Goal setting is a must for small business owners, and it’s a topic I’ve touched on countless times over the years. There are so many formulas, frameworks, and strategies floating around, but the truth is… goal setting for a small business owner is different. It has to be. Why? Because for us, life and business aren’t separate—they’re completely intertwined.

That’s why one of the most crucial aspects of goal setting is grounding your goals in reality. And let’s be honest—reality is a pretty broad concept. To help narrow things down, I’ve identified three specific areas to think about realistically as you map out your goals for the year ahead.

The Reality of Your Priorities

We all have different priorities when it comes to our lifestyle, family, health, and business—and those priorities shift as life changes. What mattered most last year might not be at the top of your list this year, and that’s totally okay! But here’s the catch: if you’re not realistic about those shifting priorities, it’s going to trip you up when it comes to accomplishing your goals.

Life is constantly evolving. Maybe this past year, you welcomed a baby, bought a house, adopted a dog, or dealt with unexpected health challenges. These changes—whether they’re joyful or challenging—can easily pull your focus away from your goals. This becomes especially tricky when your business goals are more ambitious than your current lifestyle can support.

On the flip side, maybe your personal life has been steady, but your business has experienced big changes. You might have landed (or lost) a major client, introduced a new product line, or completely revamped your strategy. Even positive shifts like hiring new team members or implementing new software come with adjustment periods. Your goals need to reflect those realities too.

The Reality of Your Actions

Alright, tough love time: your actions always follow your priorities. If your actions and priorities don’t align, it’s time for an honest check-in—because chances are, you’re telling yourself something is a priority when it really isn’t.

Effective goal setting isn’t just about dreaming big; it’s about breaking those dreams into monthly, weekly, and even daily actions that fit realistically into your life. What sounds great on paper might not work in the reality of your day-to-day.

For example, let’s say your big goal this year is to double your revenue by launching a new product or service. That’s exciting! But if your current schedule is already packed with client work and admin tasks—and on top of that, you’re not sleeping well, waking up exhausted and drained—where will you find the time (and energy!) to develop, market, and launch something new?

Does this mean you can’t double your revenue or launch a new product? Not at all! But the first step is to take an honest look at the realities of your life and your daily habits. Factor those into your planning and approach your goals in a way that sets you up for success.

Start with smaller, manageable actions—like outsourcing your admin work or addressing the root cause of your sleep issues—before tackling your bigger goal. By setting a strong foundation, you’ll make it far more likely that you’ll achieve what you’re aiming for.

The Reality of The Economy

This last area is more big picture than the others, but it’s just as important: the economy. As you set your goals for the year, it’s crucial to factor in the broader economic environment and how it might affect your business.

We’ve just come out of an election cycle, and regardless of how you feel about the outcome, one thing is certain—change is ahead and uncertainty is in the air. Over the last four years, shifts in the economy likely influenced how you operated your business, and the next four years will inevitably bring new challenges and opportunities.

Every industry and niche is impacted differently, so I can’t tell you exactly how the coming changes will affect your business. What I can tell you is that now is the time to evaluate, plan, and prepare as much as possible. Thinking through potential challenges—and brainstorming ways to adapt—will help you minimize negative impacts and take advantage of any opportunities that come your way.

Final Thoughts

I encourage you, small business owner, to take all of these realities into account as you set your goals for the year ahead. Have those real, honest conversations with yourself and create goals that are grounded in reality. Stretch yourself for what you want—but don’t stretch so far that you burn out or feel stuck.

Remember, progression is always better than perfection. Small, steady successes will take you further than chasing lofty goals that aren’t achievable right now.

Here’s to a thoughtful, balanced, and prosperous new year!