Annual Business Planning: 5 Steps to Plan for a New Year

Annual business planning is a key activity that every business should set time aside to do once a year. But let’s say you’ve set the time aside – what are you actually meant to do as part of the annual business planning process? Well you are in the right place as in this blog post I’m going to share the steps to follow when annual business planning. Keep on reading to learn how to plan for a new year.

 

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What is annual business planning?

Annual business planning is where a business creates a roadmap to achieve the business goals that have been set for the upcoming year. Annual business planning enables a business to think about what it would like to achieve over the next 12 months and make decisions, and write down, the actions that will be taken over the next year.

 

ANNUAL BUSINESS PLANNING: 5 STEPS TO PLAN FOR A NEW YEAR 

Step 1: Review the last year and understand the business’ current position 

 

To successful put together a plan together for the year ahead you first need to review the last year and understand the business’ current position.

 

I’d highly recommend that you do an annual business review. In this review you’d look back over the goals that had been set the year before and see what has and hasn’t been achieved. You’ll also review key metrics in the business to get an understand of how the business’ performance has changed over the year and what the current performance is.

 

The purpose of reviewing the year before is to ensure you really understand what did and didn’t work, and that everyone has a good knowledge of what is happening in the business right now. It is too easy when working in the business to make assumptions and not have an accurate understanding of what is happening in the business. There is no point putting a plan together to get from Point A to Point B, but Point A isn’t accurate. That’s why it is so important to ensure you do a proper annual business review before doing any annual business planning.

I go into more detail about how to do an annual business review in this blog post – How to do an annual business review.

 

Step 2: Set goals for the year ahead 

Once you are clear on the current position of your business it is now time to focus on the future. What do you want the business to achieve over the next year? At this point you might right down a number of possible goals and then refine during the planning process as it can be that individually goals makes sense, but as you start planning you realise that based on resources it may be that some goals are more of a priority.

There are whole range of goals you can set as a business, but here are some of the common type of goals

 

Financial 

Every business needs to have clear financial goals. There are numerous financial goals that you could set for your business. For example, you could set a goal based on the overall revenue (to generate 100k, 250k, 1m etc). You could also set goals around the amount of profit you make, the amount of money that will be reinvested in the business, and if you are the business owner you might want to include a clear financial goal around the amount of money you’ll pay yourself over the coming year.

 

Impact – Number of clients / customers etc

Another very common business goal is to set a goal around the impact of the business. This is usually aligned with the bigger mission of a business. For example, if you’re a money coach who wants to help 10,000 invest $100k over the next 5 years then to ensure you stay on track you might set the goal of helping 2,000 people in the coming year.

 

Service / Product

Some businesses will set goals around launching a new service or product. For example, it could be that the aim is to publish a book, launch a mastermind or run an in-person retreat.

 

Lifestyle

If you are the business owner then it might be that you also set a goal that is related to you working in the business and how that impacts your lifestyle. For example, you might set a goal to take X weeks off for holiday, or to work a maximum of X hours per week.

 

TAKE YOUR ANNUAL BUSINESS PLANNING TO THE NEXT LEVEL BY WORKING WITH ME  – BOOK A 2025 STRATEGY DAY I’ve been running annual planning strategy days with small business owners since 2019. Doing your annual business planning with someone external from your business and with tons of business and marketing experience and expertise makes a massive difference. I’ll support you to face the facts about your current position, dream big about the future and get really strategic about what you need to do in order to achieve those big business goals. So if you are planning on preparing for 2025 and you want to get your annual planning done in the most effective and efficient way, book a 2025 Strategy Day. For more information and to book click here.

 

Step 3: Put together the plan

Now that you are clear on where the business is right now (Point A) and where the business ideally will be in a year’s time (Point B) it is time to create a plan to bridge that gap. Depending on the nature of your business (services/products you offer, size of team, revenue) this level of depth that you need to go into will be very different.

 

Here is an example of what I cover when working with a small, service-based, business.

 

Offer Suite (Services and Products)

What will the business be selling over the upcoming year? Will it be the same services and products as the year before or will there be changes? It might be that you decide to stop selling something and introduce new things. Knowing what will be available to sell at what point in the year is key.

 

Pricing 

Once you are clear on everything you’ll be selling across the year it is time to focus on pricing. You’ll need to have a set price for every product and service. It may be through the year you intend to make changes. Again this should be noted as that will impact financial forecasting.

 

Marketing and Sales

At this point you are clear on the volume of sales the business needs to make so now you can plan what marketing and sales activity. It may be that you have offers that are always available and have an always-on or evergreen marketing approach. It might be that in the year you are introducing new offers and will do launches. What marketing channels will you use to market your offers?

 

Resources

For all of the above to happen you’ll need to think about the business resources. Is there capacity for the current team to be able to implement all of the above? Does the current team have the necessary skills and knowledge to implement this? Or will you need to get additional support? Do you have the right technology, software and tools in place to be able to deliver everything that is planned for the year ahead?

 

Financial Forecasting 

First the focus will be on the income side of the financial forecasting. Look back over your historical data, revenue goals and impact goals and determine what the sales targets would need to be on a monthly or quarterly basis. At this point, it may be that you discover the goals of the business with the originally intended offers and pricing don’t work together. Adjust as necessary until you get to a point where you are confident with the offer suite, pricing and goals.

 

Then you’ll need to focus on the expenditure side. Given the resources you’ll need and the sales and marketing activity, how much will it cost the business in order to implement the plan.

This should enable you to then work out the possible gross profit for the business, and you can even go further and do a month-by-month cashflow.

 

Step 4: Create an annual timeline

From working your way through all of the sections in Step 3 you’ll have made decisions for the upcoming year. Taking that information and plotting it onto an annual timeline will make it easier for everyone to be able to see what is happening at a glance.

 

Also, when creating an annual timeline you’ll start to see points where there may be capacity issues and crunch points. For example, there is a month where lots is happening, but the month before or not it is quiet. This then gives you the option to think about whether anything can be moved, or whether you need to get in extra support for that period of time.

By creating an annual timeline you’ll also be able to include clear milestones that will help with the monitoring process.

 

TAKE YOUR ANNUAL BUSINESS PLANNING TO THE NEXT LEVEL BY WORKING WITH ME  – BOOK A 2025 STRATEGY DAY Does the thought of putting together an annual timeline feel like too much? Let me do it for you! During a 2024 Strategy Day we’ll discuss al the key areas that need to be covered when annual planning. Then within 48 hours you’ll get your annual timeline and strategy document delivered straight to your inbox. You don’t have to do your planning all by yourself, in fact, you shouldn’t. Let me make preparing for 2025 a joyful and productive experience – book a 2025 Strategy Day. For more information and to book click here.

 

Step 5: Monitor

Wouldn’t it be lovely if you could spend some time doing your annual business planning, have your plan and then just be able to blindly implement it? It would be lovely but that isn’t the way it works.

 

A lot can change in a year, which is why it is important to monitor how everything is going against the plan and then adjust as necessary.

 

I actually recommending using a combination of an annual plan and a quarterly plan. A quarterly plan will allow you to refer back to the annual plan and then go into more detail which will help individual team members know what they should be focused on by a week by week basis or month by month basis. Also by reviewing your annual plan every quarter if something isn’t working you can adjust accordingly.

 

You can find out more about quarterly planning here.

 

Monitoring the business on a regular basis is key. You can set metrics that are related specifically to each business goal and then review on a regular basis, ideally weekly, but you may choose monthly. You can also review progress based on the milestones set in the annual timeline.

 

That’s it. You know now the 5 steps to take when doing annual business planning.

 

If you aren’t already doing annual business planning in your business I know it might sound a bit overwhelming, but it is a game-changer for your business. By setting goals and then taking the time to plan the route the business will take to achieve those goals you are going to save so much time and resources in the long run.

 

Let me know in the comments what your biggest take away is. 

 

I’m on a mission to make every small business owner take planning seriously and once a year have an annual business planning day.

 

There are two ways I can help you

 

DONE-WITH-YOU

Running an annual business planning day by yourself can be tricky. You might not have the analytical mind to properly review your finances and marketing data. You might have a money mindset that impacts your approach to pricing. You might not have the knowledge for creating an effective marketing and sales strategy. And you struggle to take your big goals and create a plan to achieve them.

 

If you think any of those things might hold you back then I can help you. You can book a 2024  Strategy Day with me and I’ll guide you through the process, ensure that you don’t skim over the bits that aren’t your strengths and be the external support to ensure you have strategically thought through everything and have the best plan possible for the year ahead.

To find out more, and to book a 2025 Strategy Day click here. 

 

DO-IT-YOURSELF

Do you annual business planning by yourself by having an annual CEO Day. You can find out about how to structure your day this blog post will help – How to structure your annual CEO Day.