As any businessperson or entrepreneur knows, if you want to successfully scale your business, goals must be established. Objectives need to be set. Strategies and tactics must be in place. Each of these concepts plays a significant role in business planning – they set the very framework of guiding the direction of your organization.

And yet, it’s not uncommon for many businesspeople to struggle differentiating these terms from each other. Objectives may often be mistaken for goals, while tactics may be confused with strategies.

While these terms share similarities, discerning each for the unique concept it conveys helps paint a clearer picture of how businesses will achieve success. Below, we take a closer look at goals, objectives, strategies and tactics.

A goal is a broad outcome, which may take years to reach. It is often a brief, general and clear statement that illustrates what your business wants to do or where it aims to be. It is lofty and ambitious, focusing less on how your business will do something and more on what the desired outcome will be. An example might be that your organization wants to “become a market leader in its field” or “increase profitability.”

An objective is a measurable step taken toward reaching that goal. It is specific, actionable and defines progress made toward achieving your goal. If your company’s goal was to “increase profitability,” an objective may be to “boost revenue by introducing a new product in Q2” or “cut a percentage of overhead costs by the end of the fiscal year.”

A strategy is the approach taken toward achieving a goal. It focuses on how and less on what. Strategies can define your organization’s approach toward competing with other businesses in your field. They may guide the launch of marketing campaigns to influence customers and audience regarding the capabilities of your product or service. An example could be “inform customers of our new product launch through online and social media advertising.”

A tactic is an action or tool that an organization uses to achieve an objective associated with a strategy. A tactic is a what and not a how. While a strategy deals with the long-term direction of a business, a tactic takes advantage of opportunities as they happen and deals more with day-to-day matters. It’s important that tactics align with strategies and work in tandem – tactics serve as the action to a strategy’s larger approach. An example of a tactic may be after a bakery raises its pastry prices, a competing bakery that’s looking to increase revenue long-term slashes its pastry prices by 20 percent to capitalize on customer backlash.

It’s important to remember that each of these concepts relies on the other, as they all work in tandem to promote the advancement of your business. Organizations that understand and can differentiate these concepts are the ones positioning themselves for success and to best handle whatever the market throws their way.