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Business

How to set business goals

Business plan

The market analysis is followed by the company’s objectives in the business plan in which you set business goals. First, formulate the long-term business goals, vision, and mission. After that, you can use the short- and medium-term corporate objectives to fix. Based on the short- and medium-term corporate goals, you determine milestones for the next 1-3 years, which you orientate yourself in the company’s development. 

On the basis of the company’s objectives, in the next chapter of the business plan, you get the corporate strategy fixed.

Set business goals: where do you want to go?

Mark Twain’s quote ,If you don’t know where you want to go, don’t be surprised if you get somewhere else” describes very aptly why you should define clear business goals for your company. As an entrepreneur, you need to know where you want to be with your company in 1, 3 or even 10 years.

Since corporate goals also depend on the respective market development, the chapter On Business Goals always follows on from market analysis. The current market size and growth make it much easier for you to define realistic business goals.

However, before you start to set business goals, take a step back and wonder what your business intentions are. If you intend to make a living from the project (proper start-up), the conditions are quite different from, for example, if you see your project as an additional source of income (gradual start-up?) or if it is a business start-up? perhaps not at all about generating profits. Keep this point in your business plan because it is relevant for the other parts of the business plan and especially for the business goals.

The intentions are then followed by the company’s objectives. The best way to start is to set the long-term business goals (mission and vision), and then step by step determine the medium- and short-term business goals. After that, you can set the milestones with which you want to achieve the company’s goals.

Long-term business goals: Vision & Mission

With the vision, you describe the ideal state of your company in the distant future and thus answer the question of what you want to achieve in the long term (i.e. in 10 to 25 years) with your company. The vision is thus an overarching corporate goal.

When formulating the vision in your business plan, make sure that the vision:

  • “visionary” but still realistic,
  • is formulated in a clear and comprehensible manner, and
  • in a sentence (concentration on the essential factors).

A good example is Amazon, with the following vision:
“Amazon’s vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” 
Amazon’s vision is to be the world’s best customer-centric company by creating a platform where people can find and discover products you want to buy online.)

In contrast to the vision with which one’s own employees are primarily to identify, the mission aims to explain the purpose of the society. It is therefore essentially a question of what a company is supposed to do for its customers and/or society, or what purpose the company is supposed to fulfil. The mission therefore normally derives from the vision and therefore has an indirect impact on the company’s objectives.

A very successful company, Google, has the following mission:
Google’s mission is to organize the world’s information and make it universally accessible and useful. 
(in English: Google’s mission is to organize information and make it accessible worldwide).

Include the two long-term business goals, vision and mission, in your business plan. From this, you can then define the short- and medium-term company goals, as well as the milestones.

Short- and medium-term corporate objectives

Once you have formulated the vision and mission, it is a matter of setting the medium to long-term business goals (for the next 5-10 years) as well as the short-term business goals (1-3 years). You can then use the short-term business goals to define the milestones that you can use to guide the implementation of your business plan.

The goal is …

….that you present a convincing vision and, if necessary, mission in your business plan. Clearly formulated Short- and medium-term corporate objectivesspecify the direction of your start-up. Based on the company’s goals, you are then able to determine milestones that you can orientate yourself on in the future.

In the next chapter of the business plan, you will work out how to achieve your business goals, the Corporate strategy.