The best business advice ever given is attributed to Benjamin Franklin: If you fail to plan, you are planning to fail. Think of short-term goals as your daily driver – the vehicle that might excite you, but it carries you to work every day. Medium-term goals provide checkpoints along the way. Long-term goals serve as rest stops where you reflect on how far you've come and adjust the route ahead to reflect current conditions.
Short-term goals describe the daily, weekly, monthly, quarterly and annual actions every business undertakes to reach medium-term and long-term goals. Each goal should be a single action, prioritized for that day and week, that supports a monthly or quarterly goal. Instead of setting goals intended to keep employees busy, SMART goals contribute to the profitability and longevity of the company.
When setting short-term goals, keep them SMART. The acronym stands for Simple, Measurable, Achievable, Relevant and Time-Sensitive. The concept of SMART goals originated with Peter Drucker, author of "Management by Objectives." This approach encourages managers and employees to align company goals with their personal goals. Using the management by objectives approach increases participation and commitment, two keys to team morale and employee retention.
Setting SMART daily goals prevents "but-first" time management. But-first tasks help employees look busy without advancing longer-term goals. Busywork costs the company time, money and morale, leading to high employee turnover and large training budgets. When carrying out a daily task, avoid telling yourself: "I need to [insert task], but first I will [insert distracting task]."
Examples of SMART short-term goals:
- Hold a 15-minute AM strategy meeting every morning.
- Make 200 calls between 8 a.m and 8 p.m.
- Convert 15 of those contacts to appointments or sales.
- Schedule a 15-minute PM strategy meeting every afternoon.
- Adjust calling to ensure 15 conversions out of 100 for the day.
- Review 10 resumes.
- Set appointments to conduct interviews.
- Record weekly sales data totals.
- Plug previous month's sales data into the monthly report chart.
- Generate past month's sales report by the 10th of the current month.
- Hold monthly sales performance meeting.
- Generate quarterly report.
- Send tax payments.
- Review previous year's same-quarter performance versus this year's data.
- Generate annual report.
- Plot data to determine trends.
- Print trend data from prior and current year.
- Plot data for past five years (if you've been in business that long).
- Identify trends.
- Hold a brainstorming session to generate solutions.
Medium-term goals bridge the gap between daily activities and the long-term vision you have for your company. For startups and newer companies, medium-term goals last longer than a year, but less than five years. Companies that have existed longer than 25 years often have a different idea of what medium-term means. A 50-year-old company might consider 10-year goals to be medium-term. The Internal Revenue Service expects companies to make a profit in at least three of the past five years, so many companies use that five-year mark to denote where medium-term goals end and long-term goals begin.
Examples of SMART Medium-term Goals:
- Reduce turnover by 15 percent in each of the next four quarters.
- Use suggestive selling to increase the total value of each sale by 10 percent by the end of the current fiscal year.
- Send a service quality survey to every customer within 30 days of their first contact.
Long-term goals define the company's vision. They tend to be loftier than short- and medium-term goals and often have intentions that extend beyond profit-making, such as building and connecting communities, eradicating disease, preserving resources, developing an educated workforce and reducing global conflicts. Granted, the motives behind some of the loftier goals feed straight back into the company's bottom line, but making a profit and making the world a better place does not have to be mutually exclusive.
Examples of SMART Long-Term Goals:
- Become the industry leader in your field with brand-building, retention and recruitment.
- Form partnerships with local school systems to increase job-readiness of new graduates (community-building).
- Increase investment of time, money and resources in the local community by 5 percent per year for the next five years.
- Invest 1 percent of profits in combatting preventable diseases in supply-chain communities.