Setting business goals matters. It matters more than you think.
Entrepreneurship is more than bringing ambitious ideas to life and thinking up a creative business name.
The SBA (Small Business Administration) Office of Advocacy reports that 79.9% of all startups launched have been successful, not failed in the first year. But the same report also reveals only 51% of these businesses likely survive 5 years in business with only 33% making it to the 10-year mark.
So what makes a business successful? How do you ensure that your startup is not counted amongst the failing business statistics?
As one of the most successful investors of all time, Warren Buffett once said, ‘’Someone’s sitting in the shade today because someone planted a tree long ago.’’
For the long term success of a startup business, it is crucial to have goals in your mind. The very first year plays the most important part. This is when you create goals and devise ways to achieve them.
And once you have successfully hit the business goals for your first year, you’ll most likely manage the rest of the years to come.
Why Business Goal Setting Is Important For Startups
Running for the sake of running feels like a solid idea, but if you have a specific route and destination in mind, you’ll perform a lot better. This way, you’ll know exactly where you have to go. And you’ll always feel that you are going towards something important.
Startup businesses work the same way. Setting startup goals will keep you moving forward, and on the way, you’ll experience these –
Motivation – As you start meeting your short term goals in the first year of your startup business, not only you but your team will also feel a sense of achievement. This will fuel your passions, enabling you to strengthen your operations and refine your methods – plus you’ll also get an added boost to reach the next goal.
“I was wondering if I even wanted to run a startup, have investors, have the responsibility of employees and answering to a board of investors, etc.’’
You’ll learn how to prioritize – when you set specific goals, it becomes a lot easier to make day-to-day decisions for your business. You will automatically learn where to focus and prioritize in order to achieve the goals you have set. And afterward, it will become clearer which options will help you achieve long-term goals.
Long term vision and direction will become obvious – The goals you set and achieve in the first year will ultimately help you with long term vision and direction. You’ll know exactly where to go after you’ve successfully managed to hit first-year goals for your startup.
Steve Poland, the founder of now-deceased startup ‘MyFavourites’ writes ‘’but ultimately when we came back from SXSW, we all started losing interest, the team was all wondering where this was eventually going, and I was wondering if I even wanted to run a startup, have investors, have the responsibility of employees and answering to a board of investors, etc.’’
MyFavourites’ inability to set goals for a specific feature/task list for the app made a quick mess for the company. If the team was able to shortlist a few features to pick and implement in the short term, things could have been very different for the startup.
There are many other examples like this. Here are the top 10 causes why small businesses fail.
- No market need: 42 percent;
- Ran out of cash: 29 percent;
- Not the right team: 23 percent;
- Got outcompeted: 19 percent;
- Pricing / Cost issues: 18 percent;
- User unfriendly product: 17 percent;
- Product without a business model: 17 percent;
- Poor marketing: 14 percent;
- Ignore customers: 14 percent; and
- Product mistimed: 13 percent.
As you can see from the stats above, not setting sales, marketing, finance, and development goals seem to be the biggest reasons most startup businesses fail.
So to help you survive through the first year, we have listed down specific goals you absolutely need to make sure you hit in your first startup business year.
Sales & Marketing Goals Examples
Creating a solid marketing plan doesn’t really cost a lot of money, all it takes is a bit of time, research, and clever thinking. The best marketing ideas are the ones that are simple and inexpensive, but these don’t usually come out of the blue. You’ll need to think out-of-the-box and these ideas will help you get started. Start with the sales goals below and customize them for your business.
Set a target audience – customers are crucial to the success of your startup business. This is why it is critical that you define your target audience and structure your marketing plan according to their needs.
Foster relationships with influencers – influencers are just as critical for your startup as your customers. These are the individuals who people closely follow and listen to on a daily basis. They could be anyone from Instagram models, YouTube channel hosts, or television and radio personalities. Get in touch with them, send emails, or offer free products to get mentions from them. A single mention from these influencers will propel your business to new heights.
Create ads that drive people’s emotions – According to Unruly, the most-shared ads rely heavily on emotions especially relating to happiness, warmth, and inspiration. A perfect marketing plan should have emotional advertisements instead of logic-based ads. Inciting happiness, anger, fear, or surprise through ads in people will eventually help you connect with them on a different level.
Finance Goals for Startups
Lack of financial plans brings down even the best startup businesses ideas to ruin. Because finances are an extremely important element of starting a small business, you need to make sure to plan things ahead. Here are a couple of short-term financial goals that’ll ensure your business will survive through the first year – and the years to come.
Build a budget – a budget will help you easily find how much you are making and spending each month. By creating a budget for your startup, you can effectively control where the finances will go and where you can save crucial funds. Building a budget can be tricky but software tools like Quickbooks budget can help you out.
Create a basic accounting system – a simple accounting system that can help you establish a connection with your cash-flow is very important. In fact, the sooner you get done with this, the better it will be for you in the long term. As things become bigger for your business, accounting systems can be a pain to implement.
Development Goals for Startups
Once you have set your marketing, sales, and finance goals, it is time to focus on business development goals.
A very common short-term business development goal is to focus on the growth of the company. This doesn’t always mean financial growth – it is more related to the company’s reach such as increasing locations, expanding team members, increasing the number of clients, or just improving customer services.
For example, if you’re a sole proprietor, it is best to hire an assistant and expand your team from there. Or if you’re an entrepreneur working from home, your first-year development goal should be to take your business to an office.
Learn new skills – Another important goal you must set for yourself is to learn new skills that will eventually help your business in the years to come. To do this, you can either set aside time to learn new skills on your own or find a mentor in your industry and build your new entrepreneurial skills under their guidance.
Get involved with other entrepreneurs – one of the best ways to develop yourself and your business is to get involved with other entrepreneurs – preferably in your own industry. This way you can learn from experienced entrepreneurs who have already made mistakes and fixed them with practical solutions.
Many startup businesses fail during the first year and more than a few close their doors even before their sales properly begin to rise. The reason is simple, they do not have set goals in mind which eventually leads to poor focus.
Not having to maintain cash flow, lack of cost control, incorrect distribution methods, poor marketing are just some of the most common mistakes entrepreneurs make. The points mentioned above should give you a good understanding of how to come up with effective goals and how to reach them.
So make sure to set them up no matter how much time, effort, or research is needed and report back on how these essential targets helped your business.
If you’re an entrepreneur who successfully used some of these goals to help your business thrive through the initial years, share the knowledge with entrepreneurs reading this post.