“...make sure they fit into your bigger vision - for yourself and your business.”

Setting SMART Goals and KPIs for Your Business

Have you ever felt like you wish your business could do better, but you just weren’t sure how to make that happen? You know you need to increase revenue, but how do you go about doing that? Perhaps you’ve tried so many different approaches and angles and plans, and sometimes it feels like something is working, but then inevitably you find yourself back at square one, wondering how you got there.

If this is you. First of all - don’t catastrophize it too much. It’s okay. It’s not a secret that most entrepreneurs inevitably find themselves feeling this way somewhere on the road of entrepreneurship. The good news is there is something you can do about it - AND you can and should implement it straight away.

It’s called KPIs and SMART goals.

Let’s start with SMART goals. I think by now most of us have learnt about what a SMART goal is, but let’s quickly recap.

SMART is an acronym that stands for:

- Specific

- Measurable

- Achievable

- Relevant 

- Time-bound

It is a framework that helps you write out your goals in an accurate and complete fashion including all the details necessary to make sure they are reachable. You need to have, at any point in time, between 3 and 5 of these SMART goals that your business is aiming to reach. They need to be documented somewhere and you and your team need to review them periodically and track your progress towards reaching them.

They can be anything, but make sure they fit into your bigger vision - for yourself and your business. The idea is that if you end up hitting (or achieving) these goals you should be, for each one you achieve, closer to achieving your overarching vision/ mission/ purpose in life - for yourself and your business.

What is key here is that if you have team members they must also have their own SMART goals and each team member need to clearly understand how them helping your business reach its goals, will help them move closer towards reaching their goals. This is called goal alignment and its and essential ingredient for creating a highly effective team that will drive your business forward.

Your SMART goals can be anything, but they need to fit in with your bigger vision and they need to be properly written out taking into account each of the elements of the SMART acronym.

For example one of your goals might be:

Increase revenue.

This is a goal, but not a SMART one. A SMART goal might look more like:

Increase monthly recurring membership revenue by R20,000 in the next 6 months.

This goal is specific. You know exactly what needs to be done when you read it. 

It is measurable - literally, you’ll be able to pull your financials every month and see how far you are towards reaching this goal by crunching the actual numbers.

It could be achievable - if you compare this revenue amount to historical revenue figures, have you ever been able to increase revenue by this amount before in 6 months? Have you gotten close? If the answer is yes, then this is achievable. If not, you might want to look at other reasons why you feel this amount is achievable, for example do you know of another business that has been able to do this and taking into account your action plans you’ve got in place to achieve this goal do you really feel this is achievable? If yes, then great - keep the amount. If no, then lower the amount to something that is achievable. You can always hit it this time, and then increase the amount in the next 6 months.

It could be relevant. If revenue grows your business will grow. If your goal is to have a healthy business with increased revenue, then this goal is relevant for you. If however, you want to scale down or rather focus on another aspect of the business, for example if your capacity is already at capacity, you might rather focus on something more relevant to that scenario, for example cost cutting.

Finally, it is time bound, because you have the 6 months stipulation in there.

Right, so we all know this, but now we’ve recapped. I want you to write down the three to five SMART goals that are most relevant to your business within the next 6 months. Think about where you are at, what your big picture vision is and where you want to go.

If you feel like it, share with us in the comments what your SMART goals are and perhaps see if you can help anyone else with ideas of how they can achieve their SMART goals.

Now let’s move on to our KPI’s - key performance indicators. What are those? Key performance indicators in entrepreneurship are the things that need to happen in your business, the goals that need to be met, the milestones that need to be reached in order for you to reach your goals. 

These are the things that you identify as drivers of your SMART goals. So you need to figure out, for yourself and your business…if I want revenue to increase, what do I and/ or the team need to do to make that happen? In other words - what are the measurable drivers that drive revenue?

It could be a whole number of things but it comes down to your process. And this is why it’s so important to also know and understand and have written down your process. Have you ever gone through the exercise of writing down exactly what needs to happen in order for your revenue to increase every month? If you haven’t, you need to give it a shot! It is an enlightening exercise. And it is this exercise that you will draw on when identifying your key revenue drivers.

You want to try to identify at least 3 drivers that you can measure to track progress against your SMART goals.

For example, if we take our goal of increasing revenue (the SMART version) - yes, one of the numbers we could track would be revenue, but revenue is the RESULT of a much bigger process that needs to continuously work and have certain outputs.  For example, what kickstarts your revenue process? Do you need to reach out and have a certain number of conversations on LinkedIn? Do you need to make a certain amount of cold calls? Do you need to arrange a certain number of referrals? Does your website need to get a certain amount of traffic?

For our membership-based business, I know that we need to have 100 conversations on LinkedIn to convince 7 of the people we talk to to ‘date the tribe’ / experience our events for free. I know that 3 out of these 7 people will likely end up attending all the events and at our global online speed networking event 1 of them will convert into a paid member.

Because I know this I know that if I want one extra member each month I (or someone from our team) need to have 100 conversations on LinkedIn. Now, if I decide to track the number of conversations being had on LinkedIn, that gives me information on how well we are doing in terms of reaching our revenue-related goals, even before any sales happen. This is therefore a much ‘better’/ more relevant number for me to track when it comes to our revenue-related SMART goals because it gives me an early indication of how we are faring. 

So, for our revenue-related SMART goal, I’ll probably pick the three KPI’s to track as being: Number of LinkedIn conversations had, Number of people currently ‘dating the tribe’, and number of attendees registered for our Global Online Speed Networking event.

Once I’ve picked these KPI’s I will start reviewing/ tracking their numbers on a weekly basis. And if we’re not reaching the target on any one of these KPI’s I will have to strategise and problem solve with my team on how we solve for each of them. For example - how do we increase the amount of conversations we’re having on LinkedIn? How do we increase the amount of people ‘dating the tribe’? How do we increase the amount of registered attendees at the Global Online Speed networking event?

You can see that the effect is that it gives you something to work with - consistently. It empowers you to be in a position where you are problem-solving and then tracking the results. So now, rather than feeling that you’re left out in the dark, you at least KNOW what you have to work on in order to move forward in your business.

I hope that this is as enlightening for you to find out as it was for me when I first figured this out! It really works! So go ahead and give it a try. Once you’ve picked your 3-5 SMART goals, go ahead and pick at least 3 KPI’s that drive each of those goals. Share these with us if you’re up for it! And let’s also see how we can help each other figure out how to drive those KPI’s.

Once you’ve got your goals and KPI’s, now it’s just about tracking them on a weekly basis. Because you’re doing this once a week every week you’ll consistently be focusing, making progress and moving forward in a focused direction. And that will make all the difference in your business.

If you found this article informative, please share it with others who might also benefit!

The next article that is part of Planning and Strategy is Risk Management: Identifying and Mitigating Business Risks, Click here to read the article.

At Business Academy Cafe, we're all about cutting through the fluff to get to the stuff that really matters – helping you build a business that's not just surviving, but thriving. How will you use these insights to carve out your niche and leave your mark?

Don't miss any of our insights – sign up for our newsletter to receive them directly in your inbox.

All branding, proofreading, distribution, and administration functions are
powered by The Sommerville Agency

Watch on YouTube

Listen on Spotify