Startup success means getting your new business to where you want be in terms of factors such as product, market share, profitability, team and others. But as a founder, how will you know that you’ve arrived if you haven’t defined the metrics that equate to “startup success” for you. Antoine de Saint-Exupéry once said, “A goal without a plan is just a wish.” Using SMART objectives can help your startup achieve startup success by defining a clear plan with measurable metrics to mark progress along the way.
In starting a new business venture, entrepreneurs usually have goals. These can be easy to set, but hard to achieve because by their very definition, goals are broad but short on specifics. For example, a startup can have the goal of “being profitable within 12 months,” but this simple goal doesn’t include any metrics the founder can use to measure progress along the way. To really achieve startup success, a founder MUST be able to measure company’s progress as it moves forward. And if the startup requires outside funding of any sort, then metrics are absolutely essential.
Nonetheless, startups continue to be challenged with setting specific targets, and finding a way to integrate talent and resources that lead to concrete results. You might have brilliant ideas, but without a definite plan to bring them to life, your new business venture will not likely achieve startup success, no matter how great the idea.
SMART (Specific, Measurable, Assignable, Relevant and Time-based) goal setting is essential to keep everyone on track and engaged. The concept was popularized in the 1980s by George Duran. It is one of the most effective tools for achieving goals and ultimately, startup success. Setting SMART objectives can guide growth, ensure accountability and keep your startup on a solid footing for achieving startup success.
Below is an overview of what SMART objectives are and how they can help your new business venture achieve startup success:
- Specific: The first criteria is specificity. According to studies, those that have exact objectives rather than unclear ones have a much greater likelihood of accomplishing them. You need to define what you want to get, and not just speak in general terms. For example, you can have the goal of “increasing sales,” but this is not specific. The first step in building a SMART objective is to be specific by saying something like, “double last year’s gross revenue.” Now you have the goal of “increasing sales” and part one of a SMART objective (double last year’s gross revenue).
- Measurable: The second is to ensure that your objective is measurable. During this stage, it’s important to ask: How will progress be measured? You need to be able to quantify what it is that you want to accomplish. Being vague or unclear doesn’t do anyone any good at all. In order to measure progress you need create some benchmarks. This can help you determine when they have been met or what needs to change to reach them. To that end, the next question in building a SMART objective is “can we quantifiably measure this?” In the case of doubling last year’s gross revenue, the answer is yes, this is measurable.
- Assignable: The third step is to ensure that attainment of the objective can be assigned to an individual or team within the startup. The question to ask is “is the objective of doubling last year’s gross revenue assignable to an individual or a team?” If the answer is yes, then you can move on to step four.
- Realistic: The fourth step is ensuring that your objective is realistic. It’s important to recognize that your startup has limited resources and material constraints. Set targets that you can reach. These will shape your strategy for its growth. Once you do this, you can better position your business to work according to its strengths and take advantage of available opportunities. The question to ask here is, “is doubling our revenue attainable?” If you think it is, then you’re good.
- Time-Based: The final stage involves setting target dates for accomplishment of your objective. This is critical to achieving startup success. These deadlines allow you to monitor work accomplished. It also encourages accountability.
With these steps in mind, the final SMART objective example we are using could read, “Within 12 months, double last year’s gross revenue.” This objective meets all the criteria to be SMART. It is specific (double last year’s gross revenue); it is measurable (you have last year’s baseline); it is assignable (it can be assigned to a team or an individual); it is realistic (doubling last year’s gross revenue is within the realm of possibility); and it is time-based (within 12 months). Note that there are variations of the SMART objectives methodology. For example, the United Way (and many nonprofits) define SMART as Specific, Measurable, Attainable, Realistic and Time-Specific. You can use any version you like–just choose the one that works best for you.
The incorporation of the SMART objectives method into any startup venture that wants to succeed is the right way to proceed. Making use of the talent and resources to integrate this method into decision-making processes will help get things done much more effectively and help your new business venture achieve the startup success it deserves.