Why is Setting Long Term Goals Important For Your Business

Why does a business need long term goals? Aren’t business owners/Entrepreneurs able to run their business and “figure it out” as it goes? Unfortunately, that is not a viable business plan and often one that sets businesses up for failure. The same can be said for businesses/entrepreneurs that do have goals but they are not specific enough or don’t have an achievable timeline. There are five strategies to make your long term strategy more defined for all parties involved: Goals, Objectives, Strategy, Priorities and Activity. 

Goals: A goal is something you want to achieve within a length of time you selected. If your goal has a timeline that is too long or too short to the point of unachievable, it won’t be accomplished. Setting a goal that is realistic, for example reducing the cost of goods by 30% with a timeline of by the end of the 4th quarter of 2019 is one that is much more detailed than the same one without the percent or the exact timeline. 

Objectives: An objective is a more specific description of your goal that has a better description and is used to make the goal stronger/achievable. Using the example above, if we wanted to reduce the cost of goods by 30%, an objective includes a description as to how that will happen. Reducing or changing the material used to make our product is an example that would be added to that goal. 

Strategies: A Strategy is a process of how you’re going to reach your goal. Using the example above, if you wanted to reduce cost of goods by 30% by using a different material or reducing the cost of that material, you would employ a process such as seeking an outside manufacturer and pricing around to see who makes the cheapest item you are requesting. You could also look at seeing what other costs that impact your cost of goods would decrease it. These different avenues ultimately will steer you down the direction of achieving your goal. 

Priorities: A priority is simply ranking items in an order that is most important to be accomplished and which ones can be ranked lower but are still important. Using the example above, if you want to reduce cost of goods by 30%, is your priority to reduce cost of goods or is it to reduce it exactly by 30%? Knowing what you want first will determine how the goal is accomplished. Priorities are key in order to have complete focus on how you are accomplishing your goal. 

Activities: An activity is the set of employees in the everyday tasks that work towards the priorities. Using the example above, reducing the cost of goods by 30% is accomplished by the managers who are looking to cut down on those costs or workers who are using more efficient processes to cut down on costs. 

While there is no one specific of these terms listed above that will help you with your long term success in your business, all five of the above combined is a stepping stone in the right direction. Implementing the formula of these five strategies will ensure your goals for your business are more thought-out, increasing sustainability and your long term success/goals.