Using Maslow's Hierarchy of Needs in Business Goal Setting

Many people have heard this quote: “A goal without a plan is just a wish.” This applies to many areas of life, but especially to small businesses. Setting goals backed by a detailed plan for execution can be a lifesaver for small businesses, especially in the first few years. 

Although only 20% of businesses fail in the first two years, this number jumps to nearly 50% within the first five years. Long story short, lots of new businesses don’t make it.

Sounds grim, right? Not all businesses are destined to fail. Those that set smart goals for their business are more likely to succeed. And a big part of realistic goal setting actually stems from understanding human motivation. That’s where Maslow’s Hierarchy of Needs comes in. This guide explains what the Hierarchy of Needs is and how business owners can take advantage of its principles to set goals well.

Maslow’s Theory: The Hierarchy of Needs

Developed by Abraham Maslow in 1943, the Hierarchy of Needs consists of a five-tier model of human necessities, visualized in a pyramid structure.

The bottom of the pyramid covers basic human needs, the highest priority ones that humans must have for survival. Meanwhile, the top of the pyramid covers needs that aren’t necessary for survival. For example, the physiological needs like food and water (at the bottom of the hierarchy) are necessary for survival, while self-actualization (at the top of the hierarchy) is nice to have, but it’s not essential to human survival. 

Starting from the bottom of the pyramid, the Hierarchy of Needs is as follows: 

• Physiological needs: This category includes basic needs required for survival, like food, water, and sleep. 
• Safety needs: This includes the necessity of shelter and safety, as well as financial security, emotional security, health, and well-being. 
• Social needs: This category covers the human desire to belong, feel loved, and have intimate relationships. Having these needs fulfilled motivates other behaviors.
• Esteem needs: This category can be broken down into esteem for oneself, like dignity and accomplishment, and desire for respect from others, like status and prestige.
• Self-actualization needs: The highest on the pyramid is self-actualization, when one feels fulfilled and that they are achieving their full potential. At this highest level, a person realizes their potential and seeks personal growth or creative expression.

So, how do these needs relate to a professional life? To build a sustainable business and reach the ultimate level of personal fulfillment, a business owner needs to meet certain needs. It’s possible to use Maslow’s hierarchy to build a “business hierarchy of needs.”

• Physical: This covers the basic needs for a business, such as making sure the business income covers expenses, such as rent and utilities.
• Safety: In a business context, this could mean reaching a safety net goal that can cover any unexpected expenses or losses, allowing a business to continue growing and expanding should a minor hiccup occur. For example, this might include having a big enough cash reserve to feel confident in the employee’s job security.
• Social: Once a person has their survival and safety needs met, they seek relationships and companionship. A business might do this by establishing a strong social media presence and joining business development and networking groups. 
• Esteem: A person’s self-esteem can be compared to a company’s brand. As a small business or entrepreneur builds a solid reputation, their professional growth opportunities will continue to expand as brand awareness increases. Their company (and their professional reputation) may hold a certain status, which fulfills the desire for esteem. 
• Self-actualization: A company or consultant can reach a point of self-actualization, perhaps through a certain revenue goal or a more abstract goal of being recognized as an expert in the field. Another example may be when a small business owner reaches a certain point of brand recognition or feels like they’re truly carrying out their mission statement. 

So, how can a business owner use this tool to set and reach business goals? Keep reading to learn how.

Translating Maslow’s Hierarchy of Needs Into Business Goals

With a basic understanding of the hierarchy of needs, a business owner can rework the five-tier pyramid into more of a business goal-setting theory. This hierarchy can help a business owner break up different goals into unique levels, plotting a course for the company.

Physiological Needs: Business Basics

Much like the hierarchy of human needs, it’s hard to think about achieving goals if basic needs are not met. In business terms, this means setting up a safe and legal work environment. Does the business have the correct tools to do the best job? Does it have proper heat, AC, and lighting? Can the business pay its rent and basic operating expenses?

Safety Needs: Healthy Work Environment

Next on the pyramid is creating a safe and secure work environment for everyone on the team. Do employees feel job satisfaction? Do employees treat each other with respect? Do they receive competitive salaries? Do employees feel they’re treated like people, or are they just treated as valuable tools?

Social Needs: Feeling of Belonging

If a business has employees, building a strong company culture can be a big boost to employee motivation, and an engaged workforce builds productivity. But it’s also good for a business to be connected to its community. This might mean that the business joins the local chamber of commerce. Or maybe the owner will join a networking group to help foster positive relationships with other businesses and the community.

Esteem: Building a Good Reputation

Building a good reputation can be done in many ways. Perhaps the business owner has gotten their company heavily involved in local charities, or they have positive online reviews on how they treat their employees. But ultimately, a good reputation comes down to a person’s ability to run their business well and how they treat others.

Self-Actualization: Branching Out

Once a business owner has established all the lower level needs, they’re free to focus on the bigger picture and chase other goals. That might mean the business owner decides to expand their business through franchising and established a bigger market share. or maybe they’d step back from daily operations to do consulting or freelance work. Or maybe the business owner decides to sell the business to begin a new project or to retire. At this point in the pyramid, a business owner is bound to be proud of their accomplishments.

Create goals for a company today

What can a business owner achieve by applying Maslow’s Hierarchy of Needs to compile such a high level of thoughtful goal-setting? It depends, but most business owners who use this method can at least create an actionable plan for themselves.

Every business owner, consultant, or freelancer deserves a chance to achieve the level of self-actualization that’s attainable with proper goal setting. But no entrepreneur has to go it alone. There are resources out there that can make self-actualization easier. ZenBusiness is ready to provide all the resources an entrepreneur needs to run their business so they can focus on developing and meeting their business goals.