People start businesses because they want to achieve something with that business. The end result or dream is different for each person; some want to earn more money than they can earn by working for someone else, some want increased freedom in how they use their days, and some just have an innate desire for independence and adventure. But they all have one thing in common—they all have a dream that motivates them to start the business.

Your decision to create a business is just the beginning of your entrepreneurial journey. Once you embark on that adventure, you must then make thousands of small decisions in order to run the business on a daily basis and make the business successful. In the midst of those decisions, you might get caught up in the details. You might become distracted by the daily work required to keep a business going. And sometimes, you might get so focused on the daily decisions that you lose sight of the overall goal—making the business successful enough to help yourself accomplish the dream that motivated you to be in business in the first place.

Business goals can help you stay on the path toward financial success. They serve as reminders of the larger dream and, if used properly, help guide daily decisions and actions. They bring purpose and direction to the smaller decisions.

The Goal-setting Process

Skilled goal setters know that merely setting a goal does not guarantee the accomplishment of that goal or bring the desired results of meeting that goal. Once a goal is set, it needs to be reviewed often enough so that the desire to accomplish the goal is reinforced in the mind of the goal setter. Progress toward the goals needs to be measured frequently (even daily, if possible) so that the goal setter knows how much work is yet required in order to meet the goal. And goals need to be adjusted as circumstances require. Sometimes we set goals that are either too hard to achieve or too easy; those kinds of goals do nothing to help motivate us and should be revised.

Characteristics of Good Goals

Effective goals share five important characteristics. Good goals are:

Specific. They are detailed so the goal setter knows when he has accomplished them.

Measurable. They are concrete, and progress toward them can be measured objectively.

Attainable. They are challenging but reasonably within reach of the goal setter.

Realistic. They are both practical and useful.

Time-bound. They have a time limit attached to them.

The following goals are examples of SMART goals:

• I will generate an additional 500 pesos each week so that by April 15, I can hire one
  more employee.

• I will increase my product line by one item per month until the end of the year.

• I will promote my business better by talking about it to five new people each day (e.g.,
  strangers on the bus or people who attend church with me).

Research indicates that goals that are written down are more likely to be achieved than goals that are not written down—goals that are recorded only in the goal setter’s mind. People who write down their goals are largely in the minority. But they generally accomplish more and earn more money than people in the majority who do not write down their goals. Why is this? Probably because the process of actually writing something on a piece of paper helps us make more specific goals, increases our dedication to the achievement of those goals, and places the goal in our long-term memory. And perhaps most importantly, the act of writing down a goal gives us a document that we can review often as we track our progress toward the goal.

Short-term and Long-term Goals

As a business owner, you should have both short-term and long-term goals in order to push your business toward success. Short-term goals guide the daily actions of the business and establish successful patterns that help the business in the long run. Such goals might include increasing the number of customers served each day, obtaining an average sale amount of 200 pesos, or convincing each customer to purchase additional items every time he comes into the store (i.e., upselling). These goals must be tracked daily and weekly to gauge progress.

Long-term goals can help you see how your daily actions lead to the overall success of the company. Long-term goals are more strategic in nature and are not accomplished on a daily or weekly basis. Examples of long-terms goals include increasing total sales by 10,000 pesos each month, or acquiring one new line of complementary products every four months.