How Do You Set Goals With Data?

How do you set goals with data?

It’s not uncommon to have big goals, most business owners dream big and see a bright future in their business. It’s possible, there are stories of six-figure businesses everywhere, my cycling business went into crazy figures not long after I launched it, but it doesn’t come from dreams and wishes. It comes from numbers and strategies.

At the start of a new year, a lot of business owners set goals and think, “This year will be my year” but the goals aren’t based on any kind of reality. Let’s say, for example, your business is earning $10k a month and you set your goal to have a million-dollar year. That’s just a number on a notepad, you have no understanding of what it takes to get there.

What this leads to is giving up on the goal in February, when you see a meagre $5-10k in your first month. It’s not the goal that failed necessarily, it’s the lack of strategy and understanding of how to implement a goal that works.

So what now? You can stick your head in the sand and give up on goals forever, or you can put in some effort to learn how effective goals and data work together to bring success.

When you know your business numbers and can read the data, that’s when you have a realistic driver. You can use that data to set goals that are based on past success and build strategies that are measurable and specific to your business.

Why it’s important to set goals with data

You can find plenty of advice about goal setting online. One thing articles focus on a lot is intrinsic goals; things like, “set goals that make you happy”, and, “I want more time with my family”. While those are great, it’s important to focus on hard data, that’s something you can record and measure.

That doesn’t mean you need to get fixated on goals for dollars or profit, you can still put heart into it. Your goal could be, “I want to help 100 people a month”, which can be measured weekly and monthly, just the same as earning a certain amount or selling a set amount of items can be measured.

As long as it contains data, your goal has a solid structure that can be measured and recorded, not just at completion, but structured points along the way.

There are a number of big benefits of utilising data in the goal-setting process that allow you to:

  • Make better decisions – especially around finding new customers, increasing customer retention and management strategies.
  • Identify and solve problems – tracking and reviewing data helps identify where performance is breaking down so you can make improvements and repair the damage.
  • Understand performance – Knowing which teams and individuals are performing well gives you the ability to find the key areas of their success and copy and paste their performance to other teams or areas to get better results.
  • Streamline processes – Finding what works and putting energy there. So for example putting time into the content channels that work (and stopping those that don’t) means smarter marketing with less financial output.
  • Understand consumers – So you know who your target audience is as well as how much they are spending on particular products or services.

How to set S.M.A.R.T. goals using data

As well as using data to create business strategies that drive growth, you also need to make sure your goals are S.M.A.R.T. You can find S.M.A.R.T. goals written up on every website imaginable and that’s for a really good reason, they work.

In order to see results from your data-driven goals, you’ll need to follow the S.M.A.R.T. goal rules:

S = Specific

M = Measurable

A = Achievable

R = Relevance

T = Time-bound

The S.M.A.R.T. goals are designed to steer you away from creating general goals, like “I want to have more money”, or, “I want to be more successful”. It nails down exactly what more money for more success is and makes it quantifiable and realistic, so you have a desire to get moving and take action so it happens within the timeframe. Without a timeframe, you won’t feel any pressure to get started, and without something that is both achievable and a bit of a risk, you won’t be motivated to put the work in.

Having a deadline and specified parameters for results gives you something to work towards every day, along with check-in measures to know if it’s working. If it’s not working, don’t give up, look at the S.M.A.R.T. goals guideline and find the part that is holding you back and make adjustments.

S.M.A.R.T. goals take data into account by default (that’s how they become measurable) but I do have some other ways you can concentrate your goals around data to help you hone in on results.

These five steps help bring in data to manage, assess and drive your business goals. They work hand-in-hand with the S.M.A.R.T. setting method. If you are ready to see results, follow the steps below:

1. Know the kinds of data you need

Current data sources are a great way to get quantifiable information on how your business is doing in the present market, it’s not the only data you have access to though, you also have historic data.

Goals based on historical data helps businesses include their long-term customer and market trends. It’s important to look at using both historic data and quantifiable data going forward. Having more information available gives you a bigger advantage when it comes to making decisions on budgets, marketing, advertising and even product or service creation.

So if we put that into a real-life example, if you know you want to earn a million dollars by the end of December, you’ll need to know exactly how much your product/s or service sells for and calculate how many sales you need to make to get the million dollar figure. How many units or hours does that equate to every month and every week for the rest of the year?

Now you can use your historical data to compare your desired sales volume to last year, the year before, and even the year before that. If you had an increase in demand in times gone by, what problems did you learn to overcome to make that happen? What problems can you foresee in achieving an increase in sales to reach this goal? (i.e. I’m going to need to employ more staff to handle that workload, I’m going to need to ask the factory to increase their output, I need to be open to the public for longer hours).

You might also find that the costs of extra expenses mean your offer or service prices will need to be adjusted. Knowing these things in advance lets you put actionable steps in place to get ahead of issues and make your goal possible.

Goals based on historical data in your business analysis can also be used for:

  • Business forecasting
  • Regression analysis
  • Forecasting
  • Insight

Using historical data for forecasting can help you to see if your desire for growth is in line with projected industry performance. If there is a slump predicted, it might not be the best time for you to be looking for your million. Instead, you might like to look for a gap to create a new, innovative package or come up with some ideas that might get around a forecasted regression. If not, it might be best to put your business scaling on hold and get your business strategies and processes perfected so you can go hard when things turn in your favour.

Data falls into two categories; qualitative data and quantitative data:

  • Qualitative data is how people feel about your business and what they think about your brand. It’s also about why they make choices to buy or not, or choose a certain offer or service over another.
  • Quantitative data is about numerical data and statistics. Numbers, figures and percentages. These are hard facts and there are no grey areas. Qualitative data is what you need to help set realistic goals.

When used together they can help you understand your target customers’ needs as well as the quality of the competition.

2. Set your KPIs

Businesses use Key Performance Indicators (KPIs) as a quantifiable measure to determine if they are headed in the right direction to meet their business goals and values, including marketing and sales goals.

KPIs are typically not built directly around a goal, but they support the structures within that goal. You could have KPIs that nurture your customers, or relate to other intangibles that help the business achieve its overall goals.

Instead, the KPI might be to answer all incoming calls within 10 seconds, or that you maintain a 5-star customer rating. Other KPIs are around error margins, revenue per customer or number of people reached on the mailing list. If you have difficulty with follow-up calls, you could create a KPI that 10% of leads must be followed up using three different contact methods.

KPIs are flexible in that you can set them to be anything you like in any area of your business to improve your organisation’s health and productivity. It comes down to what your company’s individual performance criteria is and what your priorities are.

All KPIs use qualitative data for a business to measure and check in on how well they are performing. As well as using KPIs to measure your business progress, you can also use them to understand where the challenges are and how to overcome them.

You’ll need to determine which KPIs are important to follow based on your staff ability and business growth. A good KPI will have the following qualities:

  • Takes into account the current stage of the business
  • Assess the strength of your team
  • Responds to where your customers hang out
  • Abides by a category of priority so important KPS are not eclipsed by non-essential/easy ones

While KPIs measure specific and target progress toward your business goals, metrics hold the overall big business vision. Metrics help define which KPIs need to be set in order to make progress towards goals and give you a view of your overall business health.

3. Build a goal system to track your progress

When you have a structured goal system, it breaks down into intermittent short-term goals and activities. This creates a known routine and steady ongoing progress that helps remove the sudden learning curves that come from having to overcome big, unknown obstacles every time you attempt something new. Jumping onto random tactics or following the “tips” and “tricks” advice others throw your way moves you further from your goal and can lead to a drop in motivation.

OKR is a great example of a goal system. OKR stands for Objectives and Key Results and it’s a process where the team manager defines what goals each individual needs to achieve for the company’s main-goal success as well as what actions the team member needs to take to achieve it. It’s best if this is contained in a realistic timeframe and the goal set is a challenging one.

It’s an effective performance management framework to communicate and monitor a business’ overarching goals and performance.

4. Align with your team

Your goals will be naturally directed towards growth, which means you need to be prepared for it.

You and your team need to be on the same page well before the pace picks up about what to expect, what is expected of them as well as pooled ideas for how to best go about reaching the new goals (i.e. sharing your KPIs). When you have collaboration your team will be cooperative, motivated and committed to helping you reach the growth you want, if you are actually ready to scale your business.

Setting goals for each member is part of the preparation process. It’s important for you as their leader to practice performance management, including regular one-to-one meetings, performance appraisals and effective communication around underperformance, to keep track of your team’s progress and wellbeing.

5. Learn from someone who has achieved the goals you want to achieve

Setting goals with data is the first key. The second key is to then learn the lessons from someone who has achieved what you want to achieve.

Now this is not actually that hard to do. When you have been successful and come through something the hard way, your natural instinct is to help others coming through behind you. That’s what I do, that’s why I created my business with Evolve To Grow, because while I was very successful in my previous business, it cost me everything. It’s a hard, hard way to learn how not to run a business. But what I have from that experience is a sure-fire way of how to run an effective six-figure business and I want to share that with you because I want you to get there too.

It’s good for everyone when a business succeeds. It means more jobs, more innovation, more choices for consumers. I want you up here with me so I’m here to give you those lessons and help steer you around the damage that doing it wrong can bring.

Any coaching company can give you some mentorship and advice about pushing yourself and putting strategies in place (and getting organised) to be a six-figure business. The best ones are the ones who have done it themselves, they didn’t get their coaching license on a bit of paper or in books, they got in in real life, doing it tough. Look for those people. Those coaches will know where you are coming from and can really help you make some quality business changes.

If you are building goals for a better business this year, get the data to support you. Qualitative data is the core your goals require to be realistic and achievable, as well as measurable and specific. Having access to historical and current data for your business and industry sets you up to have S.M.A.R.T. goals that support your dream for growth and give you actionable mini-steps that will get you there at a structured and manageable pace.

If you need any support in goal structure, reading your data or having a dedicated business group as a sounding board, we’re here for you.

As well as myself and our Evolve to Grow sherpas, we also have our Facebook community group of business owners and six and seven-figure business owners just like you. Jump in to have some questions answered, meet a mentor or even mentor someone coming up in your wake and see just how far 2022 can take you.