Business Strategies vs Goals. Why You Need Both!
What is a strategy? How does it compare with or relate to a Goal? Which comes first, a goal or a strategy? Can you run a business without a strategy? Without Goals? Is this post about an academic issue that only applies to Apple and Boeing?
On day one I laid out the basics of goal setting. It is a pretty big deal to really sit down and figure out what matters to you personally, and what your major goals are for you, your family, and your business. Some folks are afraid to do this. Some just can’t seem to find the time. Some seem to feel that goal setting is not important. I make the claim that goal setting is the most important thing you will ever do to effect the success of your enterprise.
In case you have set your goals, what next. I know that for me, there is a tendency to immediately go into action. But going off half-cocked will undermine much of the benefit of having set goals in the first place. Do I mean by this, that if you set goals, but don’t follow through with strategy and tactics, then don’t bother to set the goals in the first place? Not even close! Goals are the most important, then strategy, then tactics.
Back to the original question: What is a strategy? A strategy is the meat on the bones of the goals. It is the how of the what. Each goal should be taken individually from the top priority to the least. How can the company most effectively use the resources available to it to accomplish the goals. If the goal is to achieve an increase of 20% in sales, how will the company do that. Possibilities could include a larger territory, new products, increased prices, more sales units or dollars per invoice, more dollars per client per year, more expensive products, more sales people, etc.
An evaluation of the choices should result in realistic approaches. If there isn’t much money to spend, then it might be better to increase prices, or to work harder to increase the average ticket, neither of which requires any expense. However, it is important to also measure the likelihood of success of each strategy as you determine which to follow.
At this point you might have a sheet of paper or a spreadsheet with a set of goals, and each of those goals has a list of strategies under it. You might also include a dollar amount that can be invested in each.
- Raise prices – Obvious concern as to whether sales might drop
- Increase class size – What will cost of acquisition be for additional students. Benefit is that if classroom will accommodate more and if teacher can handle more, there is no incremental cost.
- Add more acting classes – Same issue regarding cost of acquisition. Might be additional cost to rent more studio time and or teacher time.
- Sell materials or services to current and past students – no idea if the materials will sell, but cost to produce is low, therefore low risk. Selling services has no risk.