What are SMART Goals?
Goals are part of every aspect of business/life and provide a sense of direction, motivation, a clear focus, and clarify importance. By setting goals, you are providing yourself with a target to aim for. A SMART goal is used to help guide goal setting. SMART is an acronym that stands for Specific, Measurable, Achievable, Realistic, and Timely. Therefore, a SMART goal incorporates all of these criteria to help focus your efforts and increase the chances of achieving your goal.
SMART goals are:
- Specific: Well defined, clear, and unambiguous
- Measurable: With specific criteria that measure your progress toward the accomplishment of the goal
- Achievable: Attainable and not impossible to achieve
- Realistic: Within reach, realistic, and relevant to your life purpose
- Timely: With a clearly defined timeline, including a starting date and a target date. The purpose is to create urgency.
Specific SMART Goals
Goals that are specific have a significantly greater chance of being accomplished. To make a goal specific, the five “W” questions must be considered:
- Who: Who is involved in this goal?
- What: What do I want to accomplish?
- Where: Where is this goal to be achieved?
- When: When do I want to achieve this goal?
- Why: Why do I want to achieve this goal?
For example, a general goal would be “I want to get in shape.” A more specific goal would be “I want to obtain a gym membership at my local community center and work out four days a week to be healthier.”
Measurable SMART Goals
A SMART goal must have criteria for measuring progress. If there are no criteria, you will not be able to determine your progress and if you are on track to reach your goal. To make a goal measurable, ask yourself:
- How many/much?
- How do I know if I have reached my goal?
- What is my indicator of progress?
For example, building on the specific goal above: I want to obtain a gym membership at my local community center and work out four days a week to be healthier. Every week, I will aim to lose one pound of body fat.
Achievable SMART Goals
A SMART goal must be achievable and attainable. This will help you figure out ways you can realize that goal and work towards it. The achievability of the goal should be stretched to make you feel challenged, but defined well enough that you can actually achieve it. Ask yourself:
- Do I have the resources and capabilities to achieve the goal? If not, what am I missing?
- Have others done it successfully before?
Realistic SMART Goals
A SMART goal must be realistic in that the goal can be realistically achieved given the available resources and time. A SMART goal is likely realistic if you believe that it can be accomplished. Ask yourself:
- Is the goal realistic and within reach?
- Is the goal reachable, given the time and resources?
- Are you able to commit to achieving the goal?
Timely SMART Goals
A SMART goal must be time-bound in that it has a start and finish date. If the goal is not time-constrained, there will be no sense of urgency and, therefore, less motivation to achieve the goal. Ask yourself:
- Does my goal have a deadline?
- By when do you want to achieve your goal?
For example, building on the goal above: On August 1, I will obtain a gym membership at my local community center. In order to be healthier, I will work out four days a week. Every week, I will aim to lose one pound of body fat. By the end of August, I will have realized my goal if I lose four pounds of fat over the course of the month.
The Importance of SMART Goal Setting
Often, individuals or businesses will set themselves up for failure by setting general and unrealistic goals such as “I want to be the best at X.” This goal is vague, with no sense of direction.
SMART goals set you up for success by making goals specific, measurable, achievable, realistic, and timely. The SMART method helps push you further, gives you a sense of direction, and helps you organize and reach your goals.
Thank you for reading this guide to SMART Goal-setting in business. Below are additional free resources from CFI, the global provider of the Financial Modeling & Valuation Analyst (FMVA) designation.