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Setting out SMART objectives that can boost your bottom line

Management Skills

Setting out SMART objectives that can boost your bottom line

Updated: 12 August 2020

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Most successful businesses keep a close eye on their bottom line by managing their profit and loss accounts, their balance sheet and how the cash is flowing in and out. However business success isn’t just about getting the financials right, it’s also about how you operate.

Many of these companies have business objectives that are tied to their financial reporting and this is something that every SME should strive for, but how do you get there? Here’s a quick breakdown of what SMART objectives are and the sort of questions to be asking yourself when doing your business planning.

Phase one. Setting out SMART objectives:

  • Specific – This is where you ask the questions What, Where, Who, Which and Why?
  • Measurable – Really drill into the how many and when will I know that I have accomplished what I set out to achieve.
  • Attainable – Set down how you are going to achieve your goal.
  • Relevant – The sanity check – Does it make sense to do this now? Is this a priority? Does it fit with everything else you are doing? And have you got the right people for the job?
  • Time Bound – When are you going to do this, how long with it last and what can you do today, tomorrow and next week towards this goal.

It’s worth noting that with any goals that are tied to business objectives, it is worth evaluating the outcomes at regular intervals and also re-evaluating the process, goals and how SMART your goals were when you have put it into practice so that you can improve your goal setting and the performance of your company. Here is a great example of putting those SMART objectives into practice in advertising. For all you non-advertising businesses out there, here’s another great resource: 10 Steps to Setting SMART objectives.

Phase 2: Linking SMART Objectives to your financials

Once you’re comfortable with setting SMART objectives, you’ll be ready to take the SMART process one step further: linking them to your financial measures. This requires an additional level of commitment when but it also means you can set a budget to each objective as you can now measure the successful (and sometimes not!), financial impact of your objectives. When you are looking for someone to invest in your company or lend money to you it is essential that the return on investment is clear and that the investor knows when they will be paid back. Getting into these habits early will not only help with short term cash flow but also in the long term by making it easy to justify further investments in staff, buildings and much more!

 

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