Setting business goals, aims and objectives can help grow your business. Learn how to create a mission statement and use PESTEL and SWOT tools to create your business objectives.
Having a strong purpose is essential for any new business.
A clear mission, supported by strategic business aims and objectives, will give your business a better chance of success opens in new window.
Setting business aims and objectives should be a priority for any business, even ones that have been trading for a few years.
While most business start ups focus on their goals when launching opens in new window, it’s common for companies to let strategy, business aims and objectives drift over time.
Setting business goals is a hard process, and involves looking closely at how your company operates and defining a clear vision of how you want your business to look in three to five years’ time.
There are lots of benefits for defining business aims and objectives.
Commercially they can help your business outperform competitors and the market opens in new window.
A 15-year-study that underpinned the book Firms of Endearment found that purpose-focused businesses outperformed the market 14-to-1 compared to businesses that lacked purpose.
Employees working towards a clear business vision are up to 30% more productive, according to research by Southampton University.
Setting a clear strategy with business aims and objectives allows you to look at external factors such as new legislation opens in new window or new competitors entering the market.
Business objectives are good for employees too, helping build a culture of collaboration opens in new window and ensuring everyone buys into the aims of the business and where it is going.
Set business goals and objectives at least annually, and focus on three areas – aims, goals and objectives.
All three are different and link together to form a cohesive plan for your company.
- Business aims – The long-term strategy for the business. It can be expressed as a mission statement, company values and the purpose of your company. Having a clear vision lets you set strategic goals and supporting objectives to achieve this aim.
- Business goals – These are more strategic goals, usually expressed in terms such as increasing market share opens in new window, and are set over a three- to five-year timeframe.
- Business objectives – Determine the actions you’ll take to achieve business goals, usually with success measures and targets.
Starting a business doesn’t come with a set of instructions.
We know that understanding the many different types of financial product in the marketplace can be difficult.
Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.
Create the aims of your business
You’ll first need to define the point of your business – what is its purpose, why does it exist, and what does it want to achieve?
For start-ups this is usually the reason why you founded your company.
It might be to deliver excellent customer service opens in new window, to sell locally-sourced sustainable products opens in new window or to offer 24/7 access to a safe taxi service for example.
This is often expressed as a mission statement or company vision – it details why your business is here, what it stands for and what it aims to achieve.
It should bring the values of your company to the forefront, such as friendly, secure, caring, and knowledgeable.
These values also determine the types of actions and objectives you’ll need to do and how to do them so you remain caring, friendly, and knowledgeable.
You can create your mission statement and vision as an elevator pitch opens in new window.
This is usually written as a paragraph that sums up your vision and should be able to be delivered in 30 seconds. It should be simple and clear.
Business aims example
A great business aims example is the mission statement created by Sweetgreen, a US-based restaurant:
“Sweetgreen is a destination for delicious food that’s both healthy for you and aligned with your values. We source local and organic ingredients from farmers we know and partners we trust, supporting our communities and creating meaningful relationships with those around us. We exist to create experiences where passion and purpose come together.”
It tells us what Sweetgreen is and stands for, what makes it different, its values and why it exists.
Set long-term business goals
Armed with your mission statement you’ll need to define your long-term business goals.
These should span three to five years and be expressed as a series of goals you want the business to achieve, such as increase brand awareness opens in new window, capture market share, increase the size of the business and improve customer service opens in new window.
There are lots of business tools that can help set goals, including BHAG, ACES, SWOT, and PESTEL (sometimes written as PESTLE) – including how they are used with business aims examples:
1. BHAG – Short for Big Hairy Audacious Goal, an idea found in the book Built To Last: Successful Habits of Visionary Companies. It’s a long-term goal that you’d be willing to bet the business on. Examples include Microsoft’s ‘a computer on every desk and in every home’ and Google’s ‘organise the world’s knowledge and make it universally accessible and useful.’ It can be used to focus your company’s actions onto this clearly defined goal.
2. ACES – Short for Achieve, Conserve, Eliminate and Steer Clear of. Achieve is a list of what you want to attain in the future such as open two restaurants in your county. Conserve is what you want to keep, such as locally sourced ingredients and farmer relationships. Eliminate is what you want to lose, such as reducing food waste. Steer clear of what you want to avoid, such as losing valuable staff.
3. SWOT – Short for Strengths, Weaknesses, Opportunities and Threats. List elements of your business, competitors and market changes under each category so you can assess where your business sits, the challenges it faces, and its strengths or weaknesses in capitalising on opportunities or responding to threats. Virtual Strategist’s Erica Olsen has created a guide to creating a SWOT analysis opens in new window for your business:
4. PESTEL – Short for Political, Economic, Social, Technology, Environment, and Legal. Under each heading list factors and developments both recent and potentially happening in the future, then examine how these will effect your business and its future.
Create a list of long-term business goals – 5-8 goals are good for a newly trading business – and express them as statements that you want to achieve over the next few years.
For example, increase revenue by 50% and profit by 20% over five years, or attract and retain the best employees opens in new window to increase retention by 30% and becoming the number one place to work in your area.
Set short-term business objectives
Short-term business objectives typically apply to the actions and objectives you want the business to achieve in the financial year.
They should work together to help you achieve the longer-term strategic goals.
Objectives focus on what your company will do to get there and are usually described as numbers and targets.
They should be able to be allocated to teams and individuals to carry out, with milestones and targets to achieve.
One of the most useful tools to help set the right objectives is to set SMART objectives, short for Specific, Measurable, Achievable, Relevant, and Time bound.
- Specific – Objectives should target a defined area, such as customer service or marketing opens in new window.
- Measurable – What are you trying to change? How do you measure it? Set a target to achieve over the next 12 months.
- Achievable – Make sure the objective is stretching but possible. Too hard an objective is demotivating and can prevent staff from seriously attempting it.
- Relevant – Ensure the objective makes sense to the specific area it is focused on and how it is aligned with your longer term goals.
- Time bound – Make sure the objective has specific time periods or deadlines applied, such as to achieve a target within 12 months or by a certain date.
An example SMART objective for a restaurant chain could be to increase customers by 10% over the next 12 months compared to the previous financial year, with customers increasing spend by 20% to an average of £25 per head.
Collaborate on business goals with employees and stakeholders
Building goals and objectives is a great way to involve your staff, working with them to define the goals and objectives.
Staff who feel they have a say in defining goals and objectives are more willing to own them and work towards achieving them.
They also bring in lots of insights – such as conversations and feedback from customers – that will be useful in setting the right objectives.
Involving your team will also ensure you don’t set objectives that are impossible or alternatively not challenging enough.
Use workshops, meetings, 1-2-1s and team sessions to build objectives.
Start by explaining the broader longer-term goal, then work together to agree the types of actions needed to achieve these goals.
Workshops can also be used to prioritise and allocate objectives between employees or explore things that could get in the way of achieving objectives.
Monitor and measure progress
Once your business objectives have been set, invest time in ensuring they’re regularly monitored and that progress is measured.
At a minimum create a checklist of objectives and regularly review progress against them – though you can use online project management tools such as Basecamp and Teamwork to list all the goals, actions, and targets and who is responsible for them.
Hold regular review meetings for the team to share progress against targets and use the time to discuss actions needed to ensure that the company meets its business objectives.
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