Do you spend more time planning your holidays than the future of your business? Stephen Barnes, Principal Consultant at Byronvale Advisors and author of Run Your Business Better, has found that remarkably few small business owners prioritise planning and goal-setting.

“Failing to set goals is like turning up at the airport without a ticket and with no idea of your destination,” he says. “In my experience, most large businesses have formal goals articulated in a plan, but most small businesses don’t.”

Goal-setting doesn’t always come easily.

“Many small business owners prefer to focus on the detail at the expense of the big picture,” Barnes says. “They feel more comfortable in the role of a practitioner than a leader.”

They may also be afraid of failure.

“It’s natural to feel some trepidation but, if your fears are holding you back, you need to question their validity,” he says. “For example, I’ve worked with clients who were paralysed by the fear of what people would think if they set a big, hairy, audacious goal and failed to achieve it. In reality, it’s unlikely anyone else would even notice.”

Getting started

Barnes recommends a strong vision statement as a starting point.

“This is a vision of your company’s long-term future condensed to just one or two sentences,” he says. “It should be bold and ambitious, pushing the boundaries of what you imagine is possible, but it must also build on your core competencies, so it isn’t just a fantasy. You should be able to visualise exactly what the business will look like when you reach this point.”

He adds that a vision statement is best when it’s clear enough for everyone to understand without any danger of misinterpretation.

“It should motivate and inspire you and your staff by giving what you’re doing a strong sense of purpose,” he says.

Achievable steps

The next step is to break your ultimate vision down into smaller goals.

“Think of the acronym S-M-A-R-T – specific, measurable, attainable, realistic and timely,” Barnes says.

• Specific. Each action should include the details of what you want to achieve, such as when, where and how much.
• Measurable. Without being measurable, your objectives may be nothing more than good intentions.
• Attainable. An aspirational goal may inspire you but, if it’s unattainable, you could be setting yourself up for failure.
• Realistic. Focus on goals that can be achieved and are aligned to your overall business objective.
• Time specific. Every action should have a workable deadline.

A flexible plan

Rather than the plan itself, Barnes champions the process of planning.

“A plan is out of date almost as soon as it’s completed because things happen along the way that you can’t anticipate, whether good or bad,” he says. “Most plans fall down because they don’t have built-in slack to account for these unknowns – but the inaccuracies in plans doesn’t mean they have no value. As Dwight D. Eisenhower said, plans are useless, but planning is indispensable.”

Effective motivation

Achieving goals is also about motivation.

“Money is one of the most common ways to motivate staff,” Barnes says. “It has a wide-ranging appeal and a company can use it in many different ways, from special bonuses and commissions to gift certificates and cash rewards.”

However, money doesn’t always have the expected effect. For example, Dan Pink, who writes about work, management and behavioural science, suggests that financial rewards work best for repetitive, straightforward tasks. When the tasks become more complicated and require some conceptual thinking, science shows there are three other factors that can lead to better performance – autonomy, mastery and purpose. Autonomy is the desire to be self-directed. Mastery is the drive to improve and gain skills. Purpose is the desire to do something that has meaning.

“This brings us back to the importance of an inspirational vision statement and goals each individual can own,” Barnes says.

5 tips for great goal-setting

1. Visualise. When you’re working on your vision statement, get everyone thinking about what they’d like the business to look like in five or 10 years’ time. Ask them to design a magazine cover or Instagram story featuring the ideal future business – the headline, the pictures, the good things people are saying about it.
2. Continue to involve your employees in your goal-setting. People are generally more motivated when they understand an overall plan – the purpose behind their targets.
3. Goals should be a stretch… but achievable. When you know you’re bound to fail, you’re unlikely to keep trying.
4. Take care to manage your own expectations. This is particularly the case if the business has had a spurt of high growth. It may not be sustainable.
5. Be flexible. Unpredictable things happen. Be prepared to make adjustments that take the unexpected into account.