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Understand your small business goals

Goal setting in business terms refers to the development of an effective action strategy tailored to guide and motivate both managers and employees of a business towards certain goals. Setting long and short-term goals is one of the most important aspects of running any business and more so for SME and start-ups.

Business goals are the cornerstone of any SME’s operations and should support a business’s long-range objectives. Here is a comprehensive account of the importance of goal setting for an SME.



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Set and manage your goals



Extensive research conducted by Edwin A. Locke revealed that goal setting in business significantly improved the performance of employees and consequently the business at large. This effect is compounded when the employees are involved in the goal setting process.

This is vital for SME’s and startups since the employees are the main driving force for progress in business at this level. SME’s and startups will have fewer employees than large businesses and underperformance on a few employees’ parts takes a greater toll on the businesses.


It is a well-documented phenomenon that a large percentage of SME’s often fail within the first few years of operation. In today’s extremely competitive business world, running an SME can be a daunting task and without commitment, many entrepreneurs would not even get off the starting line. Acceptance of defined goals is important in keeping managers and employees committed especially to longer-term objectives.

Strong feelings of commitment aid in intensifying stakeholders’ persistence and dedication to put in the extra effort needed to improve working performances. Also, the acquisition of additional skills is hastened when the level of commitment is high. These extra skills are fundamental in the completion of particular tasks thus benefiting the business. Goal setting if conducted tactfully can lead to additional expertise even with limited personnel.


Every manager knows that the key to keeping employees happy is keeping them motivated. A happy employee always translates to better experiences for the customers. Small businesses and startups rely heavily on word-of-mouth marketing to take off and as such, motivation is vital for a small business to realize success.

There are two key ways that goal setting can bring about motivation. First, it results in an ego-boost when some short-term goals are achieved. As each stakeholder in the small business accomplishes a set goal, they gain a sense of satisfaction and well-being when they carry out their tasks.

Secondly, being included in the goal setting process fosters a sense of belonging and integration within a group. As the business grows, each individual will develop the notion of being part of a team set on reaching a defined objective due to the dedicated efforts of each individual.


A study by CB insights revealed that loss of focus was one of the main reasons why many startups fail. Without set goals, distracting projects easily sidetrack managers and employees alike. The setting of goals thus serves as a directional function.

Set goals drive the actions and attention of managers and assistants towards an objective. As a result, each individual is able to determine what is productive and what is not in regards to the said objective.

It is important to note that there are four main categories of goals that are essential to the success of small businesses and startups. These include regular work goals, problem-solving goals, development goals and innovative goals.



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