The importance of goalsetting in your business.

Why is it important to set business goals?

Goals are powerful—they can focus attention on achieving desirable outcomes. In business, one desirable outcome would be profitability. Profitability does not happen without making sales, plus correctly managing expenses. Employees prefer to know what management expects them to accomplish, and goals provide that direction. The human brain has amazing problem solving abilities, and goals channel brain power toward finding solutions.

Whether business goals are to set company direction or provide motivation, they should be specific, measurable, achievable, and timely. Let’s go back to the profitability goal mentioned previously. A company goal stating: “XYZ Company will be profitable” is not very specific. How profitable? Are there enough customers to achieve that?  By when will profitability be reached?  How will you know the company is profitable? A better way to state that goal is: “XYZ Company will attain a 10 percent net profit margin by the end of 2014, based on sales of 100,000 units.” Now it’s possible to plan action steps to reach that goal and adjust the progress toward attaining the goal if necessary.