Do you know the difference between goals and objectives? Many think they mean the same thing, but goals and objectives have their own separate functions in business.
To answer the question ’what is the difference between business goals and objectives?’, this guide will cover:
- What business goals are
- What business objectives are
- How they work together
- How to set business goals and objectives
- How to measure your progress towards reaching them
What are business goals?
Goals set a wide, overarching target that helps you define where you want your business to go. While goals help set intentions and ambitions, they can be difficult to measure. Still, establishing goals is an important step of business planning as it impacts aspects like your daily operations, marketing strategy, and financial needs.
Say you have an overall goal to become a successful graphic designer. While this sets a long-term target, it doesn’t specify how you’ll achieve it. What does ’successful graphic designer’ mean in this context, and when do you plan to reach that goal?
Having goals is a great motivator, but adding precise targets and objectives will help you motivate yourself and achieve your goals more effectively.
So what is the difference between business goals and objectives? We’ll explain it in the next section.
What are business objectives?
An objective is a specific milestone you’ll hit on the way to achieving your goal. Setting business objectives is the next step to creating a clear plan for how to reach the desired outcome.
Objectives are measurable steps or precise actions you take to get closer to your business goals. They are specific targets typically to be completed within a specific time period.
If we look at the graphic designer example from the previous section, the goal there is to become a successful graphic designer. Objectives related to this goal might include growing your client base by 5% each quarter or increasing your social media presence by a set time frame.
How do business goals and objectives work together?
Goals and objectives go hand in hand in business. Setting business goals without defining objectives will likely lead to some goals never being fulfilled.
Think of it like driving to a destination without a map or GPS, where the destination is your goal and the GPS is your list of objectives. You will likely get lost along the way without something to guide you, either missing your destination or taking much longer to arrive.
How do I set my goals and objectives?
There are many ways you can go about setting your goals and objectives. Many companies use the SMART method to create specific targets along the way towards reaching each goal. SMART stands for Specific, Measurable, Attainable, Relevant and Timely.
Start by defining your end goals. Where do you want your business to end up?
Next, use the SMART method to set smaller short-term objectives that will help you achieve your ultimate goal. Describe what you will do and when, and how long it should take you. Setting your SMART goals could look something like this:
Example 1: Growing a startup business
- Specific: I want to grow my client base
- Measurable: Increased number of new clients
- Attainable: I will sign on two new clients per month
- Relevant: I will use my network and social media to outreach for new opportunities
- Timely: For the next six months
Example 2: Increasing brand awareness
- Specific: I want to increase brand awareness online
- Measurable: Increased followers or average likes per social media posts
- Attainable: I will aim for a 15% growth
- Relevant: I will pay for my post to circulate to a wider audience on Instagram
- Timely: By the end of the next quarter
How to track progress
Once you’ve established your goals and objectives, you need to come up with a system that will help you track your progress towards those targets.
One way to do this is to assign something called Key Performance Indicators (or KPIs), which are measurable values that demonstrate how effectively you’re achieving your objectives.
Examples of KPIs include:
- Number of contracts signed within a period
- Average time to sign a client
- Inventory turnover (how much of your inventory you end up selling)
- Customer retention rate (how many of your customers stay with you)
- Monthly website traffic
- Increase in social media followers
When you hit a target, take the time to review how it went, how long you took to achieve it (was it within the planned time frame or did it take longer?) and what you can do to improve your efforts going forward.
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