SMART Goals for Startups: How to Achieve Sustainable Business Growth
It’s exciting when your startup begins to experience rapid growth and generally means the company is heading in a promising direction. And while rapid growth is usually a positive sign for emerging startups, it carries with it some dangers that can derail the company’s progress. Understanding how to create sustainable SMART goals for startups to keep the business on track is essential for your company’s success.
Risks of Rapid Growth for Startups
After spending months resharing your company’s GoFundMe and pitching to private investors and VCs, you’re probably elated to see your startup brand begin to take off. But this rapid change brings with it a range of dangers that may get your brand off track.
The dangers of startup rapid growth include:
1. Cash Flow Problems
Increases in startup growth bring with them the need for investments in hiring new staff, marketing expenses, and scaling expenses. This can strain a startup’s cash flow if revenue is growing at a rate that is slower than the increase in expenses. In the worst of these cases, it can cause financial difficulties or even bankruptcy.
2. Increased Competition
As startups grow and attract more attention, it can cause competitors to increase their bidding and prevent the startup from gaining market share.
3. Loss of Focus
When things start moving quickly at startups, it’s easy to lose sight of the core values and mission that the company was built upon. This may lead to neglect of existing customers and seed stage investors, a decline in the quality analysis of products and services, and decreased competitiveness in the market.
4. Culture Shock
Lastly, the culture at startups often shifts following periods of rapid growth, leading to the loss of the entrepreneurial spirit and innovative mindset startups are known for. This is made worse by poor decision-making by a management team that has not had to make business choices at this rate before.
To succeed, startups should be mindful of these dangers and create goals for growth that are sustainable in their expectations.
What Are SMART Goals?
As the startup landscape becomes more competitive and the global economy faces issues such as inflation and seemingly endless supply chain disruptions, it has become difficult for new startup brands to operate and grow.
The best way startups can mitigate the risk of starting a business is by meticulously researching, planning, and establishing a business foundation based on attainable growth.
SMART goals are business goals that are:
SMART goals help businesses achieve their business goals more effectively and with more manageable tactics.
SMARTS Goals: SMART Goals That Are Sustainable
We’re switching up the way businesses should talk about SMART goals. Meet SMARTS goals: goals that are Specific, Measurable, Achievable, Relevant, Time-Bound, and Sustainable.
What makes goal-setting sustainable? In the marketing world, we caution brands to not expect a lot of results after a short period of time because they’re setting themselves up to be disappointed.
When you build the foundation of your business goals on metrics that are too big-picture or don’t align with your specific measurable KPIs, those goals are not sustainable for long-term growth.
Vanity metrics and KPIs are those that are easy to track and measure but don’t provide a comprehensive picture of how well your business is doing. These metrics might look impressive (or disastrous!) at times, but without providing actionable insights, the company’s performance won’t improve.
Examples of vanity metrics are:
- Social media followers
- Website traffic
- Number of likes or comments
- Email subscribers
- App downloads
The problem with these metrics is they can give a false sense of security. So, you might think your startup is doing really great because you just hit 5k followers on Instagram, but if those followers haven’t converted in meaningful ways on your website, you haven’t moved any closer to meeting your goals than when you started.
SMARTS goals use meaningful metrics to provide a clear picture of how well a company is doing.
Examples of meaningful metrics are:
- Market share
- Revenue generated
- Return on investment
- Customer satisfaction
- Customer lifetime value
- Employee turnover rate
These metrics may not be as straightforward to track or measure as vanity metrics, but the effort is worth it as they can provide valuable insights that can be used to adjust operations and overall company performance. The specific meaningful metrics your company should use as key performance indicators will vary depending on your business goals.
Specificity: How to Define Clear and Concise Goals
Specificity is the component of goal setting that gives your team a precise target to work toward. For startups, specific goals are especially important as the startup landscape can be uncertain at times, making it difficult to stay on track. With specific goals in place, your team will have something to focus on and make progress toward despite external factors.
To make goals more concise, begin by outlining a big-picture goal, then break it down into smaller, manageable steps.
Measurability: How to Determine Success
Effective business goals should be measurable, meaning they are quantifiable, so you can track progress toward achieving them. Having a quantifiable metric to balance results against will help keep your startup on track with forward momentum.
This is where it’s important to remember the difference between vanity metrics and meaningful metrics. Make sure the KPIs you attach to each goal are relevant to your business goals. For example, an SaaS company with a goal of retaining customers would want to track monthly recurring revenue or customer churn rate rather than website users.
Achievability: How to Set Realistic Goals
Set goals that will signify growth at your startup, but that are achievable and within reach. Especially if your company is experiencing rapid growth, your goals should be ambitious but not impossible.
When you set your sights too high, your team may get frustrated, discouraged, and ultimately give up. On the other hand, if you set your sights too low, you’ll miss out on growth opportunities.
Consider the following when creating achievable goals:
- Availability of resources, both human and financial
- The strengths and weaknesses of your company
- How flexible can you be about this goal if things change in the market?
- What happens if you achieve this goal–how will you stay motivated to keep growing?
With this information in mind, you can map out goals that are realistic, but still a cause for celebration when they are met.
Relevance: How to Align Goals with Business Objectives
The R in SMARTS is for relevance, meaning your goals should align with your company’s mission and vision. In the entrepreneurial stage of startups, it’s easy to get distracted by new and exciting ideas.
By setting relevant goals, your brand will remain steadfast about what is important to the company’s overall goals for growth.
The best way to keep goals relevant is to define your company’s mission and vision. What kind of impact do you want to make? Then, define how this specific goal links back to that impact.
Time-bound: How to Establish a Timeline
Once you’ve defined a goal that is specific, measurable, achievable, and relevant, it’s time to set a deadline on when they should be achieved by. With VCs and investors frequently checking in on progress, having a specific date to get something done will help your team stay focused on objectives.
Be realistic about your timeline, especially if you’re making promises to investors. Have honest conversations with your team about their capabilities and capacity. Additionally, you can break down your goals into smaller milestones with different deadlines for each. Track progress regularly to make adjustments as needed.
And don’t forget to celebrate your successes when you achieve a goal. This will keep the team motivated to keep growing.
Examples of SMARTS Goals for Startups
Here are a few goals that meet all six criteria:
- Increase revenue by 5% over the next 3 months.
- Launch a new product or service by the end of the year.
- Hire 10 new employees by the end of this quarter.
- Reduce customer churn rate by 2% in the next year.
- Attend 5 trade shows in the next 6 months.
- Develop a marketing plan and start running PPC campaigns in 60 days.
- Shorten customer inquiry response time to within 24 hours in 30 days.
Some goals will be easier to achieve than others and it’s important to have a mix of guaranteed and more ambitious goals to encourage employee engagement.
How to Achieve SMARTS Goals With Marketing
The marketing decisions you make at each stage of your startup’s growth will help achieve SMARTS goals. In the growth stage of your startup, you’ll want to focus on marketing efforts that include SEO content creation, social media content creation, optimized distribution strategies, and driving ongoing traffic with PPC advertising to increase sales.
Whether you need long-term support or a short-term Fractional CMO during periods of rapid growth, our team can help. We will craft an actionable and comprehensive marketing strategy to give you a push toward achieving your startup’s goals.
Frequently Asked Questions
What’s wrong with vanity metrics?
Vanity metrics do not provide valuable insights into the health of a business. For example, a brand may have thousands of followers on TikTok, but be declining in revenue for several months. Meaningful metrics are the opposite of vanity metrics; these metrics provide actionable insights into the success of a company, such as its customer retention rates.
What marketing tactics should startups use?
Startups should use marketing tactics that reach their target market, increase their market share, and demonstrate growth to investors. Tactics for startups include content marketing, social media marketing, search engine optimization (SEO), and paid advertising.
How can a marketing agency help startups grow?
Marketing agencies help startups by introducing them to strategies that will align with their business goals. An agency can either train a new marketing team or execute strategies on a retainer basis. Agency teams provide access to a wealth of expertise in marketing, branding, and advertising. They can also save startups money by handling the marketing tasks that would be more expensive for a salaried in-house marketer to execute.