As a business owner, you need to plan ahead. This means setting growth targets, which help your business to stay on track, stay focused and measure progress. But, that doesn’t mean setting unrealistic growth targets and hoping you might, if you’re lucky, reach one or two. Though ambitious goals can help you to stay motivated, they can quickly hold you back if they’re not also realistic.
Have You Set Growth Goals?
Growth targets are a bit like a map for your business. If you don’t have them, and you rely on guesswork, you’re likely to get lost. When done right, growth targets can help to:
Ensure your team knows what their top priorities are
Compare performance and meet standards
Use resources wisely
Keep an eye on progress and find problems early
Keep your long-term business strategy in mind
Goals help you to break down big, long-term aims into smaller, more manageable steps.
Why Realistic Growth Goals Are Important
You might want to aim high because big, ambitious dreams can be more motivating. But, it’s usually better to have realistic targets. When you set a realistic goal, you factor in your current income, growth rate, the industry and market, available resources, seasonal changes and past performance. These goals aren’t easy and you’ll still need to work hard. But, with the right plan and execution, they’re also within reach.
What Happens if You Set Unrealistic Growth Targets?
If you enter the next quarter with goals that are unrealistic, you could end up doing more harm than good, even holding your business’ growth back. This is because unrealistic growth targets:
Damage Team Morale
If your team keeps missing targets that are impossible to reach, they’ll start to feel frustrated and lose interest. Eventually, this can lead to key members of your team losing confidence, being less motivated and finding a role elsewhere. Employees want to feel as though they’ve done something right. When goals are out of reach too often, success becomes rare or impossible to achieve.
Make Decision-Making Hard
Unrealistic goals can make your team feel like they have to make risky or short-term choices just to hit the numbers, which can be risky. It can lead to employees not paying attention to quality, promising too much to customers, going over budget and chasing the wrong leads.Making the wrong decisions can hurt your business’ growth in the long run.
Make it Hard to Track Performance
Setting goals that are too high makes it hard to judge your business’ actual performance. If you keep missing your targets, you might not be able to tell the difference between a bad plan, a plan that didn’t work out well, or a goal that was impossible to begin with. This makes it harder to figure out what needs to be changed.
Create Stress and Burnout
When there’s a lot of pressure to do well, but no way of getting things done, employees start to get burnt out. This is especially true in small businesses where teams are already stretched thin. Unrealistic goals don’t always lead to better results, and they’re just as likely to cause stress and hold productivity back.
How to Set Realistic Growth Targets
Setting realistic targets doesn’t mean thinking small or underestimating your abilities, it means being mindful about the goals you’re setting and what your business is realistically capable of.
Look at Your Business’ Past Performance
When you’re setting realistic growth targets for the next quarter, it’s a good idea to look back at how you did in the previous quarter. Did you see any growth? If you did, what kind of growth did you see? You can use this as a starting point. For example, if your business grew by 5% last quarter, you might set a target of 8% for the next quarter. This is realistic, but a growth goal of 20% isn’t.
Think About Your Market
There are a lot of things that can impact the UK market. The state of the economy, people’s faith in the economy, industry trends and seasonal patterns. Don’t just set goals based on your own ambitions and hopes, make sure they actually reflect what’s going on in your market.
Break Goals Down Into Smaller Steps
Instead of just thinking about a big goal for the quarter, which can be daunting, break it down. Split goals for the quarter into goals for each month, goals for each week and everyday actions. This makes it easier to keep track of your progress, and makes it easier to manage overall.
Make Sure Your Targets Match Your Abilities
Your growth targets for the next quarter aren’t going to be realistic if they don’t match your abilities. Make sure you have enough staff to meet the higher demand, and that your systems can handle the growth. You also need to check you have the budget to buy everything needed to reach your growth target. If you don’t, your target will be impossible to reach.
Push Yourself (But Keep Targets Within Reach)
A good target for your business growth should be possible with a bit of hard work, so don’t shy away from pushing yourself slightly. Though there’s no point setting goals that are impossible to achieve, there’s nothing wrong with stretching yourself a little bit. Go slightly beyond what your team is used to, whilst still making sure your targets are realistic.
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As a business owner, you need to plan ahead. This means setting growth targets, which help your business to stay on track, stay focused and measure progress. But, that doesn’t mean setting unrealistic growth targets and hoping you might, if you’re lucky, reach one or two. Though ambitious goals can help you to stay motivated, they can quickly hold you back if they’re not also realistic.
