As a small business owner, setting objectives is a key part of your company’s success—both now and in the future. Business objectives not only help you envision the results you hope your company will achieve, they enable you to map out a plan to accomplish them. The following guide will help you understand what business objectives are and how to create personalized objectives for your own business plan. You’ll also discover why not setting business objectives can be a dangerous small business mistake to make. What Are Business Objectives? Business objectives are written statements that define results you want your company to achieve and detail how and when it will achieve them. These objectives typically focus on key areas (i.e., growth, revenue, productivity, operational efficiency, etc.) that can bring you closer to your long-term business vision. A successful business objective should keep you and your employees motivated and focused. And there’s nothing wrong with a goal that’s a bit of a challenge. At the same time, the most effective business objectives are specific, measurable, achievable, relevant, and time-bound. (More on that below.) Benefits Of Business Objectives There are many reasons why you should consider incorporating written business objectives into your own business plan. Whether you’re a small business owner running a one-person startup or you’re managing a fast-growing company, business objectives could help you: Provide your company with a sense of direction Motivate business owners and employees Boost employee retention Increase business revenue Improve workplace productivity Enhance company culture Provide a mechanism to measure performance Enhance customer service Improve company reputation How To Set Your Business Objectives Different businesses tend to have different approaches to the business objective-writing process. And this process may evolve over time as your business grows. If you’re setting business objectives for the first time, the four steps below are a good starting point. Step One: Identify What You Want To Achieve And Why For each business objective that you set in your business plan, it’s important to begin with a brainstorming session to identify what it is that you want your company to accomplish. During this process, remember that there’s a difference between goals and objectives. A goal might look something like, “We want to be the largest home remodeling company in the greater Chicago area.” And while there’s nothing wrong with setting a goal, what makes the previous statement fall short of being an objective is that it isn’t specific, measurable, or time-bound. An objective, on the other hand, might look like, “We will boost revenue by 20% by the end of 2023 by partnering with five new referral partners.” As you brainstorm ideas for your business objectives, consider asking employees to contribute ideas. You’ll likely come up with multiple objectives that you can work to narrow down to the most important categories you want to focus on for the upcoming year. Step Two: Consider Your “Why” Before you finalize your business objectives, it’s important to identify or keep in mind the underlying reason why you want your business to thrive in the first place. You can discover your “why” by answering the following question: What is it that drives you to succeed? Perhaps you’re working to make a difference in your community. Other small business owners may desire to provide financial stability for their families and employees. Some entrepreneurs dream of financial freedom or an early retirement. Whatever your definition of success looks like, make sure that your business objectives support these overarching goals. Step Three: Get Organized At the end of the brainstorming process, you may begin to notice patterns of overlapping information. Numerous goals, for example, might pertain to increasing business revenue and profits. You might have several ideas on how to improve customer satisfaction, employee productivity, marketing reach, sales, and more. If you try to implement too many changes at once, you and your staff could become overwhelmed. However, it might be possible to combine common ideas together to create enhanced business objectives that are better than they were in their original form. Step Four: Write And Review As you sit down to write, remember that each business objective needs five components to be effective. A business objective should be SMART: Specific Measurable Achievable Relevant Time-Bound When an objective is specific, anyone reading the business plan understands what the business is working to accomplish and who is responsible for each role in the process. The more details you can provide, the better. A business objective should also cover how success will be measured. How will the business owner, employees, stakeholders, and others know if the business is on track to reach its goals? An achievable business objective is realistic. Again, it’s fine to stretch yourself and your team. But you should also consider employee morale and avoid setting expectations that could discourage rather than motivate. Relevant business objectives focus on the mission of the organization. Additionally, make sure you assign the right responsibilities to the right team members as you work toward accomplishing goals. Time-bound objectives set a deadline. Without a date in mind for when you want your business to reach the goals it has set, you’ll never know if you cross the finish line on time. Business Objective Examples Now you have a basic understanding of how to set business objectives for your business plan. Here are four examples of business objectives in different categories. Example #1: Customer Service Business Objective Our business will reduce customer complaints by 25% this year. To accomplish this goal, we will hire three new team members to decrease time spent on hold for customers, add an online chat support option, and invest in training to help our staff manage angry customers. Example #2: Revenue Business Objective Our company will increase overall revenue by 20% this year. To accomplish this goal, we will introduce a customer referral program and sales bonus opportunities for all employees in Q1. We will also conduct surveys to find out how targeted customers discovered our brand in the past and increase marketing spending in those areas by 25%. Example #3: Online Brand Awareness Our business will boost brand awareness by doubling our number of Instagram and/or TikTok followers by the end of the year. To accomplish this goal, we’ll hire a full-time social media manager and dedicate an additional 10% in marketing dollars to social media campaigns and advertising. Example #4: Improve Employee Retention Our company will reduce employee turnover by 40% this year. To accomplish this goal, we will implement a new employee incentive program by the end of Q1. We will also schedule bi-weekly meetings between employees and managers to give team members an opportunity to discuss frustrations and strengthen relationships. Bottom Line There are many tips and tools you can use to grow your small business. Yet, creating solid business objectives should be at the top of your list. Whether your business is brand new or has been around for decades, taking the time to define where you want your business to go and how you intend to get there can be a powerful exercise. Creating business objectives for your business plan may also benefit you when you apply for certain types of business loans. And even though some lenders might want your business plan to focus on how your business intends to use the funds it borrows, the more details you can provide about your company’s future goals and objectives, the better.