SMART is an acronym that stands for:
- Specific: Your goal is direct, detailed and meaningful (Who, What, When, Where, Why)
- Measurable: Your goal is quantifiable to track progress or success
- Attainable: Your goal is realistic, and you have the tools and/or resources to attain it
- Relevant: Your goal aligns with your company mission
- Time Bound: Your goal has a deadline
An example of a SMART goal is “Achieving 300 orders per week by the end of March”.
This goal is very Specific. It’s focused on order volume, so it’s clearly Measurable. If you are in the business of selling something, then a goal based on orders per week will be Relevant. And by setting a deadline for achieving this order volume at the end of March, the goal is Time Bound.
Often the most challenging assessment to make in setting a SMART goal is trying to determine if it’s Attainable. If you set the bar too low, you won’t be making the kind of progress your startup needs to build sustainable, forward momentum. If you consistently set the bar too high on your SMART goals, you’ll quickly learn to ignore the goals because you never seem to be able to reach them. Setting attainable SMART goals is ultimately more art than science, but your SMART goals should connect to a long-term plan that builds a scalable, profitable business that generates positive cash flow.
Your goal of “Build a billion dollar company”, while aspirational, is not a SMART goal.
Don’t Set Too Many SMART Goals
In the earliest stages of your startup, 3-5 SMART goals focused on product-market fit can keep you focused on the right KPIs to ensure your startup finds traction. As your company grows, you’ll build various pillars of growth that different members of your team will own, and they may have their own SMART goals that ladder up to the overall success of the company.
But in the beginning, don’t over-complicate things. 3-5 SMART goals is plenty if you take the time to pick the right goals.
1 Month, 1 Quarter, 1 Year
Finally, you should set goals in 1 month, 1 quarter and 1 year time frames. You want to have a one-year view of what you are trying to accomplish. But a year is a long time, and it’s impossible to steer your startup day to day against annual goals.
In setting quarterly SMART goals, you can adjust your tactics quarter-to-quarter to hone in on what’s working, while discarding approaches that are falling short.
Breaking your quarterly goals into monthly SMART goals then ensures that you are constantly measuring your progress, testing into new paths to hit your goals, and reacting quickly when you find something is working or failing to connect with potential customers.
Your monthly SMART goals should connect to your quarterly goals. Your quarterly goals should connect to your annual goals. As your monthly goals shift, either higher or lower based upon your performance, your quarterly and annual goals will be impacted. In this way, you always have an accurate record of your progress and a roadmap to where you’re headed.
Specific + Measurable + Relevant = KPIs
One of the most challenging aspects of goal setting is ensuring that you’re setting goals against the right targets. When we break down the SMART acronym, you will quickly realize that picking goals that are Specific, Measurable and Relevant require a focus on your business model and go-to-market strategy to help you choose the metrics that are the most powerful levers of growth.
These metrics, or Key Performance Indicators (KPIs), should be the foundation of your SMART goals, and the reporting and measurement framework that you put in place from day 1 to measure your progress.