Many entrepreneurial people are looking at the possibility of starting an online business. Perhaps you are one of them. Or maybe you have an online business going, but it feels as if it’s stagnated.
Studies have shown that the most significant barrier to overcome when starting an online business or putting new life into an existing one is to formulate the right goals.
If you are coming from a corporate background or were employed by a business, you are likely used to short-term goals as set by your employer. However, when running your own online business, you need long-term and short-term business goals and targets.
It always takes a lot of effort and consultation to set the right goals. Read on to find out about setting business goals for your online business.
The first step to start an online business is to get your business plan in place. If you have an online business and feel you’ve been on a plateau too long, it is always good to look at your plan again.
A business plan is a written document describing, among other things, the nature and objectives of your online business. Your financial projections are also written into the document in broad terms. The goal-setting process is an integral part of this plan.
Goal-Setting Process for Your Online Business
When you read about goals for online businesses, you can become confused by the terminology. It seems as if everyone uses different terms to describe the same principles.
Meysam Ghanbari, a senior business analyst at Qantas, puts the difference between a long-term goal and a short-term goal in perspective.
According to his categorizing, long-term business goals are the broad primary outcomes of your online business. They describe the ‘what’ and not the ‘how.’ Your online business can have multiple long-term goals.
For example, one goal can be ‘we must be a leading online distributor of product ABC in the country,’ and another related goal might be ‘we must have a network of online affiliates distributing our products.’ Usually, there is no measurement built into a long-term goal. It only gives you the general direction your online business is going.
Ghanbari indicates that short-term goals (which he calls ‘objectives’) differ from long-term goals because they are measurable and specific. Short-term goals quantify the long-term goals and set targets. It can be said that short-term goals are the description of the measurable steps your online business will take to achieve your long-term goals. For example, ‘increase the number of affiliates at the end of every month in 2021 by 2%.’
Don’t get confused with the ‘long-term’ and ‘short-term’ terminology – just remember that the long-term goals describe the general direction you want your online business to go, while short-term goals describe the steps to achieve your vision.
Starting Your Online Business
It is good to know the theory about goal-setting and measurable goals, but you must now take action to start your online business. To formulate the goals, you have to have a clear idea of why you are starting your online business and what you want to achieve.
1. Write Down Why You Want to Have an Online Business
Your first step is to sit down and write down why you are starting with an online business and be honest with yourself. This forms the basis of your long-term goal formulation. If you know why you are starting your online business, you will be able to write down what you envisage for your online business’s situation over a period of time (your goal, in other words).
Generally, your vision is about the situation 3 to 5 years later. However, with online businesses and the rapid development of new software and apps, it is better to plan for only 2 to 3 years. Also, be prepared to change your vision when revolutionary new digital options become available.
At this stage, don’t worry about how you are going to achieve your vision; you are just telling yourself what end results you have in mind.
Take your time with this part of your preparation for your online business. If the foundation is not correct, you will not succeed. Talk to others and ‘test’ your ideas until you are satisfied that you know why you are doing it and what your vision is.
2. Formulate Your Goals (Long-Term)
Perhaps you have only one long-term goal: to be a leading online distributor of product ABC in the country. If that is the case, write this down as your goal. If your vision includes more than one goal, write them all down.
It is important to remember that all your further planning will only be in line with your original goal(s). You will plan how to achieve the ‘what’ in your goal. Anything not contributing to that will be a waste of your time and money.
3. Formulate Your Short-Term Goals
According to studies done by Edwin A. Locke, a retired University of Maryland professor and pioneer in goal-setting, and Gary Latham, a Fellow of the Royal Society of Canada, specific and ambitious short-term goals produce better employee performance improvement than general easy goals.
They recommend that short-term goals must be specific, time-constrained, and challenging. Difficult goals must be set at the 90th percentile of performance. You have to assume that motivation and not ability is the limiting aspect.
This must be the point of departure whether you are running a one-person online business or have employees with each their own performance goals and working on their individual goals.
To make it easier to execute the short-term goals and targets, ensure that you make the goals as simple as possible. Don’t combine marketing and sales outcomes in one goal. But don’t start with sales goals and forget about marketing goals.
When setting short-term goals, work with the well-known SMART concept:
S – Specific – state exactly what has to be done
M – Measurable – use concrete numbers and figures
A – Actionable – keep it to measurable actions
R – Realistic – difficult, but realistic, with an expected 70-90% success rate
T – Time-bound – set reasonable time-frames to prevent frustration
Strategy and Tactics
With the long-term and short-term goals in place, you can start planning your strategy for your online business. Strategy is your approach to customers to buy your products or services. It is about the ‘how’ and not the ‘what.’ Tactics are the actions or tools you use to achieve the objectives associated with your strategy. They are the ‘whats.’
The Whole Process in Summary
In summary, the goal-setting process is as follows:
- Clearly define your reasons for starting your online business
- Visualize how you want your online business to be over 2 to 3 years
- Formulate your long-term goal(s), e.g., ‘we must be a leading online distributor of product ABC in the country’
- Formulate your short-term goals, e.g., ‘we must reach 10,000 potential online buyers of ABC per month,’ and ‘we must get 100 more customers buying ABC online per month’
- Get your strategy in place on how you will market ABC online, e.g., with website, social media, and advertisements on other websites
- Start with the tactics to place the content on the different media
What are the Different Types of Business Goals?
Apart from distinguishing between long-term and short-term goals, there are different types of goals.
- Day-to-day work goals are aimed at increasing your online business’ everyday efficiency
- Problem-solving goals address challenges that confront your business. These goals are set when problems arise and are only valid until the issues are resolved
- Set development goals for yourself to encourage you to develop new skills. As with problem-solving goals, these goals change over time as your skills and expertise change
- Your innovation goals are for you to find new ways to provide better services and market your company
- Your profitability goals are essential as any online business’s number one goal is to be profitable
Why is it Essential to Set and Track Business Goals?
If you don’t set goals, you don’t have any measurement tool to determine whether your online business performs efficiently. As short-term goals are measurable and time-bound, they’re the ideal tools to use.
Why Should You Develop Employee Goals?
When online businesses employ people, they are generally working remotely. It is essential to develop goals for each employee to ensure that they know what is expected from them.
Sometimes it may seem a waste of time to go through all the steps to plan your online business before you start, but planning and setting goals are the foundation you will build your business on. The better the planning and goal-setting, the more efficient your online business will be.