It's excellent that you're interested in starting up a business, but without having financial objectives/setting business aims first, you're destined for failure.
Regardless of the industry you're looking to get into, the business landscape is an inherently competitive space to gain market share, one where having a clear sense of direction isn't just desirable — it's actually essential if you want to achieve any sort of success.
In reality, it's not dissimilar to setting off on a walk without even knowing where it is you're going. Sure, there's a chance you might stumble into somewhere beautiful by accident, but more often than not, it's just going to lead to confusion, missed opportunities, and an overall waste of your resources.
This is generally why it's so crucial to smart objectives/business aims whenever you're entering into a new industry. And if not merely because they serve as a kind of compass that guides your company in the right direction, a clear business objective also helps keep your employees focused and working collectively towards a common purpose.
So, whether you are trying to establish some basic financial aims or simply looking for some business planning advice, we'll be covering all you need to know to give you and your team the foundation you need to excel.
Let's kick things off by gaining a clear understanding of what your business's underlying objectives actually are.
Understand Your Vision and Mission
If you look at any major or otherwise successful business, you'll notice that there's always some kind of compelling vision or resonating mission at the heart of them.
Ultimately, this statement is the thing that's going to encapsulate your aspirations and what it is you actually stand for — you're trying to create a vivid image of what your company wants to achieve in the long run, the dream you're working so tirelessly to turn into reality.
Sure, every company's main priority and financial objective is to make as much money as possible, but you can only ever go so far by just being motivated by cash; you need a kind of mission statement that properly defines the core purpose of your business — the reason your business operates beyond the main financial aim.
Let's think of a few hypotheticals to help illustrate this point a bit clearer. For instance, think of a new business that has an overall business aim of revolutionising the way we package various goods — a company that's conscious of sustainability and is on a mission to reduce how much plastic we waste globally.
Now, try to picture that business setting a medium-term aims to stop using single-use plastics in their packaging within, say, the next five years. Rather than just setting some arbitrary numerical target, they're taking a step toward fulfilling the broader mission of the company — to change the way goods are being packaged.
As such, this creates a target that's turning the dream of sustainable packaging into a reality that ultimately aligns with the core mission of reducing plastic waste.
As another example, let's take a look at a real company whose non-financial aims very much align with its overall tenets as a business, Patagonia. If you're unfamiliar, Patagonia is a clothing company that specialises in outwear and hiking equipment.
The thing about Patagonia is that they're well known for their overall commitment to environmental sustainability, making them a strong example to showcase the power of weaving aims and objectives into the fabric of your business, especially when it's so closely related to the product you're selling.
Because Patagonia is dedicated to producing high-quality clothes while trying to reduce its ecological footprint, it's not only shaped its objectives but has also given it a strong reputation and image from eco-conscious customers across the world.
Specificity Breeds Success
Now, when it comes to actually setting your company's aims and objectives, you're not going to make it if these are just vague aspirations and hopes — it's tangible, specific objectives that we're looking for here.
For instance, saying something as basic as “we want to increase sales” doesn't exactly scream success; obviously, your business wants to increase sales. Instead, note how something dynamic, like “we aim to increase our monthly sales revenue by 15% within the next quarter”, is a far more precise way of approaching the same overall objective.
Now that you're being specific about your targets, you have much less ambiguity, which generally makes it easier to achieve business aims since everyone involved understands the target and is working towards achieving it.
One of the more popular frameworks businesses like to use is SMART for a smart business goals, an acronym standing for Specific, Measurable, Achievable, Relevant, and Time-bound. As you can see, every aspect of this framework is geared towards crafting an effective objective.
Going back to our previous example, having a target like “increase customer satisfaction” now becomes something like “raise our customer satisfaction rating by 10 points within six months” after using the SMART framework.
As a result, you're not only setting a clear goal now, but you've also got a tangible way of measuring your progress.
Prioritise and Segment
It goes without saying that some of your business goals are going to be more important than others — you shouldn't focus on trying to marginally improve customer satisfaction scores if you haven't even attracted a core consumer base yet.
Naturally, you're going to have less time and resources to allocate when you're just starting out as a business, so targeting the objectives that contribute the most towards your business's growth is always a good place to start.
This is where the concept of segmentation comes in handy. For example, imagine you're in the hospitality industry and are looking to improve your customer's experience while staying with you. This is quite a broad aim, so instead of approaching it like one overwhelming goal, it's best to segment it into a few manageable parts.
This means breaking it down into separate areas — customer service, offering online booking, and room amenities, for instance. So, not only are you now creating a much clearer action plan for your business, but you are also able to celebrate a few small victories along the way as you tick off all the areas you've invested in and ultimately improved.
Although it can feel slightly unambitious to celebrate small achievements like this, the fact of the matter is that they serve as a kind of motivational boost that keeps your team engaged and acknowledged. Ultimately, one day they'll act as evidence of how far you've come and how all the hard work has paid off.
Monitor, Evaluate, and Revise
To wrap things up, it's worth acknowledging that while you might spend a lot of time thinking of the right business objectives, they require fairly regular checks and adjustments, so you can be sure you're still heading in the right direction — it's no use stubbornly adhering to a business aim you set months ago if it's not showing and rewards, running a successful business is all about pragmatism.
Having said that, don't be disheartened if you feel there are areas where you're falling short. The best businesses flip them into a positive, viewing them as valuable information that sheds light on what needs to be improved.
Because you're taking the time to evaluate, you'll not only be able to see what's actually working, but you're also able to pinpoint any bottlenecks that could be slowing your progress down, letting you fine-tune your efforts as needed.
