How to Design Your Annual Plan

Note: This blog first appeared on the Ellevated Outcomes website.

Have you updated your annual business plan yet? It’s not too late to start — and these tips will help you design an effective business plan.

While many entrepreneurs start businesses because they hated working in a corporate environment or didn’t like being told what to do, I was not one of them. Nearly every day, I think of how lucky I am to have had the experiences, learnings, and structure that I did for fifteen years. Today, I want to double emphasize that last word: structure.

I’ve learned over the past three years, that the right structure is a gift to its business owner. And over the course of a year, a world of freedom and creativity is opened up to me, simply because for one week each year, I take a “CEO retreat” to hunker down and design my annual planning.

Preparation
To begin, I have three important suggestions. I realize that they’ll take some planning and coordination to pull off (and don’t make yourself crazy; doing something is better than doing nothing). But they’re important and can be the key to some pretty masterful insights, so give them a shot:

1. Take time off to do this work. And what I mean is: don’t do your everyday work, while you’re planning your company’s strategy. The whole point is to pull out of the weeds for a few days and see the business from a bird’s eye view. Staying in the minutiae clouds our creativity. If you need help with this, I happen to know of a great OOO template… 
2. Remove yourself from your normal environment. Personally, I like to travel (an easy and safe way is to rent a drivable Airbnb). Being away from our everyday routine and experiencing a different place / culture innately sparks new ideas.
3. Take four days. You will be amazed at the vastness of work we can accomplish, with the right space. The time and $500 that I spent on travel last year, was by far my best 2019 investment. This simple (but not necessarily easy!) week of thoughtful, proactive planning is the practice that has helped us grow and continue to make investments (hello Sarah Patton and  Nashville Design Week!)… even in 2020.

Annual Plan Day 1: Update 3-Year Goals

1. Do a personal check-in.
I like to start with the personal side of things. After all, if you have started a business, chances are that part of your motivation was to live a certain way. Let’s not lose sight of that! I used to be really into writing out my personal vision and goals (if you’re interested in that path, Lululemon has a fantastic set of worksheets).

But lately, imagery has resonated more with me. You can cut out images from magazines, use Pinterest, or… just last week, the wonderful client Thank Dog! Training introduced me to this digital vision board. It’s so cool!

Then, move onto your business.

2. Revisit your business’s vision, mission, and values.
Here are some prompts to consider…

Does anything need to be refreshed or tightened up? Which of your language seems to really resonate with people, internally and externally? What are examples from the past year where your company really lived out its mission and values? And when did it fall a bit short? Over the past year, did you move closer to — or further away from — your lofty vision?

3. Temperature-check your current reality.
E-Myth has some great tools to help you pinpoint how you’re working, day-to-day (and where there’s room for improvement). I recommend using their Business Owner’s Roadmap to draw out a couple things:

• What does my business look, act, feel, and perform like?
• What parts of my business model (e.g., marketing, finance, technology, product, etc.) need to shift, in order to make my business look, act, feel, and perform the way I envision?

Depending on how much experience you have with this type of thing, you may want to complete the entire worksheet packet in detail; take what you need, and leave what you don’t.

4. Set high-level, 3-year goals.
Contrary to my analytical nature, I like using steps 1-3 to start with an intuitive 3-year goal. If you’ve completed the “warm up” that I suggest, you’ll be surprised how well and naturally the goal setting will flow.

Ensure that your guiding goal is SMART and high-level.

Then, we break it down: what has to happen, in order to reach the goal? Ask again: “What parts of my business model need to change or improve? What are the business’s 3 priorities?“

(Sidenote: you’re probably seeing now why I suggest a few days. We just finished day #1! You should be excited and exhausted. This is deep thinking and a lot of work).

 Annual Plan Day 2: Create Next Year’s Plan

Okay, hopefully you got some good sleep last night because this is where ideas approach action. Generally, day 1 is all about ideas; they have been lying dormant in our hearts. And now it’s time to get buy-in from our minds.

1. Flesh out your 3-year goals.
Our ending point from yesterday was 1 SMART, high-level goal and 3 specific goals or priorities that stem from it. These answer the question: “What has to happen, to make my overarching 3-year goal come true?”

Last year, here was our 3-year goal:

By December 2022 our ambition is to be a $1M business.  This growth will be fueled by discipline, excellence, and focus. Our values of integrity, tenacity, inclusion, honesty, and abundance will be key enablers of our business model.  We believe that how we conduct ourselves in business is just as important as what we’re accomplishing.  We believe that it’s possible to hit ambitious goals and operate with the highest levels of integrity — delighting our clients, every step of the way.

So then the question became, “What has to happen to be a $1M business that looks, acts, and feels this way?”

The 3 goals that enable this BHAG are:

• Launch a new product, responding to a latent need that we observe in our clients; it will form 35% of our revenue.
• Build a team of 6, to serve more clients and continue enhancing the client experience.
• Grow the top line, while pegging profit at 15%. We use profit to reinvest in the company, give back to our team, and donate to causes that are aligned with our values (after all, we’re a wannabe-PBC).

2. Break down your goals.
Break each of these 3 goals down into 3 smaller goals. You can do this by continuing to ask, “What has to happen to make that happen?” As a general rule, I say that these goals should fit into one of the Ps: people, product, placement (i.e., marketing), process, and/or profit. They’re surely all connected, but remember: the key is simplicity, so there should be no more than 3 priorities.

3. Work back to 1 year.
This will happen naturally as part of step 2. As you break down the goals into smaller stepping stones, the timing will become more imminent. If you’re answering the question, “What has to happen to make this [big thing] happen?” there will be a natural time progression, working you back in time. One year and one goal will build upon another.

Therefore, your ending point for day 2 is 3 refined and concrete, SMART goals for the next year.

Annual Plan Day 3: Check-in on this year

Bring out this year’s business plan (assuming that you have one). Go through each section and compare the plan v. what actually happened. Then, reflect on what you’ve learned and will adjust, going forward.

I like to make a simple grid with 3 columns:

• In-going goal / target
• What actually happened?
• “So what?” In other words, what action / adjustment will I carry forward?

Annual Plan Day 4: Action Plan (last day!)

Hopefully it’s starting to make sense, how iterative and natural this process can be, with the right space and attention. Each day and each step is a building block upon the last.

But since ideas are nothing without action, this last day is critical (but where most people lose steam). Please don’t be one of those people… you got this! Don’t let all your hard work and brainpower go to waste!

1. Build next year’s timeline.
Literally, draw out a timeline, quarter by quarter, month by month. The inputs to your timeline come from everything that you’ve built up; just look at them in reverse order now:

• Action items – day 3
• Next year’s concrete goals (and what needs to happen for them to happen) – day 2
• Business model changes needed to get to the 3-year goal — day 1

2. Plan what you need, when, and how you’ll celebrate.
As you look out over the next year, work through each month and list:

• What are the major milestones?
• What are the dependencies to hit these milestones? If the dependency is a biggie (like finding the perfect hire), what’s the backup plan?
• What resources do I need?

Then finally (and most importantly), how will we celebrate when we reach our goals!?

If you’ve made it through this entire article, thank you! I know that it’s a long one. It’s sort of like the annual planning work itself; it isn’t glamorous, and it’s not visible to the outside world.

However, here’s what I guarantee you: the time that you invest in a strategy and a how you’ll carry out the strategy is an investment that will pay for itself. And that, my friends, will be glamorous. Think about what it will feel like to roll into 2021 with confidence, clarity and control and look down, from your mountain of happiness.

And lastly, if you’re reading this and feeling overwhelmed by the steps, zigs, and zags, we’d love the opportunity to guide you! We’ve turned our tried-and-true process into a guided, self-paced, interactive course that is now available! You can register here; we’d love to have you (PS special bonus for registering before January 29th)!

Julie Sellers, Founder and CEO of Ellevated Outcomes, is a Nashville-based business adviser to professional services, design, and health and wellness businesses.