It is widely accepted that good goals are SMART goals. SMART is an acronym for specific, measurable, achievable, relevant, and time-bound. SMART goals are used widely in employee performance reviews and in strategy sessions in the corporate world. What many entrepreneurs fail to realize is the application of SMART goals can simplify and change the effectiveness of writing a business plan.
This article will review how to apply SMART to the biggest sections of a business plan: the market research section, the financials section, and the launch schedule section. Some perspectives imply that SMART goals be applied singularly to an issue or goal. For instance, being specific about what business you want to start, then creating a measurable way to track website traffic, an achievable marketing goal, etc. In reality, all components of SMART should be applied in parallel to a core goal or topic in order to be most effective. The following will explore applying this in a practical way that helps create a more powerful and actionable business plan.
Writing A Business Plan With SMART Market Research
Market research in a business plan is usually the place where entrepreneurs get lost. Quickly, they realize there are mountains of information available about their industry or business realm. Dozens of pages later, they think they have completed market research for their business plan.
The reality is, market research should be summed up in about two to three pages, maximum. If this section is any longer, it is probably full of too much information that does not directly impact the business. However, even more important than having an effective length is that the market research section should end with one to three SMART goals. This means your market research chapter should have actions, goals or next steps that relate to what you’ve learned from the market research. Similar to a conclusion paragraph in an essay, you must summarize why all of these statistics, trends and facts matter.
To show why the data matters, explain how the information will be turned into actions by your organization. Will it be used to guide specific goals for your marketing campaigns? Will it drive decision making for changing your prices? Will this new awareness of your industry influence any component of your operations? Get specific and set SMART goals at the end of your market research section in your business plan to conclude that information and make it useful to your business.
Writing A Business Plan With SMART Financials
Hangups occur in the financial section as well. Typically, the idea that forecasts can be right or wrong is where entrepreneurs get derailed. You need to remember that financials will always be wrong. You can never create perfect financials because you cannot predict the future perfectly. However, you can create SMART financials that increase your odds for profitability.
In financials, revenue and costs should each be looked at from a SMART perspective. In revenues, be specific about your revenue goals. What precise revenue streams will generate income for your business? List them, no matter how big or small a role they play. With those revenues, what measurable impact will each income stream have by percent of overall income? Are those revenues achievable based on what you currently have laid out in the business plan, or do they assume additional costs or operational structure? Do each of those revenue streams seem relevant to your core business offering, or are some of the streams beyond your main goals for what you will become best known for providing? When considering whether your revenue goals are time-bound, ask whether you can feasibly launch all revenue streams from day one or if you will need to stagger when each revenue stream goes live in the business.
Consider applying this same mindset to your costs. Ask yourself whether your cost assumptions check out as being SMART projections. Get honest about whether you need to tweak some expectations or get more specific about any preliminary estimates.
And remember, there is no such thing as perfect. However, the more reasonable and realistic you can get, the better. This will increase your chances that your numbers will at least be in the right ballpark.
Writing A Business Plan With A SMART Launch Schedule
The launch schedule for a business plan should be outlined by quarter. This is something most first-timers overlook but is critical to include. List the actions your business needs to complete every three months for the next 12 months. Then make it a SMART launch schedule by adding one overarching goal to each quarter.
For instance, perhaps your first quarter includes creating a website, setting up business profiles on social media and generating a digital footprint that targets certain audiences. The SMART goal for quarter one may be “secure digital awareness that results in 500 website visitors every month.” This is specific, targeting a certain number of website visitors. This goal is measurable, with the audience size of 500 being the target. This is achievable based on your action steps outlined in the schedule, assuming you complete them all strategically. This goal is relevant as long as it directly impacts sales, brand awareness or profit margins. This goal is naturally time-bound because it’s a goal for a specific quarter.
It is easy to think about SMART goals hypothetically, but applying them to a business plan requires you to step back and strategize. The best way to do this is usually by brainstorming with someone on the outside who has no knowledge or personal investment in your business. Work with them to get an unbiased opinion on what SMART goals would apply to the market research, financials and launch schedule sections of your business plan. This will increase your odds for highly impactful SMART goals that create a highly impactful business plan, which increases your odds of success.
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