goal examples: 

• Increase the company's market share to 35% in the next 10 years. 
• Set up eight offices in the APAC region within 10 years. 
• Increase employee retention to 85% in the next five years.

Long-term business goals may only provide a general course, not specific steps to take. Short-term goals provide step-by-step directions on how to reach your target. Many business leaders break down long-term business goals into several short-term goals. This can make them more achievable. Think of short-term business goals as building blocks towards larger goals. 

It's important to balance short-term achievements with long-term vision to succeed. The company needs a long-term business goal to understand its destination. A long-term vision reminds team members of their end goal and motivates them to work towards it. Short-term goals help you understand what you need to do to achieve the long-term vision.

Financial goals

Financial, or economic, goals are specific monetary targets a company wants to achieve. These goals can relate to the company's profit margin, cost reduction, investments, or economic stability. Financial business goals help you properly estimate and create budgets. With clear business objectives and measurable benchmarks, you can better manage the company's finances. Prioritizing its spending can help the company achieve financial success. 

Financial business goals are often measurable and focus on long-term success. These goals also vary based on which lifecycle stage the business is in. For example, a company may be in the start-up stage. Its economic goals may focus on getting funding from investors to buy equipment, rent office space, and hire employees. For mature organizations, financial business goals may center on investing in new technologies and emerging markets. 

In this digital age, you can use various financial planning tools and apps to simplify the financial goal-setting process. These tools can help with budgeting, investment management, and even tax preparation. 

Non-financial goals

Examples of non-financial business goals include brand reputation, customer loyalty, employee training and development, and community involvement. These goals may help the company improve its image and stay in business for a long time. They also confirm that the company considers the well-being of its employees, customers, and the community. Companies that update employees' skills and relevant education may benefit from increased productivity. Improving brand perception can help attract and retain top-quality workers.

Companies can also create goals in corporate social responsibility. Examples include sponsoring charity events or encouraging employees to volunteer for worthy causes. Try to maintain a healthy balance between financial and non-financial business goals. Both are essential for a company's success and growth. 

How to set business goals as a manager 

The process of setting business goals may start with a review of past goals. It can also include an assessment of the current state of the organization. It may involve working with a team and getting feedback and input. This helps you craft specific business goals and clear action plans. 

SMART business goals 

SMART is a popular goal-setting framework. You can use it to define your business goals and ensure they're actionable. It also helps you set goals in an organized and structured way. SMART stands for specific, measurable, achievable, relevant, and time-bound. SMART goals provide clear steps to take and help you stay on track while working towards your business objectives. 

When setting a SMART goal, focus your efforts on a specific business goal. Use some kind of metric, such as a percentage, to measure progress and decide if you're on track to reach your business goals.

Ensure the goal is achievable. This helps motivate you even if the task is difficult. A relevant business goal helps you rank tasks and align them with the business plan. Finally, set a deadline to make sure there's timely progress on the goal. Here are some examples of SMART goals: 

• Increase customer retention rate by 25% within one year.
• Increase revenue from the online store by 10% in the next six months. 
• Acquire 10 new clients within the next three months.

One common mistake business leaders make is setting unrealistic goals. These are overly ambitious or lack a reasonable deadline. Be realistic about your team's abilities, the company's resources, and time constraints. Break down the large business goal into smaller, more manageable tasks to stay motivated.

Another error is neglecting to have a structured execution plan. Overcome this issue by assigning a project lead to be accountable for the tasks.

Alignment with vision and mission

It's essential to align business goals with the company's vision and mission. The company's vision reflects its purpose, so managers should tailor goals toward fulfilling it. To ensure alignment, reflect on the company's values and ask yourself how each goal is connected to the vision and mission. When there's a misalignment between goals, vision, and mission, there isn't a clear direction. This can create confusion and a fall in motivation levels among employees. 

A great example of a company that aligns its goals with its vision and mission is Amazon. The vision and mission of Amazon is "to be Earth's most customer-centric company, Earth's best employer, and Earth's safest place to work." Its goals and strategies start with the customer and work backwards. 

Amazon is responsive to the customers' changing needs and wants, which has boosted customer satisfaction and increased loyalty. It's constantly innovating to improve user experience, such as by giving personalized recommendations. Its huge selection of products, hassle-free return policy, and efficient customer service show its commitment to being a customer-centric company. 

Examples of business goals companies typically set 

Explore these examples of business goals: 

Profit maximization

A profit maximization business goal refers to a company seeking to make the highest profit possible. This may mean extending the store's operating hours, expanding product offerings, or increasing employee productivity levels. It's important not to compromise on ethics when trying to increase profits. For example, it's unethical to reduce costs by using cheap, low-quality materials or overworking and underpaying employees. 

Here are some steps you can take to set profit maximization goals: 

1. Assess and reduce your operating costs.
2. Adjust pricing.
3. Increase customer lifetime value.
4. Cross-sell products.
5. Lower overhead costs.
6. Motivate employees.
7. Sustainable development

This business objective means using environmentally friendly and ethical practices. Companies may integrate sustainability into their business model and strategy. For example, they may reduce waste production at factories. The PwC's Global Investor Survey 2023 found that most investors agree on the importance of environmental, social, and governance (ESG) issues. In fact, 75% said that companies' management of sustainability-related matters is an important factor in their investment decisions. 

To set a sustainable development goal, you can explore areas such as energy efficiency or plastic usage. Set specific targets and devise ways to achieve them.

For example, Del Monte Philippines outlines how their corporate practices align with the United Nations’ Sustainable Development Goals (SDGs), showing their specific contributions to each Sustainability Pillar.

Increased revenue

To increase company revenue, you can add products or services, add new payment forms, or offer subscriptions. Innovation plays a key role in increasing revenue. It lets companies identify untapped markets, create new products and services, and apply technology.

Companies can also look at ways to improve online or in-person customer experience. Positive and consistent interactions can lead to brand loyalty; 86% of consumers would be willing to pay more for a better customer experience. 

Improved customer satisfaction

This represents how content and fulfilled customers are when they interact with products and services. You can measure customer satisfaction using metrics such as customer satisfaction score, customer effort score, net promoter score, and churn rate. When customers are happy, they tend to be loyal and may also serve as brand ambassadors. They're likely to share their positive experiences with others and drive word-of-mouth referrals. This can lead to an improvement in business performance. 

To improve customer satisfaction, understand customer needs through market research. You can also gather feedback. Keep product quality consistently high by implementing strict quality control measures. Communicate effectively and regularly with customers. Let them know about new product launches and any updates or disruptions. 

Business process optimization

Process optimization enhances efficiency by identifying bottlenecks and redundancies in the workflow. It helps you improve the quality of products and services. It can also boost profitability and promote innovation. All these factors contribute to achieving your business goals. 

Explore process improvement methods and tools to optimize business operations. These include business process automation, business process management, Six Sigma, root cause analysis, and process diagrams. You can also use technology to automate repetitive tasks. This can free up employees' time for more important work. Employ data analytics to identify areas of improvement within business processes. 

For example, Grab Philippines introduces new technologies to their app that will help reduce their driver-partners’ idle time and optimize their earning potential. In this specific example, the new technologies focus on high-demand areas. Sessions enable driver-partners to only receive bookings within a specific area while Personalized Alerts notify driver-partners when the places they frequent are experiencing a surge in demand. These new technologies help optimize the platform’s overall performance.

Assessing your business goals

Regularly assess the company's strategic goals to ensure you're on track to achieving them. You can use a scoreboard as a visual tool to keep track of your actions. Decide what data to track, and design it in a way that's easy to understand at a glance. Update it often for motivation. 

You can also gather feedback from team members to assess business goals. For example, they may tell you that the timeline wasn't realistic, as certain tasks took longer to complete. Learn from the issues employees raise, and adjust strategies based on assessment outcomes. 

Adjusting business goals

Here are two ways to adjust your business goals: 

Responding to market changes

Business goals should be dynamic instead of static, as the market is constantly changing. Set and adjust business goals according to the latest market trends. Seek customer feedback to get early signals of changing preferences or emerging needs. Engage with customers through surveys and social media platforms to gain insight into how the market is evolving.

For example, more customers may request sugar-free options. This may suggest that the broader market is moving towards health consciousness. 

Use Agile methods in your product development process; they're flexible and allow you to deliver your product faster. Use frameworks such as Scrum, Kanban, or Lean and tools such as sprints, backlogs, and user stories to improve and speed up your product development process. 

Companies like Yellow Pages effectively responded to the growth of digital and social media by digitizing its entire business. They moved from being a print-based offering to providing an online directory for businesses. Another example would be the toy manufacturer Lego, which faced serious financial difficulties due to changing consumer preferences and low sales. It restructured its operations, streamlined its supply chains, and refocused its product lines. It also introduced the Lego Movie, which helped to boost its brand image and increase sales. 

Continuous improvement

Continuous improvement means reviewing the company's performance and upgrading its products, processes, and strategies. It's about reaching a business goal. This can happen over time through incremental changes or at once through a breakthrough improvement.

You can foster a culture of continuous improvement. Do this by allowing employees to identify solutions and make changes in their work areas within agreed guidelines. Create channels to get employee suggestions and feedback, and have a system to evaluate and implement their ideas. 

Empower employees to take ownership, train them, and recognize and reward their efforts. You'll help create a supportive environment where they can experiment and grow. This can bring about positive changes in the organization and contribute to reaching business goals. 

Conclusion

Business goals are essential to set the direction of a company. They help you devise strategies and stay focused. Set a variety of goals to ensure you're covering all aspects of the company's operations. For example, these can include cutting operational costs and increasing employee satisfaction.

Use the SMART framework to define your business goals and ensure they're achievable. Measure progress, and use it to adjust the goals along the way. Also consider market trends and employee and customer feedback.

FAQs

Here are answers to common questions about business goals: 

1. What are some common challenges in setting and achieving business goals?
   ⁠One common challenge is that the goals lack clarity. When the team doesn't have a firm understanding of what the goals are, they're unable to plan specific actions to achieve them. This can cause confusion, frustration, and low motivation. Another challenge is that the goals may be unrealistic in terms of the size of the accomplishment and the time period. 
2. How to set effective business goals as a manager? 
   ⁠The first step is to assess the current state of the business through a framework, such as SWOT. After identifying the company's strengths, weaknesses, opportunities and threats, you can decide what needs to be improved. Get external and internal feedback to gain valuable insights. You can then use the SMART framework to set specific and time-bound goals. Finally, think about how to measure progress and use existing metrics or create new ones. 
3. How to communicate business goals to my colleagues? 
   ⁠Share the business goals in a clear and concise way. Avoid using jargon and buzzwords. Assign each team member with specific roles and responsibilities. Emphasize how the efforts of each individual will contribute to achieving the company's broader objectives. 
   ⁠Use different internal channels to communicate the goals, such as newsletters, digital signage, and corporate screensavers. Repetitive messaging in various formats can help with message retention. 
4. How can I react to market changes as a manager? 
   ⁠First, foster a culture of adaptability so that employees will embrace changes and be more resilient. Conduct market analysis regularly to identify emerging trends and customer preferences. This can help you anticipate market changes and make informed decisions. Adopt an agile organizational structure to respond to market changes quickly. 
   ⁠Encourage experimentation and innovation to develop agility and flexibility in the team. This can help the team to seize opportunities and lessen any negative impacts of market changes.
5. How can I adjust my company's business goals?
   ⁠Monitor and measure the progress constantly and track KPIs to evaluate the results. Depending on the progress and market changes, adjust the scope, timeline, or indicators of your goals. You may even add or remove some goals. Be open to new ideas and innovations and incorporate them into the goals. 
   ⁠When modifying business goals, ensure that they're still aligned with the company's mission and vision. Be transparent and communicate the changes to your team and stakeholders and get their feedback and support. 
6. What are the benefits of setting long-term business objectives?
   ⁠Setting long-term business objectives gives you a clear target to work towards and provides motivation and inspiration for employees, especially during challenging times. They help you prioritize tasks, allocate resources effectively, measure progress over time, and celebrate your achievements. 
7. Are there any tools or software to help with tracking business goals?
   ⁠Yes. Here's a list of tools you can use: 
   -⁠Asana
   -⁠Trello
   -⁠Engagedly
   ⁠-Friday
   -⁠15Five
   -⁠Jira
   -⁠Goalscape
   ⁠-Lattice
   ⁠-PerformYard
   -⁠Performance Pro
8. How often should I review and adjust my business goals?
   ⁠It's advisable to review your business goals every quarter to make sure the goals are relevant. Reviewing your goals at regular intervals also helps you track progress and determine if the goals are realistic. 
9. What strategies can I use to align my business goals with my company's mission?
   ⁠Clearly articulate the company's mission and values so that all team members know the purpose of the organization and its principles. Refer to the overarching purpose and principles to guide the goal-setting process. Always ask "why" to ensure that the goals reflect the company's mission and values.