You've probably learned by now that business ownership is a trial-and-error kind of undertaking.
The best business lessons are often those that are learned in the context of real world application. As you mature as a business owner, you knowledge base increases and you become more capable of making decisions that have a positive impact on your company.
Business planning is an area in which experience matters. Although planning may seem intuitive, business owners frequently plunge headfirst into a planning process without understanding what it really involves. The result is a deeply flawed planning process that is incapable of delivering the desired outcomes, leaving a trail of frustration and pessimism in its wake.
One of the most common planning mistakes inexperienced business owners make is to confuse business goals with business strategies. Rather than taking the time to learn from more experienced entrepreneurs, young business owners often adopt an "if you build it they will come" attitude that completely disconnects their objectives from the processes that are required to achieve them. In some cases, misunderstandings about goals and strategies persist to the point that the company is never able to move beyond its initial stage of growth.
Business Goals vs. Business Strategies
From the outset of the planning process, it's important to create a mental firewall between goals and strategies. Business goals describe desired outcomes. Those outcomes can (and should) stretch your company's abilities, but they should be achievable with the right amount of effort and intentionality by your and your staff.
Business strategies, on the other hand, describe the processes you will use to achieve your goals. A typical strategic planning process addresses the resources, activities, and timelines that are necessary to transform goals into business realities.
A good example might be a business owner who is interested in growing his corner grocery store. Recognizing that an outcome of generic business growth is too vague to be effective, he sets his sights on growing sales by 30% over the next two years. That's his goal – it's aggressive, but he thinks it's achievable.
But to get there, he knows that he'll need to ramp up his marketing efforts, monitor his inventory, and maybe even expand his product offerings. Eventually, a plan begins to emerge. That's his strategy, which he formally documents in a strategic plan and communicates to his employees.
At any point in the process, his goals and/or strategies may need to be adjusted. But now that he has differentiated goals and strategies, he is equipped with the tools needed to drive the process forward.