As we transition from one business year to the next, many organizations and entrepreneurs embark on annual planning and budgeting processes. First of all, meetings are held. Then, spreadsheets are prepared, behind-the-scenes negotiations kick in, crystal balls are consulted and past wars are re-fought. Finally, the result is usually a business plan that is outdated from the moment it is complete and often lacks buy-in.
Traditional business plans are challenging for startups, rapidly growing businesses or organizations going through major transformation. In the end, it is important that everyone is “on the same page” and operates within a common framework for decision making. With facilitation, leadership teams can complete their “one page plan” over a 2-day period. Solopreneurs can often accomplish the same result with a half-day of focused effort. The resulting plan is a fluid document, evolving every week of the year based on actual results, challenges and new opportunities.
Strategic elements of the one-page business plan are often carried forward over many years.
While discussed and possibly refined each year, these elements generally remain as core foundations to the organization. Strategic elements of the business plan include:
- Core Values and Beliefs
- Brand Promise
- 3-5 Year Targets
- SWOT Analysis
Spend time in discussion about the Strengths and Weaknesses of the business, and the Opportunities and Threats facing the organization. Consider assigning team members with homework to research these categories prior to the meeting. Keep the strengths and weaknesses discussion balanced with both positive and negative perspectives, and look at competitive, industry, economic and technology trends when discussing opportunities and threats.
Once the foundation, direction and environment is clear, the annual plan fills in the gaps.
Annual elements of the business plan include:
- Annual Theme
- Key Initiatives
- Critical Numbers and KPI’s
- Celebrations and Rewards
Key Initiatives are broken down by quarter and by month, then by team and individual. This exercise often brings to light issues with resources or sequencing of workflow. As a result, these challenges can be resolved in advance and resulting expectations are much more realistic.
The numbers that will be used to track progress and performance should be identified, and targets set.
Critical numbers and key performance indicators (“KPI’s”) should be a combination of leading and trailing indicators, and often fall outside traditional accounting systems and historical financial reporting. Above all, your annual plan should focus on real time reporting of the numbers people need to know every single day to make business decisions and evaluate performance. These numbers should be shared WEEKLY, if not daily.
Celebrations and rewards are often the most overlooked element of the annual business plan.
Make sure your plan includes how you will celebrate achievement of both individual elements of the plan and the big, annual goals. A balance of near-term and long-term celebrations will help team members view rewards as achievable and meaningful. Celebrate often, as long as the recognition is sincere and rewarding the right behaviors and actions. Consider rewarding action ahead of results, if there is a long time period in between and the linkage is clear. Celebrations and rewards don’t have to be expensive or always monetary. Think about the various ways people feel appreciated, and show creativity and diversity in your rewards.
Use the annual plan to guide quarterly, monthly and weekly team meetings and accountability.
The annual plan should guide business decisions, focus and investment. However, when the plan needs to change, make the change. Don’t spend 11 months reporting why the organization is behind plan because a beginning of year assumption was wrong. Made adjustments right away and don’t allow excuses to linger. Learn from the variances and adjust the annual plan to keep moving forward towards the vision and multi-year plan. After all, the only thing we know for certain is that reality will never, ever perfectly match the plan.
Jennifer Turnage is an entrepreneur, business advisor, and author of Honey, You Got This! Technology Made Easy for Network Marketers. As the Cofounder and CEO of myBeeHyve, she combines her experience from multiple tech company exits with her mission of empowering individuals to achieve financial independence through entrepreneurship. Download the FREE myBeeHyve app in the Apple or Google Play app stores to manage your prospects and customers with ease. Connect with Jennifer on LinkedIn, Facebook or Twitter for support on your entrepreneurial journey.