Setting SMART Goals
Setting goals is something that every bar should do, but only some do. And most of the bars that do strategic planning and set long-term goals, only look at them when they write them. And ignore them until a year later when they are writing goals for the next year. Frankly, if you only do strategic planning and goal setting once a year “because you are supposed to” and then ignore it, you are just wasting your time. Knowing how to set goals that will drive your business forward, and then managing your efforts to reach those goals, is a sure way to give your bar a strategic advantage over the competition, and set yourself up for levels of success that you never thought were possible.
The Value of Goal Setting
Goal setting is one of the most powerful tools any business can utilize. By setting both long-term and short-term goals, you can give your bar a path to increased profits and give yourself a roadmap to a better work/life balance.
Why Set Goals?
The main reason to set goals is to give your work purpose. All businesses need a purpose to drive them forward. Your bar’s mission and vision statement are the foundation of that purpose. They are the grandiose ideals that you are reaching for. But, they are generally aspirational and not something you can ever actually achieve. Your goals, on the other hand, provide you with clear targets that drive you toward achieving your mission and vision, bringing your business closer to what you aspire it to be.
Goals are also a way to communicate to your team where their focus should be. If your goal for this quarter is to reduce food cost by 2%, you have set direction for your team. They have something specific and concrete to achieve. Goals set the tone for how people work and what they focus on. Goals make you more productive.
Long-term Goals Drive You Forward
You should set lofty long-term goals. You need a vision for your bar that is going to push you past where you think you can go, and help you achieve amazing results. Maybe your goal is to increase sales by 50%. While that is not achievable overnight and could take years, it gives you a target. Something to strive for.
If you set your goal at a 10%, instead of a 50%, increase in sales, you will increase your sales by 10%, feel great about what you accomplished, and stop. When you set long-term goals that are going to take years to reach, you need to make sure that you are pushing yourself and your bar to be the absolute best you can be, rather than just being good.
Long-term goals are one of the single most important tools that you can put in place to guide you forward. They should go beyond your sales, and cover goals for your culture, for your team, and for your impact on the world. When you write something down and focus your efforts on it, you make it a reality.
Short-term Goals Are the Stepping Stones
Lofty long-term goals are great, but you need a path to actually achieve them. That is where short-term goals come in. Your short-term goals should be the milestones to get to your long-term goals.
Once you have determined your long-term goals, you can work backward into your short-term goals. For example, let’s say your goal was to increase profits by 50% in three years. That is a solid long-term goal, but there are a lot of steps to make that a reality. One of the main determinants of your profits is your prime cost. Maybe to increase profits 50% in three years, we have a sub-goal to decrease prime cost from 62% to 50% during that period. We can further break that down to a goal of 57% after year one, 53% after year two, and 50% at year three. So, if this is year one, our goal is to decrease prime cost 5% this year.
Regardless of what your actual goal is, breaking your long-term goals down into smaller, achievable, short-term goals turns what seems like an insurmountable task into doable chunks that give you wins along the way. Those wins serve as a way to energize you, build your confidence that you can reach the bigger goals, and help your team maintain their passion.
What Are SMART Goals?
SMART goals are a specific framework that can be used to set goals, focus your efforts, and increase your effectiveness. SMART stands for specific, measurable, achievable, relevant, and time-bound. By creating goals that meet these five requirements you can create goals that you can meet and that will energize you and your team.
Specific
Your goals should be specific. You need to know exactly what you are trying to achieve. Saying your goal is to “make more money”, “create a better work environment”, or “improve customer service”, isn’t a goal. Those statements could mean almost anything. Maybe instead of “make more money” your goal is to “lower prime cost” or “increase happy hour sales”. The more specific you can be, the better off you are. “Decrease beer cost” is even better than “lower prime cost”.
Two components of a goal you should consider are: the who and the what. Who is doing the action to achieve the goal and what are they doing? Sometimes in a small business the who is implied. If your goal is to reduce draft beer waste, the who is going to be your managers and bartenders. Likewise, if your goal was to increase net promoter scores among guests sitting in the dining area, then the who would be your servers and managers. You can leave it implied or define it. But, always make sure your goals have a who and what.
Measurable
Your goals must be measurable. You have to be able to objectively prove that you have achieved your goals. For instance, if your goal is to “have better customer service”, what are you measuring to determine that? Is it net promoter scores? Or, maybe it is the guest check average? Or, the number of times you see your regulars in a week?
If our goal was to “decrease beer cost”, we have a pretty easy-to-measure goal on the surface, but there are a lot of different ways to measure the factors that affect our beer cost. Maybe our goal becomes: “To decrease beer cost through reducing draft beer waste and reaching a draft beer yield of 92.5%”. Rather than look at every potential way to control beer cost, we have now defined one specific measurable.
Achievable
Your goals have to be something you can reach. I am not a particularly athletic guy, and while I live in the woods and love to hike, I am not a mountain climber. If I made a goal to climb Mount Everest next year, it would be laughable. There is no way I can build the skills and achieve the conditioning needed to safely climb Mount Everest in 12 months. In fact, if I set that as a goal and tried hard to achieve it, the goal is likely to demotivate me, as time passes and I realize more and more how much I am going to fail.
In your bar, you need goals that you can achieve. Winning gives you the energy to move forward, losing doesn’t. If you set goals you will never reach, rather than motivating and pushing you forward they will do the opposite. That is why it is important to set lofty long-term goals and then short-term milestone goals that get you to that long-term result.
Our example “To decrease beer cost through reducing draft beer waste and reaching a draft beer yield of 92.5%”, we have a goal of 92.5% draft beer yield as our measurable goal. That is achievable. It could probably be pushed to 95% or higher, but given that many bars are running systems that yield under 90%, and some even under 80%, it is an appropriate goalb .
Relevant
Goals need to be relevant. That seems like an obvious statement, but a lot of people and organizations make goals that are not. You can look at relevant in two different ways. The goal needs to produce a result that matters and the goal needs to fit in with your longer-term plans.
If we decided that for our beer yield our goal was going to be to yield more from lager kegs than stout kegs, that would not be a relevant goal. The type of beer we are pouring has little to do with yield in general and is not going to help us achieve our long-term goal of reducing prime cost to increase profits.
If we go back to our goal “To decrease beer cost through reducing draft beer waste and reaching a draft beer yield of 92.5%”, it is relevant to reducing prime costs. The goal itself is to reduce a cost that is a component of prime cost. In this case, our goal passes the test.
Time-Bound
A goal without a timeline will be pushed and pushed and pushed, and the goal will still be a goal a decade from now. Most of us are great procrastinators. Throw into that the normal crazy schedule of a bar owner, the five fires you had to put out just this morning, and the salespeople beating down your door, and you only have time for what you choose to prioritize. So, if you want any chance of accomplishing your goals you have to make them a priority, and the easiest way to do that is to give yourself a deadline. Deadlines are one of the best motivators to take action.
You just need to make sure that your deadline is reasonable. If we want a deadline for achieving a 92.5% draft beer yield, we probably want to give ourselves a few months to fully get there, not expect that it can be fixed in a few days. First, we will need to root cause the issues, then develop countermeasures to increase our yields and train everyone on them. Then, we have to test those countermeasures and make sure they produce the results we expect. It is going to take some time. But, how much time, in this case, will depend on just how many draft beer taps you have, how many bars are in your establishment, how many bartenders you have, and so on.
It would be very reasonable to expect this result within a quarter, regardless of exactly where you are starting from. So, we could update our goal to: “To decrease beer cost through reducing draft beer waste and reaching a draft beer yield of 92.5% within the next quarter.”
Reaching Your Goals
There are a few things you can do to make sure that you reach your goals. You need to document them, track your progress by using specific KPIs, and lastly celebrate your wins, especially those that are milestones to your larger goals. The more you make reaching your goals part of your daily workflow and the more you focus on pursuing specific improvements to meet specific metrics, the faster and more impressive your results will be. You manage what you see.
Document You Goals
Documenting your goals does not have to be a difficult task. You just need to write them down somewhere. You could do this digitally, like on a spreadsheet, or physically, like a poster board on the wall of your office.
Frankly, while I do most things digitally since I consult the majority of my clients remotely, I think the best way to document your goals is on a physical poster board. This way you see it in your office every single day. Your goals are always right there in front of you. Plus, you can use sticky notes to show progress, blockers you are running into, and other notes on your goals.
However you decide to document your goals, it is important that you have a single source that shows all of your goals, your progress toward those goals, and what still needs to be done. A visual resource on the wall is going to be easier for you and your team to quickly understand, than something digital.
Track Your Progress
You need to know where you are in your journey to reaching your goals. It’s important that you know both the progress you’ve made and the gap that still exists to reach your short and long-term goals. By displaying your progress, where your team can see it, you create motivation. Both motivation to reach for where we want to be and motivation because we know how far we have come.
While you can track your progress in multiple ways, I prefer to track it on the same board I am using to document my goals. This way I have one resource that I can refer to that shows me and my team where we need to go and where we’ve come from across every goal that we are working on.
Celebrate Your Wins
In order to build momentum as you start to reach your milestones and your larger goals, it is important to celebrate every single win regardless of how big or small it is. This is how you build momentum in your improvements. It creates an engine that drives you faster and faster to reach the objectives that you have set out to reach.
Celebrate every win. Reward the people that got you there. Publicly congratulate them in front of the rest of your team. And build that momentum.
Final Thoughts
Your bar will never make more profit, improve customer service, or achieve anything without effort. You need tools to motivate yourself and your team to excellence. By setting SMART goals, you are creating the groundwork for your success. Always set lofty long-term goals, and then set milestone goals to help you get there.
If you set the right goals and put a system in place to help you achieve them, you will be able to do more with your bar and your brand than you ever thought possible. Goals are the keys that unlock prosperity.
If you want more tools to help you set and achieve your goals or more information on how to develop visual aids to help display your goals for your team, make sure to schedule a free 30-minute strategy session with The Bar Business Coach.
