In a startup like Hubstaff, there are thousands of things that need to be done, and thousands more after that.
Part of the battle of running a successful business is spending your valuable time on things that matter.
That starts by determining your goals.
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What are business goals?
The easiest definition of a business goal is the main reason why your business exists. What made you start the company?
Answering this is one of the first and most important steps to business growth.
Of course, there are different types of business goals, and understanding them will make it easier for you to identify your true priorities and accomplish them.
Types of business goals
A good understanding of the different kinds of business goals will help you set objectives and create accurate plans.
Goals can be split into two main categories: short-term and long-term business goals.
Long-term goals are what you aim for your business to achieve typically in one year or more. Short-term goals are the ones that help you get there.
For entrepreneurs, establishing financial goals is often the first course of action when creating plans.
This is especially true for small businesses and startups, as cash flow can fluctuate in the first few months or years.
Finances are one of the most reliable metrics that can help you identify how much your business has grown over a specific period of time. Read our guide on business balance sheet.
Human resource goals
Human resource (HR) goals concern everything about your team.
These include how large you need your team to be, the particular specializations your future employees should have, and the training programs you will provide to them.
The first years of a startup are crucial in establishing a unique brand identity.
The products or services that you offer aren’t the only ways to attract clients and potential customers.
Hubstaff, for example, is a time tracker software but is known to be a company that greatly values freedom as a core value at work.
Considering brand goals is one way to further connect with customers through shared values, and grow your business.
Product goals aim to help in the development of your products and services, which serve as your primary business driver.
If you are a SaaS company, a good example of a product goal would be having a list of features your software should have after a year or two.
The different type of business goals mentioned above can help you determine which priorities you want to go after. You can use them as a reference for adjustments and future decisions, and they can aid in creating the right strategies for accomplishing your company goals and objectives.
A proven method of prioritizing goals
At Hubstaff, we use the Theory of Constraints for priority management to be able to reach our goals.
The Theory of Constraints is a business priority matrix that seeks to align all tasks towards goals, eventually compounding to successfully achieve a major goal. This can only be achieved with an understanding of current problems and how to resolve them.
Once you have identified your business goals, you can begin to develop the tasks you need to accomplish them. As shown in the graphic below, each of your tasks must be directly correlated to your goals.
The key to mastering this process is to identify and complete the tasks that align with your major goal. Below is a quick guide on how to identify the correct tasks to focus on, which will help you accomplish your end goal.
How to identify and achieve business goals and objectives with the Theory of Constraints [Examples]
The traditional application of the Theory of Constraints is for factories and businesses that have complex dependencies. However, a simplified version can easily be applied to startups and small businesses.
This business priority matrix can have large benefits for your business when executed correctly.
The key to utilizing the Theory of Constraints is to identify “blockers” in your business and kill them.
If you can do this, then you can increase the output of your business and eliminate factors that aren’t contributing to reaching your goal.Free bonus: Download Hubstaff’s actual strategy document.
Correctly identifying blockers is challenging.
To make things easier, we’re going to share with you a quick exercise you can use to identify blockers and build plans of action to kill them. By the end of this article, you should have much more clarity about what steps you should take to identify and accomplish your business goals.
Step 1 – Define your 12-month goal
There’s a lot of advice out there for goal setting, so this article is just going to touch on a few points.
- This goal can apply to anything. Your goal can be to hire a team of 7 superstars, get more leads, bring in more revenue, get more customers, lower stress in the workplace, or anything else that will result in business success.
- You need to live, breathe and believe your goals. Manifestation is a good practice. This refers to seeing something as true, so your subconscious drives you to do what you need to in order to make it true. For example, if you believe you’re an entrepreneur, you will act like one, and eventually become one. But don’t forget: you must be able to accurately visualize the goal.
- Your organization needs to revisit the goal regularly, whether it’s monthly, daily or hourly. You need to be tied to it, and put everything behind it. Drop the tasks that aren’t directly tied to achieving a goal.
- Goals must be:
- Achievable = Ambition is a powerful driving force, but it works best when combined with being realistic.
- Desirable = You need to be sincere about wanting your goals, and willing to dedicate your time and effort to them.
- Believable = You must have the confidence that you can and will get there.
Keep these in mind at all times, and you will be able to focus on your goals much easier.
Step 2 – List your blockers
List out all the obstacles that are currently preventing you from reaching your goal. Think of it as a brainstorming session. Although it’s easy to get caught up and carried away in this step, focus on listing things out.
For this post, let’s use Hubstaff as an example. Our goal was to earn $70,000 in monthly recurring revenue in 12 months.
These are the things that are top-of-mind and blocking you from reaching your goal.
The obstacles above are broad strokes that were blocking Hubstaff from hitting our goal of $70,000 MRR.
Let’s look closer at one of the blockers listed above: we are not converting enough trials into paying subscribers. At this point, we were converting approximately 20 percent, which is acceptable, but we can do a lot better.
Step 3 – Convert blockers into their opposites (90-day goals)
The next step is to take each of your obstacles and reverse them into their ideal counterparts.
So, from the example above:
- Our obstacle – We were not converting enough trials into paying subscribers
- Its positive version – We have a trial to paid conversion rate of 35 percent (what we’re aiming for)
These positive statements then become your intermediate objectives. You can consider them as 90-day goals. It takes a little longer to reach these, so give yourself some time.
Here’s what our map for Hubstaff looked like at this point (created using Xmind):
Now we’re getting somewhere.
The map will begin to clarify which areas you need to work on. Read these positive statements out loud, and you can see what needs attention in your business.
But we’re not done yet. Let’s dig deeper.
Step 4 – Uncover the 30-day projects
This is where the majority of the work will take place. It will also be where discoveries will be made and benefits will be identified. In this step, we start to hammer out all the possibilities to solve the problem.
In this example, the positive statement was, “We have a trial to paid conversion rate of 35 percent.”
The next step is to brainstorm the various scenarios that need to happen for the positive statements to become true.
Ask yourself, “How can I make this happen?”
In our case, how do we get a 35 percent conversion rate vs. the 20 percent we are currently at? We could do a few things:
- Call or Skype each trial user
- Reach out personally via email
- Confirm that the correct people are signing up for trials in the first place
- Help their employees get onboarded
Did you notice how this process naturally drags out the answers?
These become your 30-day projects.
Step 5 – Build the task list
In this step, write down all the things that need to happen to accomplish each project. Consider these the action items that you’ll be working on day-to-day.
There’s a chance that you’ll end up with too many tasks in this step, and that’s okay.
It’s valuable to have these steps documented so you can revisit them later. Prioritize your list and make sure the most important tasks get finished.
How the Theory of Constraints paid off for us
When we revisited this article, as expected, we had a completely new set of goals and constraints based on a higher objective.
Here’s what our goals and constraints looked like for 2016.
Goal = 140k MRR by Dec 31, 2016 across all products:
- Projects (Now called Hubstaff Tasks)
- No one is using Tasks
- Price per client is low
- We are only selling 22% of people on the premium features
- Pricing is only $5
- Don’t have a scalable system for generating leads
- Not truly doubling down on what’s working
- Don’t have A+ blog
- Only 18% of trials are converting to paid users
- Not converting enough trials because there are too many steps, it’s a confusing UI, no simple web-based timer, bad funnel emails, getting employees to agree to use it, etc.
- The product is too “niched”
- Lacking features like per-project budgets, invoices, attendance, daily email summary, faster integration sync, etc.
- Top of the funnel isn’t large enough. Need to improve SEO, content marketing, advertising, sales outreach tactics, loyal audiences, etc.
Then, we took those constraints and create a larger system that looks like this:
As we approached this new set of goals and tasks, we also looked at our process for areas to improve.
In the past, we used to start with the channel, such as “Social Media”, and create projects for each channel. We would have projects for SEO, social, email and so on, but we realized that we ended up creating projects simply because we had the people to do them, not because they would grow the company.
In other words, we created a lot of busy work.
Now, we don’t think about the people or channels up front. Instead, we examine what projects would have the highest impact on the company, then we assign people to the projects.
We use our own agile project management software, Hubstaff Tasks, to prioritize quarterly projects and then assign weekly sprint tasks.
This process ensures that everything rolls up to the highest priority goals and that we’re all doing our part to reach them.
Looking ahead using goals and constraints
While updating this post in 2019, we decided to add some of our most recent milestones so you can see how this approach continue to pay off.
Here are some statistics that showcase the growth we experienced in 2018 — thanks to continuing to look at goals on a quarterly basis.
- Our MRR grew by 60.4% from 2017 to 2018.
- It continues to grow steadily and is currently sitting at $440K.
- Net revenue is at $4.14M, 77.2% higher than the previous year.
- The average revenue per user is $45.22, which is a 7.7% increase from 2017.
- 8,672 users are tracking their time with Hubstaff.
Our goals for 2019 and beyond
One of our main focuses for 2019 will be helping our customers work more efficiently by adding new useful features to Hubstaff.
Here’s what we plan to deliver to customers in terms of product goals:
- Added functionalities to the mobile app such as timesheets, schedules, and reports.
- Geofencing will be a mobile feature as well, which is useful for field teams that work at different sites.
- More Hubstaff integrations to streamline your work even further.
- The full release of Hubstaff Tasks, an agile project management tool that lets you organize tasks and projects. You can seamlessly track the time you spend on each task with Hubstaff.
With all the upcoming functionalities for Hubstaff and Hubstaff Tasks, teams can look forward to a more effective way of getting things done and staying productive.Free bonus: Download Hubstaff’s actual strategy document.
We use task boards and mind maps to help us organize content and documentation to teams.
- Hubstaff Tasks – We use this software to keep our tasks organized and track who is doing what. Tasks is a kanban board workflow that integrates with Hubstaff so you can streamline your work further. Its built for agile teams who want to prioritize work in sprints, and accomplish goals faster. Best of all, it’s completely free for teams of up to five people.
- Xmind – The maps in this post were designed using Xmind. This software is free and has most of the mind mapping tools we need.
- Mindjet – Mindjet is one of the most useful mind mapping software available, with a well-rounded set of features. However, it’s quite expensive.
- Google Draw – This is a free web-based flowcharting program. It has less support than Google Docs and Sheets, but should accomplish your flowcharting needs.
- SmartDraw – This is a desktop-based program, and a good tool for more complex flowcharts.
Tying it all together
The Theory of Constraints is an effective priority management system that can help you accomplish your business goals.
It certainly helped us at Hubstaff.
When priorities change, we can also revisit our mind maps to determine how it should affect our tasks.
This process helps confirm that our daily tasks are perfectly aligned with our business goals, and that alignment is key for our sanity when things are moving a million miles an hour.
We have more peace of mind because we are confident that we have the “what” figured out, which is more than half the battle. Execution is sometimes the easy part. This process has also helped us communicate our goals to the whole company. Everyone knows exactly what the end goal is.
Do you have your own approaches to setting company objectives and goals?
Are there any tools that you use to manage your tasks effectively, or is there anything we missed? We’d like to know in the comments.