Business Planning with SMART Objectives
Running your franchise business profitably means planning. The more detailed plans you have on every aspect of your new business, the better your chances of making your new franchise a success.
One of the most important components of your business plan is setting yourself objectives to aim at. You then have a roadmap that you can follow that should deliver a profitable and sustainable business long into the future.
Business analysts often use what they call the SMART (Specific, Measurable, Achievable, Realistic, Time) system as this gives businesses a template they can use to set objectives within their wider business plans.
Understanding the SMART systemThe SMART system enables you to define an objective and then detail how you will move towards achieving its stated goals.
SpecificThis is the most important aspect of the whole SMART system. You must think through the objective you are setting. Focusing on a very specific objective is the key to successfully using SMART. Also, ensure your specific objective can be acted upon. You should set an objective that you can actually take practical steps to deliver to your franchise business.
MeasurableAsk yourself how you will measure if you have actually attained your stated objective. If your objective is to reduce your insurance premiums for instance, you will see if this has been achieved by a reduced bill. But other objectives may not be as easy to measure. At this stage of the SMART exercise you need to think about the metrics you will use for your stated objective.
AchievableThe SMART exercise is all about obtaining your stated objectives. Try and be realistic as possible when setting an objective. For instance, increasing your personal finance by £100 million in two days isn’t really achievable. This is an extreme example, but being able to practically achieve your objectives is important to stay motivated.
RealisticSetting a realistic objective goes hand-in-hand with an achievable objective. Look at the objective you want to set. Do you have the skills or resources to actually deliver your stated objective? You may need to buy new machinery, or send an employee on a training course to achieve the objective. Always try and ground your SMART plans in reality as they will then be more likely to succeed.
TimeSetting a deadline for your objective is important as this can clarify what steps have to be taken and when to meet your defined objective. Placing a time limit on your SMART exercise will motivate the people that have to deliver the objective. Be realistic though, as too short a timeframe may have the effect of damaging the morale of the people delivering your objective as they can’t see how they can achieve the stated objective in the time allowed.
SMART ChecklistIf you can develop your skills with the SMART system you will become a better manager of your franchise. There are many aspects of your business that require your attention, but try and take a step back and look at the wider market that your franchise business operates in. Using this knowledge you can set objectives via the SMART system. But remember:
- 1: Objectives in context
SMART can help you define an objective and then detail how this will be achieved, but SMART should be placed in the wider context of your entire business. Think about the consequences of achieving your objectives. How will they impact on the rest of your business.
- 2: Don’t isolate SMART objectives
Always consult the people that will be delivering the objectives you want to set via SMART. If you have employees they will have a more intimate understanding of the processes within your franchise. Don’t arbitrarily set an objective without consulting every party that this will have an impact on. This will save you time and resources setting objectives that are simply not achievable.
- 3: Always measure
SMART is a useless system if you don’t have clearly defined metrics that will show you if your objectives have been met. Test the metrics you want to use before actually setting an objective. You may discover that the measures you though would be enough are inadequate and require a rethink.
Remember that the SMART system is a tool. Using SMART is not an insurance policy that can guarantee your franchise will be successful. You must still think through the objectives you are setting, and ask yourself if they are realistic and achievable in the time allowed. As a planning tool SMART is an excellent skill to have. The more you practice with SMART the better you will become at delivering objectives to ensure the future of your franchise, and securing your personal finance via steadily growing your franchise’s profits.