Annual Planning

Man with laptop developing an annual plan during an annual planning meeting

A strong annual plan builds on the company’s broader strategic vision and core values while still providing specific goals, metrics, and budgets to guide managers and employees. If it’s doing its job, the annual business plan is also flexible enough to adapt to an unpredictable and often volatile market.

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What is annual planning?

An annual business plan is a road map for a company and its employees. It contains milestones that carry the plan forward through a series of smaller goals that lead to a broader vision of where the business aims to be by the end of the year.

When a new year arrives, many people make plans and resolutions for the coming 12 months. They look back at the previous year and consider what worked for them and what they want to improve. Then they plan what goals they want to achieve, from getting out of debt to losing weight to learning a new language. Similarly, a company or organization will use an annual business plan to tighten its belt, improve performance, and reach specific goals over the coming year.

Whether using an annual business plan template or working from scratch, a company will review the expectations and results from the previous year in order to create an annual plan that gives everyone in the organization a sense of where they’re headed and how they will get there.

Why annual planning is important.

An annual business plan empowers workers to set specific business goals based on the company’s overarching strategy, and it also holds teams accountable for achieving stated goals.

The annual plan connects directly to where a company wants to be in 3 to 5 years and defines what’s critical to achieve over the next year to progress toward longer-term targets.

A well-formulated annual plan also keeps the workforce united and focused, energizing them to be more productive.

Additional benefits of an annual business plan include:

  • Providing a stronger connection to the strategic plan
  • Putting the mission of the organization into daily practice
  • Providing workers with a clear sense of direction in their departments or roles

What’s the difference between an annual plan and a strategic plan?

In the strategic planning process , an organization describes or affirms its mission, deciding what it wants to achieve over the next few years (vision) and setting strategic priorities to help make that vision a reality.

The strategic plan works hand in hand with the annual business plan. The former provides an overarching vision of what the company wants to achieve, and the annual plan provides the nuts and bolts of the necessary work to be done over the coming year.

So, the annual business plan depends on the strategy for its priorities, and the strategy depends on the annual plan to execute its ideas about the organization’s vision, mission, purpose, and goals. Logistics, projects, allocation of resources, and timing are covered in the annual plan.

Preparing to create an annual plan.

Before you can look ahead, you need to first look back, take what you’ve learned, and recommit yourself to your company’s values and priorities. Thus, reviewing your old plan and assessing its results against expectations is an important first step.

You should also review your company’s:

  • Mission statement: This is a guiding declaration that describes  what your company does and differentiates you from your competition.
  • Vision statement : This is an aspirational statement about what your company wants to become—an important factor in setting the annual plan’s priorities.
  • Core values: These are the principles, beliefs, and philosophies that shape your company’s culture and support your vision for the future.
  • Financial information, including budgeting: This is important because annual planning is connected to the budgetary approval process for the next fiscal year, including anticipated revenue, expenses, and growth predictions.
  • Key problems and issues: By understanding what went wrong the previous year and the issues it faced, a company can offer remedies in its annual plan to improve future outcomes.

What is included in an annual plan?

There are many annual business plan templates you can use to make your plan. Generally, they contain these elements:

Stated goals (SMART)

Your yearly plan should include both SMART and stretch goals.

SMART (Specific, Measurable, Attainable, Relevant, Time-Bound) goals are an enduring staple of the business world, helping to clarify your ideas, focus your efforts, ensure your time and resources are used productively, and increase your chances of success. Stretch goals, as the name suggests, require above-and-beyond effort and innovation to pull off, with the promise of a greater payoff. Include a mixture of both in your annual plan.

Budget and financials

An annual plan also includes projections for the coming 12 months, forecasting income and outlays. Your projections will help you plan for cash flow dips, pinpoint financing needs, and decide the best timing for projects.

Part of this involves developing monthly financial projections by recording expected income based on sales forecasts and anticipated expenses for labor, supplies, overhead, and so on. It’s wise to prepare a projected income (profit and loss) statement and a balance sheet projection.

You can also use the projections to determine financing needs, if any. Well-prepared projections will make it easier to qualify for a loan.

Timelines and checkpoints

To reach where you want your business to be in a year, take your larger goals and split them up into smaller goals set on specific timelines. As you set your deadlines, include metrics that will indicate how successful you’ve been in achieving your goals.

Clearly outlined expectations and responsibilities

An annual business plan works best if it’s aspirational but achievable, with practical goals that are spelled out in clear language, indicating which individuals, teams, or departments are responsible for which parts of the plan. Given that almost 50% of employees in the United States don’t know what is expected of them at work, a little bit of clarity can go a long way.

Vision for what the business looks like at the end of the year

As much as annual business plans are about the practical implementation of a company’s strategy, it’s also important to keep the organization’s aspirational future vision in mind. Having a clear vision of what successful completion of your annual planning goals looks like increases your chances of success.

Contingency plans

What happens if your company’s cash flow gets into trouble? It’s a good idea to set up emergency financial reservoirs before they’re necessary. Maintaining a cash reserve or keeping room in a line of credit are both good contingency measures. Remember to compare your actual financial results to your projections throughout the year, so you can spot financial problems before they spiral out of control.

Creating an annual plan is easier when you use the right tools. These can include an annual business plan template that organizes planning efforts and a wide variety of software solutions for writing business and strategy plans.

As you execute your annual plan, it’s also a good idea to rely on a work management platform  with strategic planning tools that allow you to collaborate productively, create content, and manage complex processes. Using features like Workfront's Scenario Planner , you can simplify the annual planning process, adapt to market shifts with continuous planning, compare scenarios for risk and effectiveness, and stay ahead of the competition.

Armed with the right tools, plans, and processes, you can create a well-conceived and executed annual business plan that ensures the year ahead lives up to your expectations.

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Annual Planning: Plan Like a Pro In 5 Steps (+ Template)

annual business planning process

Get ready to take your strategic annual planning game to the next level! This process is essential for companies who want to set a clear direction for the future and ensure everyone is working towards the same goal. 

But, let's be real, executing a killer strategic plan is easier said than done. That's why we're here to help you. 

In this article, we'll dive into the nitty-gritty of annual planning and cover all the tips and tricks you need to know. From involving the right people to communicating your plan like a pro, we've got you covered. 

We'll also share some common pitfalls to watch out for and provide real-life examples to help bring it all to life. 

So, whether you're a seasoned planning pro or just starting out, get ready to learn how to make your annual strategic planning a total success!

In this article, you’ll discover:

What Is Annual Planning?

  • The Benefits of The Annual Planning Process

5 Steps To Build A Highly Effective Annual Plan

The only annual planning template you need in 2023.

  • 7 Mistakes to Avoid When Conducting Annual Strategic Planning

Build And Execute Your Annual Plan With Cascade 🚀

#1 Strategy Execution Platform Don't plan to fail.  Break down the complexity of your plans from high-level initiative to  executable outcome.   Learn how. Book a demo!

Annual planning is about turning long-term business goals into short-term action plans for the year ahead. It contains insights from past performance and a clear roadmap with a timeline. This yearly plan should be realistic and achievable, while also being ambitious enough to move the business forward.

Annual planning is your opportunity to take the previous year’s wins, knocks, and lessons and adjust your strategy to help your business grow consistently and become better.

Boilerplate definition aside, imagine if IBM still focused on building business-centric PCs, BMW still only made airplane engines, or Tata focused on producing steel. They wouldn’t be the companies they are today.

Annual planning and regular reviews help you proactively adapt to changes and steer your organization in the right direction to get the business results you want by the end of the year or toward your vision in the future.

The Benefits Of The Annual Planning Process

Whether it’s your IT, supply chain , pricing, marketing, operations , or sales strategy—improving, pivoting, or optimizing your annual planning approach from one year to the next year is non-negotiable. The annual planning process will help you assess the effectiveness of your business strategies and make adjustments to keep up with customer needs and market trends.

An effective annual planning process for the new year can offer:

  • Strategic clarity: Annual strategic planning helps define and align goals, mission, and values, leading to more focused and effective decision-making across all levels of the organization. This in turn sets a clear and consistent direction for future initiatives, maximizing the organization's potential to achieve success.
  • Focus: By regularly reviewing and updating its strategic plan , your organization stays focused on long-term objectives instead of being constantly sidetracked by day-to-day operations.
  • Benchmark performance: An annual strategic planning process helps you measure and track progress on key strategic initiatives , and evaluate the progress made compared to last year.
  • Gaps and opportunities: By regularly reviewing your strategic plan, your teams will identify gaps and opportunities for improvement and innovation, which can help you stay ahead of your competition.
  • Resource allocation: By aligning your strategic plan with your budget, you can allocate resources that will support your goals and cut costs from misaligned initiatives.
  • Engagement and buy-in: Involving key stakeholders in the strategic planning process will increase engagement and buy-in across your organization, leading to a more cohesive and motivated team.

A clear and execution-ready annual plan that focuses on the big picture and pays attention to the details can be the glue that binds your teams together. And this is crucial if you want to reach this year’s goals with greater speed and efficiency. Plus, it’s much better than the alternative of just winging it and hoping for the best!

📚 Recommended read: How To Create An Effective Annual Operating Plan (+Template)

Don’t get us wrong—creating and managing a yearly planning process can be a daunting task. But, with the right approach, you'll be able to get it right and start executing faster. Here's how to do annual planning the right way:

1. Analyze your performance and identify opportunities

Before you set goals , you should do an analysis of your company's current performance, market, and competitors to see where you stand. 

Here are some tools you can use in the process: 

  • SWOT analysis
  • PESTLE analysis
  • Porter’s Five Forces
  • Competitive analysis 
  • Financial performance of the previous year
  • Gap analysis  

A better understanding of your current performance can help you make data-driven decisions in the next steps of the planning process. 

Want to make it fail-proof? Don’t forget to include key stakeholders who will be involved in the day-to-day execution of your annual plan. 

Here’s who should be included in the analysis process: 

  • Executive leadership: They are responsible for setting the overall direction and strategy for the organization.
  • Department heads and team leaders: They can offer insights into team capabilities and resources. They can provide insight into the specific needs and challenges of their teams and ensure that their operational plans align with the annual plan.
  • Employees: Employees often have valuable insights and ideas that can help improve the plan. By involving them in the planning process, you can tap into this wealth of knowledge and potentially identify new opportunities or challenges that may not have been considered otherwise.
  • Customers: Customer feedback is critical to understanding the needs and priorities of the target market.
  • Suppliers and partners: Depending on the nature of the business, it may be beneficial to involve suppliers and partners in the strategic planning process. They can provide valuable insights into industry trends and potential challenges. 

👉Bonus tip: Don't let analysis paralysis slow you down! Set a timeline, prioritize data, make informed decisions, and don't overthink it. Move into the execution phase as fast as possible. Adapt later.

2. Formulate your strategy 

The data and insights from Step 1 should inform the formulation of your strategy for the coming year. At this point, you should have a clear sense of direction and objectives that your company wants to achieve in the coming year. 

💡 To identify and formulate your strategy, consider the following questions with your team:

  • What is the business problem that we are trying to solve?
  • What are our core strategic objectives , and how will we measure success?
  • What are our key strategic initiatives, and how will we prioritize them?
  • What are our key performance indicators , and how will we track progress?
  • Are there potential risks , and how will we mitigate them?
  • What resources will we need, and how do we allocate them?

Answering these questions will help you test the validity of your strategy and identify any potential gaps or risks that need to be addressed. In this way, you'll build a solid foundation for your annual plan and increase the chances of its successful execution.

3. Build your annual plan

Next, you’ll need to turn your strategy into a detailed roadmap that outlines the steps you’ll take to achieve your annual strategic objectives and goals. 

It’s like taking a map from a broad view of the journey to a more detailed look that zooms in on the roads and landmarks you’ll need to follow to reach your destination.

📝Your annual plan should include the following:

  • 🔎 Focus areas: The specific areas of the company or its operations that need improvement.
  • 📌Goals and objectives: Specific outcomes the company wants to achieve in its yearly plan. 
  • 📈Measures: Deliverables and KPIs to track progress toward your company’s goals and objectives.
  • 📤Actions: Specific actions or projects to achieve goals and objectives.
  • 😎Owners: Individuals or teams responsible for implementing the actions.
  • 📆Due dates: Specific deadlines and milestones throughout the year.
  • 💰Budget: Allocating the resources to achieve goals and objectives.

👉Here’s how Cascade can help you:  

Cascade’s strategic planning feature gives your annual planning process a standardized and structured approach that includes all the key elements for success. It helps you set high-level annual goals, break them down into smaller initiatives, and assign owners to drive accountability.

4. Create tight alignment with your teams

If the leadership team’s job is to set high-level company priorities to frame key strategic initiatives, then it’s up to specific business functions or teams to chart out the path to reach those strategic goals .

The first step in ensuring strategic alignment is to clearly communicate the plan to all employees. This can be done through regular meetings, company-wide presentations, and other forms of communication, such as a central location for your annual plan that is easily accessible to your stakeholders.

The key is to make sure that everyone understands the goals and objectives of the plan and how their work fits into the bigger picture.

With Cascade , you can link your annual strategic plan to individual departmental or team plans in a single source of truth. As a result, it's easier to ensure that everyone in the organization is aligned with the goals and objectives and monitor the progress being made toward those goals.

alignment cascade (1)

An example of the Cascade alignment view is where you can see how each plan aligns with the company's annual plan and drill down to evaluate performance.

5. Monitor progress and adjust your plan

Gone are the days of static, set-in-stone strategic plans! It's time to embrace flexibility and be willing to make changes as needed. Your annual plan is a flexible, dynamic roadmap that should be adjusted as circumstances change or new information becomes available. The key is to stay focused on your goals and objectives, and be ready to pivot when needed .

Here are some steps that you can take to monitor the annual plan and adapt as needed:

  • Set up a system for tracking progress: This can be done using a variety of tools, including spreadsheets, strategy reports , strategic planning software , or status reports . 
  • Establish regular review meetings: These meetings can be weekly, monthly, or quarterly, depending on the needs of your organization. The key is to make sure that progress is regularly reviewed and that any issues are identified and addressed in a timely manner.
  • Monitor key metrics: Track the most important KPIs that will help you quickly catch underperforming areas and evaluate the success of your annual plan and business strategies. 

If you want to be a savvy business leader, you need to always be monitoring progress, the business environment, and adjusting your plans accordingly. So, let's ditch the rigidity and embrace the flexibility of modern strategic planning and strategy execution! 

With Cascade’s powerful data visualization, you can connect multiple data sources from spreadsheets, project management tools, or business intelligence tools in a single place. You'll be able to uncover powerful insights and deliver accurate reports to help stakeholders make better decisions.

Plus, Cascade's drill-down capabilities allow you to easily explore and interact with your data to gain deeper insights in real time.

Ready for some serious annual planning made easy-peasy? We've got just the thing for you—our annual planning template ! This bad boy is like your own personal planning sidekick, packed with all the goodies you need to align your teams, monitor performance, and rock this year.

Think of it as a one-stop shop for all your annual planning needs. It’s pre-filled with examples that can guide you through the planning process, or you can customize it with your own information.

2023 strategy plan template

It’s a great alternative if you want to get out of messy and ineffective spreadsheets. Plus, it's got a super simple layout, so you won't be bogged down by a bunch of unnecessary features. This template can help, regardless of whether you work at a startup or an enterprise-sized company. And no matter the industry you’re in. 

Don't believe us? Give it a try! We guarantee it'll make your annual planning process a whole lot smoother and its execution a whole lot faster. So what are you waiting for? 

Sign up for a free forever plan with Cascade, add the annual planning template to your profile, and level up your game. It’s that simple. 

👉 Click here to get instant access to your annual planning template.

7 Mistakes To Avoid When Conducting Annual Strategic Planning

Alright, before you dive deep into your yearly planning session, let's talk about the elephant in the room: planning and execution mistakes . In this section, we're diving into some of the most common blunders made during the annual planning process, so you can dodge them like a boss. 

  • Lack of stakeholder engagement: Failing to involve critical stakeholders in the planning process can lead to a siloed plan that doesn’t align with the organization's capacities, needs, and priorities. 
  • Unrealistic goals: Be sure your planning is grounded in your situation's realities and consider your organization's resources, skills, and timelines. This is why it’s crucial that you consult with various stakeholders when planning and executing your strategy. If you need a goal-setting framework, you can check OKRs (Objectives and Key Results). Or take a look at these 5 best strategic planning models to help you set SMART goals. 
  • Lack of flexibility: View your plan as a flexible roadmap, not a rigid set of rules, and be prepared to adapt as the business environment changes. The “perfect plan” doesn’t exist. As 76% of corporate strategy leaders report significant pivots in strategic plans happening more frequently, you need to be ready to expect the unexpected. 
  • Lack of resources: An annual plan that doesn’t consider your team member’s knowledge and skill sets won't result in tangible outcomes. Additionally, ensure that your business has the necessary resources and that your annual plan won’t cause a cash flow crunch.
  • Inadequate communication: Clear and transparent communication is crucial for success, so communicate plans to all stakeholders and ensure they understand the goals and how they fit into the organization's overall strategy.
  • Lack of follow-through: Nobody wins if your teams aren’t hitting goals, and your strategy is just a document collecting dust. According to Cascade’s Strategy Report , less than 20% of team members review progress weekly. Set up regular progress reviews and take corrective actions as needed. Ignore this pitfall, and you’ll set your strategy up for failure.
  • Misalignment between business strategy and team goals: Strategy execution is a team sport, and everyone needs to be on the same page. Share annual business goals with your team leaders and their team members. Let them set their team goals independently, give them feedback, and ensure buy-in early on.

Ready to tackle your annual planning with confidence? 

Remember, the key to success is having a clear plan in a single source of truth, organization-wide alignment, and being flexible enough to adapt when necessary.

And as a final reminder, don't forget to check out our annual planning template! It's the perfect tool to help you structure your plan, get your teams aligned with your strategic priorities, and keep track of your progress so you can adapt quickly if needed. 

So don't miss out, book a demo with one of our strategy experts or sign up today for free , and let's get started!

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How to Create a Profitable Annual Business Plan [+Free Template]

Jody Sutter

Published: February 09, 2023

The beginning of a new quarter is the perfect time to start planning the next year for your business. Start the next year or quarter off on the right foot by creating an annual business plan for your company.

annual business planning process

Q4 often brings a flurry of business-related activity. And while all this activity helps fill the pipeline, it can distract you from reflecting on past performance and preparing for the year or quarter ahead.

Fortunately, you can write an annual business plan at any time of the year. Start your plan now to set your team up for success.

What is an annual business plan?

An annual business plan is just that — a plan for you and your employees to help achieve the company’s goals for the year. Think of an annual business plan as the guide to complete all of your company’s overall goals outlined in your initial business plan.

The first business plan you wrote for your business is the blueprint and the annual business plan is the detailed instructions to keep your business running long-term.

Usually, an annual business plan contains a short description of your company, a marketing analysis, and a sales/marketing plan.

Because an annual business plan is for the year, you’ll want to review your business at the end of four consecutive quarters and revise your plan for the next four quarters.

Why is annual business planning important?

Even though the fourth quarter might be a busy time of year, don’t put off creating an annual business plan.

Not only will your annual business plan keep you on track, it will also help you map out a strategy to keep your employees accountable. You can then more easily achieve the overall goals of your business.

Here are some reasons why it’s well worth creating an annual business plan for your company.

You can measure your success.

An annual business plan is the best way to measure your success. And I’m referring to the collective “you” here because it takes the entire company or all of your employees to make new business efforts effective.

An annual plan not only sets expectations for you but also for others within your company who need to contribute to the business’s success.

You can reflect on the past and plan ahead.

Creating an annual business plan allows you to reflect on the past 12 months.

As you reflect on the previous year, you’ll be able to get a good idea of what your business is capable of doing and set accurate, attainable projections based on previous numbers.

You’ll define your business goals.

Your annual business plan will shed some light on what the heck you do at your company. For those who are not routinely involved in new business, it can seem like a black hole of mystery.

Sharing your plan — whether to an executive committee, department heads, or even the entire staff — adds clarity and gives everyone something to aim for.

You can impress your boss.

If you head a department that could benefit from an annual business plan, don’t wait to be asked before you start writing. Get on your CEO’s schedule to review your outline and discuss your intentions for putting this plan together.

Sometimes the hardest part is getting started. You can get the ball rolling with the basic template that follows.

Annual Business Plan Template

Each section of your annual business plan will help tell the story of your company and clearly define your company’s goals for the year.

Let’s take a look at each section of the annual business plan template .

Executive Summary

Annual business plan template, executive summary

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Comprehensive 2024 Annual Planning Guide for Your 2024 Annual Plan

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2024 Annual Planning: Create a Strategic 2024 Annual Plan

Table of contents, appoint a skilled annual planning facilitator, prep work: getting ready for your annual planning session, review prep work and learnings from the year, work on long term strategy and 3-5 year strategic plan, determine common vision of what a great year looks like [destination postcard], create annual and quarterly action plans, do departmental planning; then communicate to entire firm [video], customize your annual planning agenda, annual planning process checklist, appoint annual planning professional facilitator.

If you are the CEO, it is almost impossible to participate and facilitate your own planning session at the same time. Your team is already used to deferring to your opinions. Couple the power of being the CEO with the power of being the facilitator, and your opportunity to listen, learn and get the best ideas from your team falls dramatically. Instead, pass the annual planning facilitation duties to someone else and immerse yourself in the meeting. Your ideas and contribution to the discussions will provide a much greater return compared to your facilitating the meeting.

When designating an annual planning facilitator, consider this: when executive team members facilitate your strategic annual planning meetings, it can cause participants to withhold agendas or thoughts, to resist challenging others, to not be challenged in their thinking, and to not be fully engaged. Using an outside facilitator allows all of the best ideas to be heard and allows executive team members, especially the CEO, to fully participate in designing the best plan. If you are a company with more than 50 employees and $10mm in revenue, we suggest you designate an expert facilitator or hire an outside facilitator to bring out the best in your team and you and get the best return on investment from your strategic planning session. This article that outlines the difficult and complicated annual planning process, don't worry though we are here to help if you need it.

Rhythm System Annual Planning Facilitation

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"Having a Rhythm Facilitator allowed me to be an active participant in our Annual Planning session. The decisions we made at that meeting helped us grow 140%, 3 years in a row.”

Dr. Steve Vogt, CEO, BioPlus Pharmacy 

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2024 Annual Planning Prep Work:

Preparing for your 2024 annual strategic planning session, here’s what the ceo should do to prepare well for the annual strategic planning session:.

  • This sounds elementary, but one of the main mistakes CEOs make is that they need to schedule annual planning dates with the team and communicate their importance. As a CEO, you must own this so others see how critical their full participation is to the company’s success.
  • Appoint a skilled facilitator. Great facilitators have critical skills to help set the agenda, manage difficult discussions, and drive the team to make decisions that result in a clear plan everyone is behind. Their expertise comes from practice leading dozens of sessions. You may have someone on your team that has these skills and experience, or you may decide to hire an outside facilitator.
  • Please be prepared to talk about the high-level strategy and specific goals that you want the company to accomplish to help set the tone for the meeting.
  • Make sure that you have all of the right members of your leadership team in the room with you to get a complete view of the departments in your organization.
  • Be careful to keep the number of people in the room to about 12, depending on the size of the organization.

Here’s what the effective Annual Planning Facilitator should do to prepare for the planning session:

  • Set up a meeting with the CEO to determine a strategy session meeting agenda.
  • Manage the logistics for the session - when, where, materials needed, food for lunch and dinner plans, etc.
  • Create, distribute, collect, and analyze the right prep work.
  • Modify the agenda based on prep work feedback. Confirm timing for all discussions.
  • Develop the PowerPoint slide deck for the session and any other tools or handouts needed.
  • Communicate key questions that need to be discussed or decided upon to all participants so they have time to think about it before the meeting.

Here’s what each participant should do to prepare for the 2023 plan review:

  • Share the agenda with each executive team member and ask them to read it and provide feedback on any other important discussions that need to occur.
  • Ask departmental/other leaders to come prepared with relevant information to help the team make informed decisions.
  • Complete prep work sent out by the facilitator, such as a Start, Stop, Keep exercise before the session.
  • Come to the strategic planning session with all the data required to support strategic annual planning discussions.
  • Are there any course corrections that are needed to get us back on track for our 3-5 year strategic plan?

Client Photo (2) (1)

“In the 16 years of AvidXchange, we have never missed a quarterly planning session. Many of our greatest inflection points of growth in the company came from those sessions. And our Rhythm Facilitators were critical in making that happen"

Michael praeger, ceo, avidxchange, 2024 annual planning process step 1:, how to write an annual plan.

Before you can really start planning for the future, you need to understand where you currently are. It is an integral step in the annual business planning process, as you need a clear understanding of where you are currently and where you want to be at the end of the annual plan. Everyone on the team will come into the planning session with their unique perception of how things are going and some ideas for improving and growing the business. It’s great to start the meeting by getting everyone talking and sharing the thoughts already on mind. Allowing time for a little introspection at the beginning of the planning session will immediately engage everyone on the team. It will establish some context for the strategic and future-directed conversations you will soon have. Here are a few ideas to get you started.

Learning from the previous year - Start the session by revisiting the plan you established for the year that is about to end (Targets, Theme, Key Initiatives), and then discuss the actual results. Ask the team: What did we accomplish this year? What improvements to the business did we make? What were our victories and bright spots? What did not go as planned? and most importantly, What lessons did we learn this year? This exercise aims to reflect over the past year, gather insight into what worked well and what didn’t, what you learned during the year, and what is different today than it was a year ago. A lot of work has been done over the past year, and it’s important to celebrate the progress you have made. All that you have accomplished and improved this year creates a foundation for planning that is stronger, smarter, and steps ahead of the foundation you were planning from last year.

Start, Stop, Continue Exercise - The Start, Stop, Continue exercise is great to send out ahead of time as homework for the team. This gets everyone thinking about the future of the business before they come into the planning session. It’s a great way to bridge the gap and ease people out of their day-to-day focus and into a planning mindset. In this exercise, participants are asked to share their top three answers in the following areas:

Start: New things to consider doing. What do you think you or your group should start doing that is not being done today? What things can we do to increase our growth rate?

Stop: What is ineffective that we must stop doing and save energy for other opportunities? These are items that can help us "dehassle" the business.

Keep: What is working well that we should continue? Look for bright spots - items that are working very well that we might want to replicate across the company.

Opportunities and Threats - Unlike the Strengths and Weaknesses part of the typical SWOT analysis, which is internal, Opportunities and Threats should be external conditions, forces, or trends that could impact your business. When considering Opportunities and Threats during Annual Planning, it is good to ask the team to consider the impact on your 3-5 5-year plan. What Opportunities are you aware of that could help you achieve your 3-5 year goals? What Threats are you aware of that could prevent you from achieving your 3-5 year goals? It is good to have the team brainstorm a good list of potential Opportunities and Threats, then have the team discuss, debate and agree on the top 3 Opportunities and the top 3 Threats.

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2024 annual planning process step 2:, work on strategic annual plan to connect to 3-5 year goals.

Annual Planning should include a good balance of strategic thinking and execution planning. This is your opportunity to prepare your team for a successful year and connect strategy to execution with your strategic initiatives. To plan for a successful year, you must have a good idea of the strategic direction you are moving in. Where do you want to be in the next 3-5 years and beyond? What are your strategic goals? What are the strategic priorities to help you achieve them? Because strategic thinking is a process, not an event, you must think ahead about how to use this time most effectively. If you have a fully developed long-term strategy, you could use this time to review your strategy with the team. If you have some pieces developed and some that need more work, you could spend this time focusing on just one strategic topic. Here are a few strategic decisions you should be working on. Consider where you are with each of these and customize this portion of the annual planning agenda to work on the areas most important to you at this time.

CORE VALUES

These are the handful of rules that will remain constant over time that you believe are key to the long-term success of your business. They already exist and are evident in the behavior of individuals that represent the very heart of the organization. Discovering, understanding and encouraging these core values will strengthen your company’s culture and will provide a good foundation for every individual in the company to make decisions on a daily basis.

CORE PURPOSE

Understanding and reinforcing your Core Purpose will provide inspiration for people on a daily basis. People need to be inspired. They need to understand how their daily work connects to a greater good that is being served through the success of the company. Your Core Purpose will answer the question “why?”

Your Big Hairy Audacious Goal (BHAG) creates a vision of future success for your company. It should paint a picture of what things might look like 10-20 years in the future when you have achieved this wildly ambitious, measurable goal. Your BHAG will also provide inspiration for your people and will create a framework for strategic decision-making.

BRAND PROMISE

Working on your Brand Promise will require you to identify and understand your core customer, your company’s core capabilities, and your unique position in the market. Having clarity around what is meaningful to your customers and what you will promise to deliver will provide direction on internal improvement initiatives, marketing messages and sales and delivery processes.

3-5 YEAR STRATEGIC PLAN

These are specific, revenue-generating growth strategies you will execute over the next 3-5 years that have the potential to 2X your business. You could use this time in your Annual Planning session to brainstorm and select new Winning Moves or evaluate progress and next steps on existing Winning Moves.

2024 Annual Planning Process Step 3:

How to prepare an annual plan with a vision.

Before you can start working on the specific details of your Annual Plan, you need to get the team aligned around a common vision of what a great year looks like. To do this, we recommend a team exercise called the Destination Postcard. This idea comes from Chip Heath and Dan Heath’s book: Switch (ch. 4, Point to the Destination). A Destination Postcard is a vivid picture of the near-term future that shows what could be possible. It asks the team to consider how the company will be different a year from now, how life at work may change, and how you will celebrate your success.

Don't let your annual plan fail, this will help you create your 4 quarter flyover so you can envision your path to success.

Destination Postcard Exercise

Ask each person to take a few minutes to quietly think about and write a descriptive narrative of what a successful year looks like to them. They can write a paragraph or use bullet points; whatever is most comfortable for them. It should not just be a list of KPIs or financial targets. Those may be included, but what you’re looking for should be more descriptive than that. Ask them to consider how the company will be different a year from now, how life at work may change, and how you will celebrate your success. Manufacturing companies can get a head start on their Key Performance Indicators by review our 25 KPI Examples For Manufacturing Companies.

Ask each person to consider what three things must have happened during the year that made it possible to achieve this vision. They should write down the three specific objectives that were accomplished.

Once everyone is finished writing, go around the room and ask each person to share their description of a great year and the Top 3 things the company accomplished. Capture the Top 3 things each person mentions on a flip chart. You can use checkmarks if more than one person mentions the same thing.

Leave the flip chart notes on the wall and refer back to them as you work to develop the details of your Annual Plan.

Destination Postcard

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2024 Annual Planning Process Step 4:

Annual process planning: create quarterly action plans.

Now that you have created the proper context confirmed your strategy, and envisioned a successful year together, you are ready to discuss the details of your execution plan for the next twelve months. You must consider and agree upon four components to the Annual Plan.

Targets - Set the measurable results you want to achieve this year. This should include Revenue and Profit targets and could also include other targets like Market Cap., Number of Employees, Number of Customers or Number of Locations. Choose a handful of targets that are strategic and meaningful to your company.

Theme/Main Focus - Next, agree on the main main thing the company must focus on this year. What barrier do you need to break? What Winning Move must pay off this year? Maybe this is the year to really focus on your company’s culture. It could be anything. The idea is to identify one overarching theme for the year that you are confident will drive your business forward. Creating this kind of a “rally cry” will help people remember those things you know are most important throughout the year.

3-5 Annual Initiatives - Now comes the hard work of prioritizing and choosing 3-5 specific Key Initiatives you will commit to completing this year. The right Key Initiatives will support your ability to achieve the Main Focus, hit your Targets, move forward on your Winning Moves, and execute your core business excellently. To identify your Key Initiatives, refer back to your work in the first three steps: Lessons from the Prior Year, Start, Stop, Keep ideas, Opportunities and Threats, Strategic Decisions, Winning Moves, and the Destination Postcard. Based on all of this, what are your Top 3-5 Key Initiatives for the company this year? In addition to identifying these Key Initiatives, you must assign an owner for each, determine the Red-Yellow-Green success criteria, and map out the sequence and timing of major milestones for each initiative.

Q1 90 day action plan - Now you are ready to get to work. Either as the last section of your Annual Planning Session or in a separate meeting, take the next step in your Plan Rhythm and create the execution plan for the first quarter. Just like the Annual Plan, the Quarterly Plan should include a Main Thing, 3-5 Top Priorities that can be achieved in a 90-day period, owners and Red-Yellow-Green success criteria for each Priority.

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2024 Annual Planning Process Step 5:

Annual business planning: departmental planning and communication.

Having a great Annual Plan created by the executive team at the company level is important, but the truth is that most of the actual work will not be done at the executive level. Most of the work will be done at the departmental level, and even then, only when it’s broken down into bite-size quarterly pieces for your cross-functional teams to execute. Once the company plan is finished, each department leader should meet with their team to share the vision for the year, explain how the plan supports the long-term strategy, and discuss the department’s role in supporting it.

The leader should also share the 3-5 Priorities the executive team has identified for the first quarter of the new year. Based on that, the department should consider what their year should look like and determine the 3-5 Priorities they will pursue in the first 90 days. Each of the department’s Quarterly Priorities will also need an owner and Red-Yellow-Green success criteria. And taking it one step further, each member of the team should also identify the 3-5 Individual Priorities they are personally committing to that will support the business unit's plan.

Once the departmental plans are finished, many companies will schedule a kick-off meeting (or series of meetings) for the whole company. This is a great way to bring people together, create positive energy and make sure the company plan has been communicated in an inspiring way to everyone. Remember, your plan is only as good as your ability to effectively communicate it to the people who will carry it out. The best time to break down departmental silos is in the planning process, have your discussions surrounding shared resources in the planning stages.

2024 Annual Planning

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It Is The CEO's Job To Get Annual Planning Right

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If you don’t have the time and talent to do Annual Planning right, you may want to consider contacting us to learn about Rhythm Systems Facilitators.

The purpose of your Annual Planning session is to align your team and everyone in the organization around a handful of priorities that, once completed, will move the company closer to achieving its 3-5 year targets, and, ultimately the 10-20 year visionary BHAG (Big Hairy Audacious Goal). Your Annual Plan will provide an inspired focus for your people and serve as the foundation of each of your Quarterly Plans.

You and your executive team should take five steps to ensure that your Winning Annual Plan will effectively connect your strategy to execution. There are many ways to structure an agenda that includes these steps, and the details of that agenda will vary based on where you are as a company, how much of your strategy has already been developed and the specific questions and opportunities you are faced with. The annual planning definition Rhythm Systems uses includes a clear plan to hit your targets.

Download our free 3 Steps to Ensure Your Meeting Will Be a Success to ensure that you are ready to lead an annual planning meeting or drop us a line to see if we can help.. Rhythm Systems has 13+ years of expertise in creating winning annual plans for mid-market growth companies and helps keep your team on track with our patented strategy execution software .

Learn how Rhythm Systems can help you create a winning annual plan with our professional annual planning facilitation services.

2024 Annual Plan

2024 annual planning, annual planning, annual planning facilitator checklist.

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How to create a successful annual business plan

Kaylyn McKenna

Here is what you need to know to create an effective and comprehensive annual plan for your department or company:

What is the purpose of annual planning?

An annual plan acts as a roadmap for your company. Annual planning allows you to go into a new fiscal or calendar year with specific and measurable goals set, budgets finalized, and a plan for how to measure progress on and achieve your company’s organizational and financial goals. Through this process, you develop the vision of where you hope that your company will be at the end of the year and the map of how you will get there.

You can also use annual planning to set goals and plans for individual departments or teams within an organization. Create marketing plans, human resource plans, and more to keep each segment of your business on track, reset your goals, and get your teams aligned towards common goals and initiatives. Since trends, consumer habits, and other factors change frequently, it’s good to create a fresh one-year plan each year.

Annual plans complement strategic planning while providing more short-term (one year) goals that are often tied to financial goals as well as the annual budget. Strategic plans often have more overarching goals that work to advance the company’s mission over three years or longer. Your annual plan will likely include goals that play into these longer-term goals in your company’s strategic plan.

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Evaluating existing and prior year goals

Start your process by evaluating your current starting point. Take time to look back at last year’s annual plan and evaluate whether you achieved your set goals or fell short in certain areas. Attempt to determine why you fell short on specific goals and what steps you could take to prevent a repeat of that issue. This will help you set realistic goals for the new year.

This is also a great time to review your company’s:

Mission statement. This is a statement that describes the purpose of your organization. What does your business do and what does it hope to accomplish?

Core values. These are the principles, beliefs, and values that your organization’s culture is built on. These values shape how you do business, and as such, should shape your annual plan.

Strategic plan. Your strategic plan should detail your business plan and long-term goals while taking market conditions into consideration. Your annual plan should complement your overall strategic plan.

Financial reports. Review the prior year’s budget reconciliation, cash flow statements, and year-end reporting. If you have access to budgets or financial forecasts for the upcoming year, review them now. If not, they’ll need to be created later in the annual planning process.

Keep all of these documents handy, as you may need to reference them as you move through the annual planning process.

Create an updated SWOT analysis

It’s also time to update or create a SWOT Analysis chart for your company. A SWOT analysis is typically depicted as a four-quadrant square with the following quadrants:

Strengths. List out the things that your company already does well and your internal strengths. Perhaps you have a large Instagram following with a strong network of influencers promoting your product. Maybe you have unique branding, patents, or technology that set you apart from competitors. This section is your highlight reel from prior years and can also include strengths like new products or developments being released in the new year.

Weaknesses. Now it’s time to consider what can be improved. List out your company’s internal areas of weakness. A good way to identify weaknesses is to look at customer feedback. Do customers like your product but complain about the processing and delivery times? A weakness can also be staffing-related such as high turnover or taking too long to fill open positions. A common marketing weakness may be lack of media mentions or ranking low in Google search results for your product or business type.

Opportunities. These are external opportunities that you can take advantage of in the coming year. Are there new trends or technologies that could boost the success of your business? Is it time to start marketing your products to Gen Z? Are there changes in government regulations or laws going into effect in 2022 that could have a positive impact on your business?

Threats. Explore potential external threats to your company’s growth and success in the coming year. Maybe the current supply chain problems mean that you will have manufacturing or delivery delays in 2022. There could also be legal changes that negatively impact your business. Threats could also come in the form of major competitors or market saturation. Knowing what may threaten your success will help you build a plan to overcome these challenges, so be thorough with your market analysis.

After creating a company-wide SWOT analysis, consider breaking things down even further and creating a SWOT analysis on specific aspects or segments of your business.

For example, a marketing SWOT chart can help you identify what you need to adjust in your marketing strategy for the new year. Many businesses, especially small businesses, may have strong Facebook and Instagram accounts but weaknesses in the area of SEO. Reaching new audiences and market segments through TikTok may be an opportunity if your business has not jumped onto the platform yet. A new year is a great time to do a SWOT and update your ideal customer or target demographics to evaluate opportunities for expansion.

Goal setting with SMART goals

It’s a good idea to start off the new year by setting goals for your employees, departments, and the company overall. This creates trackable metrics to measure your company’s success at each level throughout the year. The best way to create goals is to use the SMART goal system.

Specific. Aim to make your goals specific and to identify who will be involved in the goal. A general goal would be to increase brand awareness. Specific goals would be growing your LinkedIn following to 10,000, obtaining 10 media mentions, or ranking one the first page of Google results for a specific target keyword. Within each of those specific goals you could identify who is responsible for them; a social media manager, PR or media relations team member, an SEO consultant, or in a small business, it may just be a digital marketing manager. Regardless, it’s helpful to define who is involved and who will oversee progress.

Measurable. Define how you will measure the success of each goal. What metric will you use to track progress towards the goal?

Attainable. Your goals should be realistic. They can be somewhat ambitious, but avoid including stretch goals that are unlikely to be achieved within the year with your anticipated staffing levels, budget, and level of consumer awareness. Of course, start-ups would love to score a major investor or have their company go viral and generate a huge amount of buzz with consumers, but unless you have reason to believe either of those is on the horizon, leave out goals that depend on unrealistic or unpredictable events. Also, leave goals that will take several years for your strategic plan.

Relevant. The goals that you set for this year should be relevant to your company’s vision, mission, and long-term objectives. This is why it’s helpful to start the process by looking at your mission statement, vision, and strategic plan.

Time-bound. All goals should have a clearly defined time frame including a specific deadline date. For annual planning, the timeframe may be one year, or you can break your goals down into monthly or quarterly goals and adjust the deadlines as such.

You’ll likely end up with a decently long list of goals for your company. As mentioned in the Specific criteria, breaking down your goals and defining who is responsible for them is important. Try to create goals that span the major business functions of your company such as product, operations, marketing, HR, and leadership . Set company-wide goals and then break them down by teams and later by individual contributors to ensure that everyone knows what goals they need to accomplish in order to help the business meet its overall yearly goals.

Budgeting and financial considerations

An important aspect of annual planning is financial planning. A good business plan should take financial constraints, budgets, and financial goals into consideration and plan accordingly. If you are a start-up and plan to go through a round of fundraising or have other major changes such as going public with an IPO, include those in your annual planning.

Your annual plan should include financial projections for the year. These projections will help you plan for financing needs, changes in cash flow, and evaluate the best timing for new projects or hiring. You’ll want to create sales forecasts to project your expected income. It’s also wise to forecast your anticipated expenses for things like labor, materials. supplies, and overhead.

You’ll also want to verify that you will be able to allocate the funds needed to accomplish the SMART goals that you created earlier. At this point, you may need to revise some of your goals to ensure that they are achievable within your financial constraints. Those that require a larger budget may need to be scaled down or saved for next year.

Contingency planning

Hopefully everything will go as planned, but it’s always good to have a contingency plan in place in case something goes awry. After all, we’ve all seen how unexpected challenges can derail business operations over the past two years.

Plan for potential emergencies or alternate scenarios. Does your annual business plan rely on covid conditions improving in 2022? Create a contingency plan in case there are more hiccups than expected during reopening or the return to the office.

Consider how your business could best handle supply chain issues, unexpected cash flow problems, and major IT or security concerns. If your headquarters is in an area prone to natural disasters such as wildfires or hurricanes, you should always have a plan in place for the safety of your staff, files, as well as assets that would be difficult to replace.

Putting it all together

There are a number of annual business plan templates available online that you can use to craft your final report. Larger companies often use specialized software for their annual business plan. If you plan to use the goals created during the annual planning process for performance management , a software solution may be best so that department leads and individual employees can track their goals throughout the year.

The report should open with an executive summary, although this is actually the last piece that you’ll typically want to write. The executive summary should act as an introduction to and a summary of the full report. Tailor it to your audience depending on whether the plan will be shared with employees, investors, or others.

A description of the product or services including new products, the team, and the company at present may also be included.

Then comes the meat of the report where you explain the goals you’ve created and your plan for achieving and measuring them. Your full report may be separated into marketing planning, financial planning, HR planning for organizational improvement, and other relevant sub-sections. This is where the zoomed-in SWOT analyses and department-level SMART goals will come in handy.

The report should leave the reader with a clear picture of what you will achieve and how you will do it.

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Annual Business Planning: A Step-by-Step Guide

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As the year winds down, it’s a pivotal time for businesses to reflect, analyze, and plan for the year ahead. End-of-year annual business planning is more than a mundane task—it’s a stepping stone for future success. 

It’s about setting clear objectives, aligning your team, and ensuring your resources are well-allocated to meet the upcoming challenges and opportunities. Through a thoughtful planning process, you can set a solid foundation for growth, adaptability, and continued success. 

Read on as we delve into the essential steps and considerations to make your annual business planning both effective and strategic.

What Is Annual Planning? 

At its core, annual planning is like crafting a roadmap for the journey ahead—drawing from the experiences of the past. 

So, what should this roadmap include?

  • Destination Points: The goals you envision your team reaching.
  • The Route: The overarching strategy that guides the way to those goals.
  • Travel Itinerary: Specific tactics or steps your team will undertake.
  • Signposts: Essential milestones that mark your progress and keep you on track.

With this blueprint, the path to success becomes clearer, ensuring everyone knows the direction and the stops along the way.

When Should You Start Annual Planning?

There’s wisdom in the adage: “The early bird catches the worm.” Being that early bird in your annual planning process can set you miles ahead as you dive into a fresh fiscal year. A head start in Q4, as opposed to a frantic rush post-holidays, can be the game-changer. It’s akin to prepping for a marathon – would you rather start training months in advance or cram all your sessions into the final week?

Starting earlier boasts twofold advantages:

  • By stepping ahead of the curve, you sidestep the typical year-end frenzy, replacing last-minute scrambles with calculated strategy.
  • An efficient early planning session involving your leadership allows other teams to continue their momentum on critical Q4 projects without distraction.

The Power of the Annual Plan: Why Teams Need It

Early annual planning is essential for setting a clear path for your business. Having an annual plan helps in the following ways:

  • Alignment & Cohesion: A shared understanding of the broader vision and individual roles fosters unity, collaboration, and collective drive towards success.
  • Anticipate Challenges: By planning ahead, teams can identify potential obstacles and develop proactive solutions, rather than reacting hastily in the moment.
  • Milestone Tracking: With set benchmarks in the annual plan, teams have a clear roadmap to track progress, celebrate achievements, and stay motivated.

In essence, an annual plan isn’t just a document; it’s a commitment to vision, strategy, and teamwork.

5 Steps for Annual Business Planning

1. reflect on the previous year’s performance.

Evaluate how the past year measured up to the targets set. Analyze whether goals were met, and if not, understand why. If goals were easily achieved, consider raising the bar for the upcoming year. If they weren’t met, assess whether the goals were too ambitious or if the strategy needs to be adjusted.

2. Identify the goals you want to achieve in the upcoming year

Your annual plan should align with your broader strategic LRP (long range plan) vision for the next three to five years. Identify key focus areas for the upcoming year and turn them into actionable objectives. Use methods like OKR, KPIs, or SMART goals to clearly define these objectives.

3. Create an action plan to achieve goals

With the goals set, outline the steps necessary to achieve them. This action plan should detail tasks, deadlines, and responsibilities. Assign roles and ensure each team member understands the importance of their tasks within the bigger picture.

4. Communicate the annual plan to all team members

Share the annual plan with all team members, ensuring they understand and are aligned with the vision for the year. It’s not just about sharing information, but inspiring the team to work together towards the common goals.

5. Execute your strategy, monitor metrics, and adjust as needed

Execute the strategy, keep track of key metrics, and be ready to make adjustments as needed. Business conditions change, and being able to adapt the plan while keeping on track towards the goals is crucial for success.

What to include in an Annual Plan?

A good annual plan begins with setting clear, achievable objectives that are in alignment with the long-term vision of the business. The plan should then break down these objectives into actionable tasks with assigned responsibilities, like setting quarterly sales targets for each team. 

Clear, Measurable Goals

Defining specific, quantifiable objectives is crucial. For instance, instead of vaguely aiming to “increase sales,” set a clear target like “15% growth in sales, measured by TCV, compared to the previous year.”

Actionable Strategies

Detailing the path to achieve these goals is the next step. For achieving sales growth, strategies such as “upsell 20% of the North American customer base to upgrade 1-2 subscription levels” or “break into two new regional markets to expand the hardware product line” can be laid down.

Detailed Timeline

Having a definitive timeline with deadlines and checkpoints ensures timely progress. For example, set milestones like “market research by end of January; prototype testing by March; official launch in June.”

Allocation of Resources

Allocating necessary human, financial, and technological resources for each task is vital. An example could be “dedicating $50,000 from the marketing budget for the Q2 product launch, with the task assigned to the product marketing team.”

Risk Assessment

Identifying potential challenges and formulating contingency plans is wise. This can be assessed by looking at historical data, market projections, and regulatory or legal documentation.

Success Metrics

Determining the criteria for measuring the success of initiatives is crucial. For new product launches, monitoring metrics like monthly sales revenue, units sold, customer reviews, and return rates can provide valuable insights.

Stakeholder Communication

Deciding on the mode and frequency of updates to stakeholders keeps everyone informed and engaged. Standardizing the format of reporting and communications can simplify stakeholder reviews and streamline decision making.

Key Takeaways 

Reflecting on the past year and planning for the future is the only way to build on the success of the past. Your business success is largely driven by the efforts of annual planning, collaboration, and thoughtful strategy.

So, as you step into the planning phase, consider partnering with a digital agency to translate your business objectives into a well-structured, actionable, and successful annual plan. Your roadmap to success could be one consultation away! Contact us today !

Updated: Nov 02, 2023

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Annual Planning: Why Is It So Important?

On a personal level, planning is an essential aspect of everyday life. And when it comes to companies, whether small or large, planning is equally essential. Annual planning is one of the most important activities that companies do every year because it provides an opportunity to set the overall direction of a company by discussing goals, metrics, budget, and performance.  

annual business planning process

What Is Annual Planning?

Annual planning can be defined as the process of defining a business roadmap for your company and your employees. It can also be seen as an organization's financial plan for the year, and it is comprised of a series of milestones that help to carry the plan forward through several tasks that lead to a broader vision of where the company aims to be by the end of the year. 

Companies must hold planning sessions to review last year’s performance, as well as specific goals and achievements. These sessions will help to analyze expectations and results from the previous year in order to create an annual plan that gives everyone in the organization a sense of where they’re headed, and where they want to be twelve months from now. 

Is Annual Planning the Same as Strategic Planning?

Strategic planning is about establishing goals to sustain the company’s vision. Is about creating a strategy where the end product is a long-term plan that includes identifying goals, as well as mapping out how exactly those goals will be met. The process of strategic planning involves choosing a methodology, assessing resources, and receiving feedback from both external and internal stakeholders. A strategic plan can also be implemented during the course of years, and not necessarily within one business year. 

To put it simply, the strategic plan will identify the framework for a company to advance on its mission. The annual plan can include goals directly related to the strategic plan but it is largely connected to the budgetary approval process for the next business year, and as such, annual planning is usually conducted by leadership or directors. 

Why Is Annual Planning Important?

A well-formulated annual plan is an opportunity to set the overall direction for your company. It can also help to empower the team by providing a sense of direction. Let’s take a look at the most relevant benefits of annual planning:

  • Annual planning generates efficiency because it circles around performance.
  • It helps to define what is critical to achieving over the year.
  • It delivers clear leadership to employees and it helps to keep the workforce united.
  • Employees gain a clear sense of direction in their departments and roles. 
  • An annual plan can rally an entire organization around goals. It can also provide a stronger connection to the company’s strategic plan.

What Is Included in an Annual Plan?

Generally, an annual plan will contain the following elements:

Goals. Before you can look forward it’s important to look back. For this, it’s a great idea to review your SMART (Specific, Measurable, Attainable, Relevant, Time-Bound) goals, they can help to clarify ideas, focus efforts and ensure resources are being used in the most productive manner. Remember, your annual plan should also hold a strong connection to your company’s strategic goals.

Budget. Financial elements are key to annual planning, so it’s important to take into consideration projections for the upcoming 12 months. These projections will help you plan resources, cash flow, and decide the best course of action and timing for individual projects. 

Expectations, responsibilities, and clear OKRs. Goals need to be clearly specified, indicating which teams, individuals, or departments will be responsible for carrying out tasks. Expectations must be exceptionally clear for collaborators. Also, working with well-defined OKRs can help to keep teams on track because they help to provide visibility into what other teams and individuals are working on. It’s all about maintaining the workforce motivated and crystal clear regarding who’s in charge of what. 

Timelines. When measuring performance it’s important to understand how successful your company has been in terms of achieving goals within their deadlines. Split your goals into tasks and set deadlines. 

Contingency plans. A well-formulated annual plan will also consider emergencies. It’s always a good idea to think of alternate scenarios, such as what would happen if suddenly your cash flow would become compromised? 

Values and mission. It’s also instrumental to keep your company’s aspirational future vision in mind when working on your annual plan. 

Annual Planning: 

When it comes to managing annual plans and strategic plans , you need to be on top of everything. A strong annual planning strategy can help to build a company’s broader strategic vision and to set the overall direction of a business roadmap for the next 12 months. However, as you may already know, this process entails keeping track of critical information. This can be an exhausting and difficult process, but it gets easier when you use the right tools. 

Project management software can be a powerful ally for project managers. Instagantt , for instance, allows you to keep information centralized. You can quickly store, update, share, access, and review important company-related information , all in one single place. With gantt charts , you can keep track of your budget and streamline your business plan, making sure you and your team stay on track. Moreover, you can use the same tool to keep track of your strategic and your annual plans, which will help to increase transparency across the organization, keeping track of the key results you’re trying to achieve, and visualizing progress and performance at all times. With the right tools and processes, you can create and execute a strong annual strategy.

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The Ultimate Guide to Creating a Strategic Annual Plan

November 19, 2021 - 10 min read

Maria Waida

The first step to achieving goals is to come up with an annual plan. A strategic annual plan makes it easier for managers, team leaders, and company owners to execute their vision for growth. Not only does creating an annual plan give you time to reflect on past accomplishments, but it’s also a great way to make ideas actionable. Keep reading to learn more about what annual planning is and how you can create one that has a significant impact on your organization. 

What is an annual plan?

An annual business plan is a set of goals and milestones that guide a company's operations for the year ahead. It helps guide employees and investors in the right direction. For many people, this year's new year begins with a review of their previous year. They then set goals and make plans for the coming year.

Annual planning is a combination of two other important elements: a business plan and an annual plan. 

A business plan is a document that a company or organization uses to set goals and improve performance. It's similar to a belt-tightening exercise.

An annual plan is a strategy that a company uses to set goals and expectations for the coming year . It helps employees visualize where they are headed and how they can get there. The annual plan also sets out a company's long-term goals and helps guide how it will reach these targets.

An annual business plan helps workers set goals and holds them accountable for achieving those goals for the upcoming 12 months.

Then, there’s strategic planning. A strategic planning process helps an organization identify its mission, vision, and strategic goals.

The strategic plan combined with the annual business plan are two key components of a successful strategy. The former provides a framework for the company's goals and intentions, while the latter provides the necessary tools and processes to execute those goals.

Overview of a strategic annual plan

Here is what is typically included in a strategic annual plan: 

  • Analysis of past performance. Reviewing your goals can help you identify areas where you can improve and become more productive.
  • Budget estimations. Financial projections are often included in budget planning. They help you plan for the coming year and identify the right course of action for your projects.
  • A clear vision statement. Expectations must be clearly stated, as well as responsibilities and clear OKRs. Having these elements in place can help keep teams on track and motivated.
  • SMART goals . Set specific, measurable goals and deadlines for your company. This will help you measure how far you've come in terms of meeting the key results.
  • Buffer room. A well-written annual plan should include space for emergencies as well. Having a contingency plan can help avoid unexpected expenses.

In a nutshell: the annual plan is a strategy used to plan and execute the organization's goals and objectives. It is usually composed of three phases which are strategy, projects, and timing.

The importance of an annual plan

Annual planning helps define what's important to achieving goals and driving performance. An annual plan also helps keep the workforce united and can be used to motivate and retain employees.

A well-written annual plan can help you set the direction for your company while providing the team with a sense of direction.

Examples of annual strategic planning

Here are some ideas to get you started with your own strategic annual plan: 

1. Coca Cola HBC 2020 Integrated Annual Plan  

Coca-Cola's 246-page report details all aspects of their business. They start by celebrating their wins with statistics. They also include photos of actual customers and partners. Their CEO writes a letter to their stakeholders sharing their biggest accomplishments over the past year. 

Then they go through their vision. Throughout the strategy, you can see that they are using the pillar method for goal planning. Key areas of focus include leveraging existing business, continuing to win the beverage marketplace, making competitive investments, focusing on employee growth, and expanding their licensing.

The overall report is designed well and is reminiscent of a well-crafted white paper. Because the CEO's letter was addressed specifically to stakeholders, we know that this is a tool for increasing investment as well as project planning. Because of this, a lot of the content within it answers the question, “why should I invest in you?”

Throughout the rest of the annual plan, each pillar gets its own section. At the top of each section, there is a list of accomplishments from the past year and priorities for the coming year. They also summarize risks, stakeholders, and KPIs. This makes the packet easy to skim but also easy to remember.

2. pep+ (PepsiCo Positive)

PepsiCo recently announced that their new 2022 initiative will revolve around “the planet and people.” While this is a long-term process for the brand, the launch will mark the core of their strategic annual plan for the foreseeable future. Their keywords include positivity (hence the “+”), sustainability, and “a fundamental transformation of what we do and how we do it.” 

On their dedicated landing page, readers can dig deeper into their annual plan. Also well designed, this presentation shows what the future looks like for PepsiCo through refreshed branding and imagery. Symbols such as smiling farmers and healthy, green fields drive the message home. 

To achieve these new goals, the company will focus on supply chains, inspiring consumers, and driving sustainable change among all its product lines. 

They link several documents throughout the report, including a comprehensive list of goals which is a great example for your own annual plan template inspiration. This three-page chart names pillars on the left-hand side and targets or actions with due dates on the right. 

If their goals have numerical metrics, they include data from past years, along with key benchmarks they hope to reach by the end of the year or in the future. Otherwise, their goals are measured in actions. 

For example, as part of their sustainability pillar, they plan to “develop and deploy disruptive sustainable packaging materials and new models for convenient foods and beverages.” This task is specific and clear, despite the fact that it’s not as quantifiable as some of their other goals. 

3. Nestlé Global’s Annual Report 

Their annual plan is not public but they have shared an annual report on past wins from 2020. In addition to a financial review, Nestlé also shares a new strategy. Starting with important facts and figures the company highlights statistics from organic sales growth and more. They also visualize data about which types of products are selling most and where in the world the company has grown over the past year.

As Coca-Cola did, Nestlé also includes a letter to shareholders. They discuss ways in which they plan to grow in the coming year. This includes what product areas they will invest more in and where they will pause or halt efforts. They also emphasize a new product area which will be the focus moving forward in the short term. In this section, Nestlé touches on long-term strategies and how these short-term goals will affect them. 

In general, their annual report focuses on the word innovation. It mostly has to do with developing new products and revamping old ones. Like PepsiCo, they are using sustainability as a pillar as well as e-commerce.

The report goes on to elaborate on each strategy individually. Nestlé lists action steps and provides clear evidence as to why each is important. They also highlight statistics for growth in key areas and name even bigger numbers for where they hope to be in a year. 

Throughout the report, they include images from ad campaigns that demonstrate the change they wish to continue implementing as part of their marketing plan . Again, branding imagery makes a big difference when creating your own strategic annual plan. It sets the tone for what's written on the page and can help visual learners better understand what you're going for at a glance. 

Although Nestle's strategic annual plan is designed more like a white paper than a chart, this layout is the most magazine-like by far. It serves as a great example of how you can organize ideas on the page in a way that is interesting and attention-grabbing.

One of the most notable aspects of their annual plan is the Materiality Matrix. They use this chart to visualize key areas of interest and prioritize them according to stakeholder values. Within each box, they’ve listed bullet points of business areas this value will impact. It’s a great method for summarizing goals that cover a wide variety of departments and business engagements. 

Understanding strategic planning best practices

Everyone has their own way of thinking about annual plans. Regardless of what you’re trying to achieve, the following strategic planning best practices will help you get there: 

1. Use SMART goals

A variety of SMART goals are commonly used to help guide and motivate people. They help set realistic benchmarks and are designed to help teams achieve success. It will also help you plan for the ups and downs of your business. To reach your goals, divide them up into smaller goals and set specific deadlines. These goals will help you measure how successful you are at reaching them.

2. Include contingencies

For example, having an emergency financial reservoir is a good idea to prevent a potential financial disaster. It can help your company navigate slower seasons while still sticking to your annual plan. 

3. Build in flexibility 

Even minor shifts in external factors can significantly impact on how effective you are at creating and implementing your strategic plan. Never forget that, while we are creating our annual plans in a vacuum, the world will undoubtedly go through more changes this coming year. Even though we can’t predict the future, we can make our plans foolproof by being flexible now. 

What is an annual plan template?

An annual plan template is a document or tool that can be utilized repeatedly to outline the various stages involved in creating an annual plan.

Its purpose is to provide a clear understanding of the annual planning process by specifying the actions to be taken and the timeline to follow in order to develop an effective business plan. By utilizing the annual planning template, individuals or organizations can ensure that they have a systematic approach to reaching specific goals, and can enhance the quality of their business plans.

Using Wrike to assist with an annual plan template

Wrike’s project management software can help you keep track of all your company-related information in one place. It can also streamline your work and help you stay on track. It can also help you keep track of your annual plans and develop a strong strategy.

Start by using last year as a reference. By understanding the issues that affected the previous year, a company can improve its performance in the following year.

Draw reports of time spent per project and see where your team went over or underestimated. Then look at which tasks tend to drain resources the most. Determine whether or not the ROI is worth it moving forward. 

Next, set realistic goals. Reflect on last year's statistics from Wrike Reports and put together a plan with a realistic metric for improvement. 

After, break down big plans into individual steps. Start by focusing on the business goals of the company then outline your key objectives that align with those. Make sure that everyone knows who is responsible for executing and approving each task. 

Draft a Gantt chart that includes each step broken down into relevant tasks. Remember to add deadlines to every action to keep teammates accountable and keep to realistic deadlines.

Then, delegate tasks according to strengths and weaknesses. Use project reporting and individual job performance to assess team members. You may find that those with specialized talent are being tasked with unskilled work when they could help solve major problems elsewhere. 

Don’t forget to involve the whole team. Start early, plan ahead, and keep everyone involved in the process. Doing so will make it easier to overcome obstacles once the projects are underway. 

Additionally, ask them for direct feedback on your ideas for the next year. You will learn from the front line what obstacles they may be facing that will affect the timeline. 

Another bonus of getting your team involved is that it creates more transparency in the workplace. Using Wrike as a part of the process is not only helpful, but the team also keeps learning how to use the system more efficiently as they go. 

Having a work management platform that enables you to plan and execute annual plans is a good idea. Plus, it's also a good idea to use tools that allow you to collaborate and manage complex processes. Create an effective annual plan today with Wrike’s free trial . 

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Maria Waida

Maria is a freelance content writer who specializes in blogging and other marketing materials for enterprise software businesses.

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Annual planning is essential to develop a clear strategy and ensure your company, departments, and individual teams are on the same page. But even though it happens every year, annual planning can feel chaotic—with many different stakeholders, deadlines, and decisions that need to be made. 

An annual planning template streamlines the yearly planning process, so you can focus on developing great strategy—not on juggling different planning tasks. 

[Product UI] Company goals and milestones project example (Lists)

What is annual planning?

What is an annual planning template .

An annual planning template is a reusable guide that lays out each step in the annual planning process. It helps clarify planning by outlining exactly what you should do—and when you should do it—to craft a successful business plan. For example, your template could include a timeline for strategy sessions, submitting budget and headcount requests, finalizing department objectives, and more.

A great annual planning template also includes space to document company, department, and team goals—so your organization’s North Star is top of mind throughout the annual planning process. With a standardized action plan and visibility into high-level objectives, you can ensure your organization is aligned from the bottom up. 

The benefits of a digital annual planning template

Annual planning often happens at the top of an organization and isn’t effectively communicated to everyone. According to our research , only 16% of knowledge workers say their company is effective at setting and communicating company goals, and only 26% of workers have a clear understanding of how their individual work contributes toward those company goals. 

A digital annual planning template closes this communication gap by setting and tracking yearly goals where work happens. Instead of gathering dust in a spreadsheet, your team and company goals live right next to the work that needs to be done to achieve them. That way, annual planning isn’t just something that happens at the executive level. Instead, it’s an exercise that helps everyone—from the CEO to the summer intern—set measurable goals for their work that align with other teams and your company objectives. 

By consolidating your annual planning process in a work management platform, you can: 

Standardize your strategic planning process across departments and teams.

Create a single system of record for the annual planning process, so everyone is on the same page. 

Ensure company priorities are top of mind when departments and teams set their own annual goals for the new year.

Map out a concrete timeline for your annual planning process.

Assign tasks with specific due dates, so it’s clear who’s responsible for what, by when.

Toggle between project views to visualize your annual business plan in different ways—as a standard list, Gantt chart , calendar, or Kanban board .

How to create an annual planning template

Annual planning looks different at every company. To create your own custom-built template, first ask yourself the following questions: 

Who will be involved in the annual planning process? 

What are the major decisions you need to make, and steps you need to take? 

Who will be making those decisions? 

What is the order in which those decisions need to be made? 

Then, use those questions to fill in a rough timeline. As you map out the annual planning process, use these best practices to build out your template: 

Organize tasks with sections. Keep annual planning steps organized by bucketing them into different sections—like company planning, department planning, and headcount requests. 

Create custom tags to visualize key stages. Annual planning often happens in stages—like pre-planning and strategizing, goal-setting, then allocating resources to achieve those goals. Color-coded custom tags help visualize where each task falls within each annual planning stage.

Indicate which team is responsible for each task. During annual planning, it’s important to know who’s responsible for each step in the process. Label each task with its respective team—like company planning, finance, and HR. 

Include your team and company-wide goals. For annual planning to work, you need constant visibility into high-level company objectives. Include space in your template to set and track business, department, and team goals so you can make sure each level of the organization is aligned. 

Tracking goals in your annual planning template is a great way for individual teams to stay organized, but you can level up your goal-setting process with Asana’s Goals feature . Goals is an organization-wide tool that helps your entire business set, track, and communicate about goals.

Integrated features

Timeline View . Timeline View is a Gantt-style project view that displays all of your tasks in a horizontal bar chart. Not only can you see each task’s start and end date, but you can also see dependencies between tasks. With Timeline View, you can easily track how the pieces of your plan fit together. Plus, when you can see all of your work in one place, it’s easy to identify and address dependency conflicts before they start, so you can hit all of your goals on schedule. 

Custom fields . Custom fields are the best way to tag, sort, and filter work. Create unique custom fields for any information you need to track—from priority and status to email or phone number. Use custom fields to sort and schedule your to-dos so you know what to work on first. Plus, share custom fields across tasks and projects to ensure consistency across your organization. 

Milestones . Milestones represent important project checkpoints. By setting milestones throughout your project, you can let your team members and project stakeholders know how you’re pacing towards your goal. Use milestones as a chance to celebrate the little wins on the path towards the big project goal. 

Start dates . Sometimes you don’t just need to track when a to-do is due—you also need to know when you should start working on it. Start times and dates give your team members a clear sense of how long each task should take to complete. Use start dates to set, track, and manage work to align your team's objectives and prevent dependencies from falling through the cracks. 

Zoom . Asana and Zoom are partnering up to help teams have more purposeful and focused meetings. The Zoom + Asana integration makes it easy to prepare for meetings, hold actionable conversations, and access information once the call is over. Meetings begin in Asana, where shared meeting agendas provide visibility and context about what will be discussed. During the meeting, team members can quickly create tasks within Zoom, so details and action items don’t get lost. And once the meeting is over, the Zoom + Asana integration pulls meeting transcripts and recordings into Asana, so all collaborators and stakeholders can review the meeting as needed.

Vimeo . Text may get the point across, but written words lack tone, emotion, and expression. With video messaging in Asana, powered by Vimeo, you can give your team all the context they need, without having to schedule another meeting. Record short video messages of yourself, your screen—or both—then embed the videos in tasks, projects, messages, and comments to provide additional clarity and context. A transcript of the recording is automatically created by Asana, making it readable and searchable. Give feedback, ask questions, and assign tasks—all without leaving Asana.

Microsoft Teams . With the Microsoft Teams + Asana integration, you can search for and share the information you need without leaving Teams. Easily connect your Teams conversations to actionable items in Asana. Plus, create, assign, and view tasks during a Teams Meeting without needing to switch to your browser.

Google Workplace . Attach files directly to tasks in Asana with the Google Workplace file chooser, which is built into the Asana task pane. Easily attach any My Drive file with just a few clicks.

How should I set goals during the annual planning process?

There are a variety of goal-setting methodologies you can use, including objectives and key results (OKRs) and SMART goals —objectives that are specific, measurable, achievable, realistic, and time-bound. Regardless of the method you choose, make sure you identify key success metrics to track and measure results. That way, you can determine if your business strategy is working—or if you need to do something different. 

It’s also a good idea to evaluate your performance from the previous year when setting business goals. How you did last year is a great benchmark to determine what’s realistic for you to achieve with your new yearly plan.

What types of teams can benefit from this annual planning template?

If you participate in annual planning, this template can help—regardless of whether you work at a small business, startup, or enterprise-sized company. Every department and team should participate in annual planning, and using a template helps standardize the process across your whole company.

When should I use my annual planning template?

The earlier, the better. Start using your annual planning template as soon as your company kicks off the yearly planning process. This often happens in the third quarter, about four months before the start of the new fiscal year. 

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The Business Planning Process: 6 Steps To Creating a New Plan

The Business Planning Process 6 Steps to Create a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

Finish Your Business Plan Today!

The best business planning process is to use our business plan template to streamline the creation of your plan: Download Growthink’s Ultimate Business Plan Template and finish your business plan & financial model in hours.

The Better Business Planning Process

The business plan process includes 6 steps as follows:

  • Do Your Research
  • Calculate Your Financial Forecast
  • Draft Your Plan
  • Revise & Proofread
  • Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

  • What are your business goals?
  • What is the current state of your business?
  • What are the current industry trends?
  • What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your business plan today.

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink business plan consultants can create your business plan for you.

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A 5-Step Guide to Annual Planning for Your Business

With any luck, you were able to take some time off around the holidays to relax and recharge for the New Year. With time to reflect and decompress, you should be entering your next year of business with a fresh set of eyes and new found energy. Make the most out of this feeling by channeling your energy into annual business planning and give your business the direction and momentum it needs to have its best year yet.

Your business plan doesn’t have to be overly complex, but it does need to be organized and give you the framework to map out your next year of business. When we talk to our customers, we find that many business owners find the following five steps to be helpful and easy to navigate for their planning.

Review and Assess

  • Pull reports that give you a clear picture of your revenue year over year and month over month. Try to spot trends that help you identify activities you tried that worked well for your business, or things that didn’t. Next, take a look at your closest competitor. While you won’t be able to know what their books look like, you can get a feel for their revenue growth by looking at their marketing efforts, facility upgrades, etc.
  • Going through a traditional SWOT analysis is a great way to get a high-level view of your business over the last year that can help you spot obvious next steps and lessons for your annual business planning.

Define Your Purpose: Who are we here for?

  • By identifying your most valuable customers you will learn two things. Firstly, you’ll learn what ‘kind’ of customer is the best fit for your business, which will help you determine your target market and a focus for marketing to similar people that are not yet customers. Secondly, you’ll be able to learn more about your best customers and determine the best way to retain them and brand new customers.
  • Look at this group of “best customers” and determine what they’re buying and when they’re buying. This information will help you create a strategy for how to serve them better with more products or services that meet their needs. This is also a good time to think of different ways to reinforce your relationship with your customers by providing value through helpful information, coupons, or just a nice email message.
  • Think about your most valuable customers, why do you think they are choosing you over your competitor? If you’re not sure, it might be helpful to provide an easy way for your customers to provide feedback into what they like and don’t like about your business, so that you can continue to build on your strengths and learn from your weaknesses.

Outline High-Level Goals

  • To succeed, everyone within your organization needs to understand the underlying mission of your business—for the next year and for the long-term. Starting from the top (you) and down, take an honest look at the priorities each person carries: Do those priorities align with the business’ goals? Is that person working on the most impactful priorities, given their unique set of skills and expertise?
  • What does your business want to be when it grows up? With that clear picture in your mind start to think about the messaging and the offerings of the company you aim to be and weave that into your current activities to start building momentum behind the direction you want to move.

Make a Plan

  • Keep it short and keep it simple. Start with your goals for the upcoming year, figure out what activities need to happen to get to those goals, assign and delegate as a team, making sure everyone understands their priorities and accountability and give your team the autonomy and tools to succeed.
  • When your employees understand and believe in the business’ mission, they will feel a sense of purpose. When they understand how that mission can be achieved, they will feel a sense of direction and focus. Talk to your employees, have candid conversations and take that feedback into consideration in your annual business planning and as you think about the long-term vision of your organization.

Measure Success

  • Your annual plan is the road map for you and your employees for the next year. That road map needs milestones (deadlines, success metrics) that carry your plan forward through a series of smaller goals that lead into your larger goal of where you want your business to end up by the end of the year.
  • While your plan should provide structure, it should also be pliable. Revisit your plan often and make changes when needed. You are the boss of your plan so own it and let it be the tool that helps you feel ‘in control’ and helps drive the success of your business.

Going through the process of creating an annual plan is something that every business owner can benefit from, regardless of the size of the business. If you are a business of one, share your plan with a mentor or someone you respect in your network for feedback. If you are business of many employees, get feedback from your team to create an informed plan that everyone can buy into and get behind.

Recommended Reading

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Small Business Guide: What is Inflation and What You Can Do About It

What Small Business Owners Can Do When Inflation is High

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8 keys to create an effective annual plan for 2024

annual business planning process

Published on November 29, 2023

annual business planning process

Annual planning season seems to arrive earlier each year. It can take months to do the analysis, brainstorming, and forecasting required. Plus you need precious time with the board, executives, managers and team leaders.

For some, it starts at the end of Q3. Yet you still struggle to deliver it in time for Q1.

That’s normal - perhaps inevitable - an annual plan is a mammoth achievement after all. But it doesn’t mean you can’t make improvements and do better this time around.

This article gives a brief intro to annual planning, the nuances of planning, strategy, and budgets, and then eight key ways to make your planning process a success .

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What is an annual plan?

Your annual operating plan details the human and financial resources, initiatives, and actions that will help you achieve your goals for the coming year. It should include the specific goals for the next year, and the key activities to reach them .

While it shouldn’t list out every individual’s contribution, teams and team members should be able to see where they fit into the plan.

Among other features, the plan should include :

Goals for the coming year

Strategic priorities to achieve these

Tactics to put the strategy in action

Checkpoints or milestones to measure success against

And ideally in relatively few words. With a detailed glance, the reader should know what the company is going to do next year.

Annual plan vs strategic plan

Strategic and annual plans are related, but not the same thing. The simplest way to explain a strategic plan is to think of your “big bets” - the core objectives to ensure you reach your business goals. You likely only have a few: a new product line, expansion into new markets, or a fundamental change in your business model.

And the strategic plan will likely last three or even five years - far beyond a single year. Annual plans - by definition - do not.

Your annual plan is therefore the actions and initiatives for the coming year which will help you achieve the broader strategy.

Annual plan vs budget

These two tools also go hand in hand, but aren’t exactly the same. An operating budget is the financial justification or rationale for your annual business plan. Because if you can’t justify or afford the resources required to complete your action plan, that plan is doomed to fail.

Whether you create one before the other or attempt both in unison is up to you. But you’ll almost certainly have to revise each when you see the other.

If you can’t fit your plan within the budget, your plan needs to change. If your budget doesn’t reflect the clear company priorities for the next year, it too needs rethinking.

Annual plan must-haves

Your annual operating plan will take whatever form works best for you. But to be successful, you’ll need to include the following:

Executive summary or overview to tell the story behind your plan

Goals or objectives

Clear KPIs or OKRs to measure progress

Actions and initiatives, mapped out in a timetable for the year

Resource requirements - backed up by the budget

A process for review and reporting on progress

Perhaps the hardest part is telling that coherent story at the top, and managing to reflect it throughout.

This is crucial to getting buy in, and helps the plan really land with stakeholders.

8 keys to an effective annual planning process

As we said above, it’ll never be perfect. And it’ll always be hard work. But these things should help to create a more effective annual plan.

1. Close the previous year as quickly as possible

There’s an inconvenient truth when building your annual roadmap: past performance should inform future plans, but most companies hope to create their new plan before the end of the year. Which means the annual close hasn’t finished, and you likely don’t know your true landing position.

Of course, by the end of Q3 you can typically tell how the past year has been. You know your major wins and failures, and have a general sense of direction for the year to come.

But the quicker you can close the books and have “final” numbers for the year (or even the previous three quarters), the more confident you can be in your data .

For this, you need likely need the right combination of clear communication, efficient processes, and finance automation .

Whether you can actually close the books before you plan is always debatable. But you need as much accurate, reliable data as possible to successfully do the next key step.

Further reading: Your guide to diagnosing and curing a broken close process

2. Take stock of your current position

“Budget is one of those things where you’re constantly iterating,” says Stripe’s Head of Global Finance & Strategy, Saoirse Fahey . “We’re learning and iterating our approach, fine tuning it every year. Every year we do a debrief and find what we could have done better on the back of budgeting .”

Next year’s plan will always be informed by this year’s performance.

In particular, try to assess current performance against the goals you set this time last year.

Were those goals helpful? Did the process of setting them make sense?

Did they propel the company to its current position, or have you landed here in spite of them?

What needs to change to get you to the next milestone(s)?

It’s very rare that everything went to plan all year. Your next steps are always directly informed by what went well, where you fell short, and how closely you actually followed the plan in the first place.

3. Select the key objectives

There’s always room for argument, but ideally not with the absolute core of the plan. You should at least be able to agree on the strategic big bets for your business next year . How each team contributes and the smaller actions come next.

As Talend’s Sherilyn Kamga explains , “once we all agree on the pain points and the value of removing them, bandwidth and workload are simply challenges to overcome. Which might mean outsourcing much of the work or finding other resources within the company.“

So how can you (pretty much) achieve consensus? You have two real options: top-down decisions from leadership, or clear data that make your new year objectives obvious . Most companies tend to prioritise the latter.

Sherilyn continues, “in the past, you prioritized people with experience and insights, and they had the biggest impact on your strategy. But now that companies have a way to gather data more easily, the strategy doesn’t only rely on the executives’ vision and experience. If company data is readily available, it can be used to put together the appropriate strategy.“

For Aiven SVP of Operations & Strategy Katariina Korhonen , “everything starts from understanding the vision and strategy of the company. In a fast-growing company, there's always something to do. But being able to focus on the things that move the needle is crucial when you're leading yourself and leading teams. So understanding the big picture of where the company is going helps a lot.”

4. Set smart goals

Whether you read that as “smart” or “SMART” is up to you. In too many cases, strategic goals are so lofty or high level that they don’t impact people’s day-to-day work.

Whatever framework you use, there are five important factors for goals:

Time - By when?

Quantity - How many?

Quality - How well?

Cost - How much?

% Change - From what to what?

A goal should tell you what, by when , but not how . The how comes next, when you start identifying actions to achieve these. Your key results should be clear and trackable to everyone affected by them .

Most crucially, you need to know how you’ll measure success. At Aiven, Katariina says “our KPI framework is key here. We have company-level KPIs, function-level KPIs that we’re monitoring actively, and we also put KPIs on investments. Monitoring only financial performance is not enough, it has to be complemented with operational metrics that are connected to our investment areas.”

Specific goals will ultimately be set by department leads and their teams. Here’s where your clear overarching objectives give them something to orient towards, even if the specific actions can be very team specific and specialised.

5. Choose clear actions to achieve those goals

This is of course the action part of your action plan. You’ve set smart goals and now need to select the initiatives to help achieve these. At the company level, this won’t reach down to individual deliverables.

Actions at the company level might include:

Significantly increase pricing or alter your business model

Launch a major new product

Sunset legacy client accounts

Offshore certain activities

Each of these should play directly into the key objectives above: reducing costs , increasing revenue, growing the top line efficiently, or similar.

Next, teams and individual contributors will build their own plans cascading down from the operating plan you set out here. These don’t need to be included in the annual plan (especially for larger companies).

But your annual plan needs to show teams exactly where they stand. What is required from them, and how do they contribute?

Reminder : Planning and goal setting needs to be actionable; it needs to modify behaviour and encourage people to act in a certain way. If your annual strategic plan simply lands you where you would have landed anyway, then why waste the energy in creating it?

6. Set your reforecasting schedule

Even with an ace annual plan and a great strategic planning process, things can change incredibly quickly. You need contingency plans in place for when the original plan no longer works.

For most modern businesses, this involves reforecasting. Whatever assumptions you had about your cash flow, client base, and the world at large may no longer be valid - even quarter to quarter.

Saoirse says standard practice at Stripe is to reforecast once a quarter . She was at Microsoft during the 2008 economic crash, and there it was once a week. Every six months is probably appropriate and sufficient for most businesses, although it of course depends on the organization and how quickly things are changing.

Some companies even opt for rolling forecasts as an alternative to yearly budgets. Maria Hedengren from Eight Roads explains, “of course you need to keep track of where you’re going to land the quarter or year, but there’s a danger of losing sight of what happens after. You need to be proactive because something big is coming up. I think the sooner you can implement the rolling, the better. It doesn’t have to be super detailed, just a high-level view.”

Whether you choose an annual budget or rolling forecast is a key choice for your finance team. Either way, how you create and share your plan with other teams is also vital.

7. Work closely with stakeholders

Whether companies should use top-down or bottom-up budgeting and planning is a rich debate. In truth, it’s almost always a mix of the two. And the measure of a high-performance finance function is in how your advice and strategy is adopted by the wider business.

Daniel Yubi, CEO of Payable, gives the example of finance and product teams. Each has its own

“For this proposition to succeed, your product team needs to understand its economic viability and expected uptake and, likewise, your finance team will need to understand how to manage underwriting, financial operations and repayments. Knowing the nuances of this revenue opportunity is essential for both teams to effectively plan, model and predict the financial impact on their business’ bottom line.”

Aligning on your forecast and plan is critical, and almost always hard to achieve. According to Mika Kasumov of Abacus & Pencil , that’s because everyone sees the forecast differently:

Account Executive: "This is my plan on how to hit my quota."

FP&A: "This is the arithmetical output of assumptions I got from others."

SalesOps: "This is what we think will actually happen if key ratios hold steady from the last Q."

Various VP: "This is my haircut on other people's assumptions and ability to execute."

CRO: "This is what I'm comfortable signing up for and asking for investment behind."

CEO: "This is what I want to rally people behind - to exceed."

Your finance team really needs to embed with key stakeholders. This helps you both understand their challenges and needs better, but also ensures that they’re using the business plan as intended.

8. Communicate clearly with the wider business

The final, essential step in annual planning is adoption . How can you be sure that the whole company understands and is motivated by your plan?

There’s really no magic spell here. Even where the plan is built bottom-up, it’s the leadership team who must evangelise and energise the company around it. And for the finance team, obviously, that’s the CFO or Finance Director. Today, the CFO role is arguably more about communication and leadership skills than your command of Excel.

Gainsight CFO Alka Tandan made a conscious shift during the current economic downturn. “I became much more vocal and increased my communication. I started CFO office hours for the company where people could come and ask me questions. I started a finance newsletter for the company. I started doing a lot more education about what happens in a turbulent economic climate because I realised many of our employees had only seen the good times.”

That’s evergreen advice, but applies directly toy our annual plan. Teams will have questions, particularly where their resources are impacted. You need to anticipate and pre-empt these questions where possible, and give the context necessary for everyone to make sense of the plan .

Most importantly, keep the long-term strategy in mind. A one-year plan can be controversial or hard to swallow for some. But if it’s clearly tied to the company’s mission and vision - if people can see how their work will pay off in time - it’s far easier to keep the team rowing in the same direction.

Get your annual plan in place

As we’ve seen, annual planning is never as easy as we’d like. But it’s a valuable and frankly table-stakes part of running your business.

For finance teams, success here boils down to:

Access to clean, accurate data as early as possible

Firm agreement on the company’s biggest needs and next steps

A close working relationship and good processes with other teams

Clear, concise communication with the wider business

If you can achieve those, annual planning becomes the worthwhile exercise it ought to be.

Start right away with that first point: getting your data warehouse in order. And in particular, ensure you have good AP/AR systems and a clear overview of cash in and out of the business .

If you have to wait weeks to know your true cash position, you’ll be forever behind the ball.

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Annual Business Planning: Start Now to Prepare for 2024

September 18, 2023

annual business planning

Annual business planning is a critical success factor in achieving long-term financial goals. Crafting a yearly business plan involves reviewing your past performances and identifying solid strategies for the new year.

Assembling your business plan on your own can be challenging. Many businesses turn to accounting firms to support developing their annual business plans. These experts can help you analyze your data and the overall business climate, helping you make better business decisions grounded in reality.

But you don’t want to wait too long to start – January 2024 is already too late!

annual business planning

Benefits of Annual Business Planning

An annual business plan can take multiple forms. It often clearly outlines the company’s goals and objectives and works backward to determine all necessary activities. A well-developed and structured annual business plan brings several key benefits.

Provides a Roadmap for Achieving Business Goals

Annual business planning clearly outlines activities for each team member to undertake while working towards achieving their business goals. Although you can deviate from your plan as the year progresses, your actions should work to bring you to those goals.

Helps Businesses Adapt to Changing Market Conditions and Economic Factors

Part of the drafting process of the annual business plan involves weighing the external environment. That includes market trends, competition, and economic conditions to identify potential changes that impact the business.

Enables Businesses to Make Informed Financial Decisions

The first step in writing an annual business plan is setting challenging – yet attainable – goals and objectives for the upcoming year. These benchmarks lead to informed decision-making for the business.

Essential Elements of Annual Business Planning

As 2024 creeps closer, your business plan has a few central parts to consider.

Review of the Previous Year’s Performance

How did you perform the previous year? What’s your current trajectory? The last year’s performance and goals make great starting points for the coming year’s targets. 

Identification of Key Performance Indicators (KPIs)

What’s essential in your business? Often, a few key metrics can summarize your progress toward your objectives. These KPIs focus your team’s attention on the right things. 

Setting Realistic Financial Goals

A sustainable business sets challenging yet achievable financial goals. Assess your current financial position and use that to specify what you hope to achieve during the financial year. Need to improve profit margins? Create a plan to cut costs or raise prices.

Development of a Detailed Budget

A detailed budget clearly outlines the available resources, significant expenses, and the path to achieving your financial goals and objectives. 

Creation of a Marketing, Sales, and Advertising Plan

A marketing, sales, and advertising plan defines what you need to do to promote your business to your target audience. Market research and competitor analysis can help you identify (and close) gaps in the market.

Factors to Consider When Annual Business Planning for 2024

A business plan can help you be ready for anything, and multiple factors come into play when planning for the upcoming year. Below are a few of the top considerations.

Anticipated Changes in Technology

2023 taught us that technology trends continue to shape the market. For example, the proliferation of AI technology has massive ramifications for businesses. Your planning process should note any changes on the horizon.

Expected Shifts in Consumer Behavior

Consumer behaviors are constantly shifting. Keeping up with the latest developments can help you take advantage of opportunities as they come and not always be running after the market. 

Changes in the Regulatory Environment

New rules, standards, and regulations constantly evolve the regulatory environment. Anticipating these regulatory changes can ensure your business’s sustainability and compliance.

Potential Impact of Economic Factors

No matter how good your plan is, ignoring the general economic landscape can throw a major wrench in your operations. Inflation, changes in consumer trends, and market volatility play a role in your company’s long-term sustainability. 

The Role of Accounting Firms in Annual Business Planning

Managing your own financial planning, forecasting, and budgeting can be challenging. Of course, you and your team must be invested in the process, but there’s no need to go it alone. An expert accounting firm can help you set and achieve goals. 

The planning process involves decisions about finances and budgets based on assumed future expenses, revenues, and cash flows. An accounting firm can help you sort through historical data, market trends, and analysis before making final decisions about your goals and objectives. 

Accounting professionals can offer advice and guidance on your business plan’s accounting and tax implications . Moreover, these professionals can help you develop tax-efficient strategies and ensure compliance with tax regulations. 

Finally, accounting professionals have insight into many companies. They can help you analyze historical data and performance metrics to set a baseline for realistic and achievable business goals. 

Tips for Successful Annual Business Planning

Expert assistance can make your annual business planning run smoothly and be more realistic. Let’s take a look at a few tips from the experts.

Keep the Plan Concise and Focused

Avoid getting too fancy with your annual business plans. Complexity can be challenging to communicate, implement, and track. A solid annual business plan with streamlined goals and objectives is concise and focused.      

Involve Team Members in the Planning Process

An excellent annual business plan gets buy-in from all stakeholders by involving them in the decision-making process. 

Continuously Monitor Progress and Adapt as Needed

Monitoring progress against your targets and KPIs helps you take rapid action before the situation becomes critical. Quick responses help ensure minor problems stay small.   

Seek Guidance from Trusted Partners, such as Accounting Firms

Sometimes, professional help makes having a stellar year more achievable. They can help you focus on essential topics and avoid wasting time on activities that don’t bring your business forward.

annual business planning

Get a Jump Start on Your 2024 Annual Business Planning

An annual business planning exercise is a prerequisite for achieving long-term goals and objectives. 

But don’t wait too long. Now is the time to start planning for 2024. Involving an accounting firm in this planning process helps set achievable goals and monitor progress.

At Founder’s, we understand the nuances in the annual business planning process and have a proven track record of helping businesses achieve their goals and objectives. Let us take your business to the next level. Contact Founders today to start planning for 2024.

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Annual Business Planning Checklist

Annual business planning is one of the most important things that a business owner or CEO must do. It sets the strategy, the goals and determines the tactics for the following year.

Of course, there is a lot to consider in terms of where your business has been and where you are headed. It’s important to be organized and stay focused because how you plan often sets the tone for your business. Here are 7 key steps for an efficient planning process.

What Is an Annual Business Plan?

An annual business plan outlines a company’s goals, objectives, and strategies for the upcoming year. It includes detailed information on sales projections, marketing plans, and resource allocation.

The annual business planning process ensures that a company is well-prepared to meet its upcoming goals and objectives, as it provides a structured approach to setting priorities, identifying potential risks and opportunities, and developing actionable strategies for success.

The annual business plan serves as a blueprint for the company’s operations and is regularly reviewed and updated throughout the year to ensure that it remains aligned with the company’s goals and objectives.

Ultimately, the annual business planning process helps companies achieve long-term growth and success in an efficient, organized manner.

1. REVIEW YOUR MISSION AND VISION STATEMENTS.

Are both still applicable? Are they in sync? Are you still passionate about both? It’s a good time to review them, if you aren’t already doing so regularly. Make sure both still provide the overarching reasons that your business exists.

If either one of these has changed, consider them seriously and update as necessary (ensuring appropriate buy-in from you team). Ensure that you feel 100% about your mission and vision before you begin anything else.

2. DETERMINE THE REVENUE GOAL.

Your top-line revenue goal should be high-level and where you see the business going for the year. It’s also strategic. For example, consider the market, the current state of the business and your personal goals. Do you believe that you should grow your revenue by 5%, 15% or even 50%? Or do you believe that revenues will be flat given the current market conditions and/or your desire to focus on profitability over growth.

All are reasonable decisions, but each one will dictate different planning decisions. For instance, how many people do you need to hire, what infrastructure investments need to be made, and how scalable are your support systems? You can start to visualize this plan at a very high level by creating an expected and ideal business model.

Now it’s time to start to thinking through if the ideal business model is attainable next year or if next year should be an interim step towards this future goal.

3. REVIEW AND UPDATE YOUR ORGANIZATIONAL CHART.

First, review your current organizational chart, identifying current and future gaps and needs. Make notes of new positions needed to attain your revenue projections or other organization needs. Make any updates to the roles and responsibilities for current positions.

It’s possible to have employees with more than one role. But, consider if it would be beneficial for more than one person to cover those responsibilities. Move people and roles around as needed until you come to a structure that feels right. At this point, you should have a sense of the number of people you will need to execute on your plan (note for many businesses this will likely only be necessary to the department head level).

4. BUDGETING AND FINANCIAL PLANNING.

This is where your Excel skills (or maybe someone the Excel skills of someone you trust) come into play. The goal is to put all this information into numbers. Build in your key assumptions to generate the revenue you are planning. Add in the expenses needed to support this. Look at your current YTD numbers and go through it line-by-line.

Think about hiring and how much people are going to cost. Look at things from both a top down and bottoms up standpoint. Ask yourself if your top-line goal is reasonable based on initial calculations. See if your bottom-line is also reasonable and where adjustments need to be made. Go back and forth. Ideally, your budget guru will be able to model this through your balance sheet and cash flow forecast, in addition to the income statement, to ensure that cash needs are being considered.

5. CREATE A SALES PLAN AND QUOTAS.

Once you have established you plan and budget, there is typically one final check. Is the plan reasonable from a sales standpoint? Are bookings goals and quotas reasonable based on people and territory? What does your pipeline need to be? How about your close ratio? How does that compare to this year? The sales plan and quota assessment are the final pieces for most companies before you can feel that the overall plan is realistic.

6. GET MANAGEMENT TEAM BUY IN.

Once your executive team has bought into your plan for the coming year (we’re assuming they have been a part of the steps above), make sure you share it with your key managers. Allow the opportunity for questions and tweaks. Generally, though, it’s not productive to allow discussions and changes on everything. Listen, assess their feedback, and tweak as necessary. Then it is time to share with all employees.

This is a chance to get everyone excited about the next year and ensure that you are all moving in the right direction. Your business should function as a team where everyone does their job to the best of their ability. With the right plan and the right team in place, you have a much greater chance of reaching the goals you’ve set for the business.

7. CREATE DEPARTMENTAL KEY PERFORMANCE INDICATORS (KPIS).

It’s time to figure out what you’re going to hold each department in your business accountable for. KPIs start at the top with the executives and then are established for each department. If it makes sense for your business, your department heads can establish KPIs with those who report to them as well. Generally, there should be 3-5 KPIs per department.

These KPIs are not necessarily financial either. But they should be SMART (Specific, Measurable, Attainable, Realistic and Timely). For example, your Human Resources KPI might be your employee retention is greater than 85%. Most importantly, this is not a to-do list of every project for the department in the coming year. Your KPIs are the key things that you think will allow the business to succeed in the coming year.

A few other reminders specifically for calendar year end planning:

  • Think personal tax planning. Planning tactics will differ based on each individual tax situation, business entity type, state of residence, etc., but there are few general tactics to remember including: Consider funding retirement accounts, ensuring all flex spending plans have been fully utilized, making any state /local tax payments in December, ensuring federal tax payments are made by January 15th, accelerating expenses or deferring revenue.
  • If your company is funding your personal tax payments, ensure that there is cash on hand to fund these distributions and you make these with time to meet the estimated tax deadlines.
  • Consider and plan for year-end bonuses for key employees.
  • Prepare to issue 1099s in January. The filing requirement is quick so ensuring you have everything on file and compiled is important.
  • Remember to forecast and monitor cash flow closely during the few months around year end. Typically, there are some seasonal spikes and dips at this time for many companies. And often new expenses are incurred during the beginning of the year. Plan for and monitor this extra closely via a detailed 13-week cash flow forecast.

What Is Included in an Annual Business Plan?

An annual business plan typically includes a range of information that helps guide the company’s operations and ensure its success. The business plan checklist generally includes details such as market analysis, sales projections, marketing plans, product development plans, financial projections, and risk assessment.

The business annual planning process may also  include a review of the previous year’s performance, an analysis of the competition, and customer feedback. The annual business planning process provides a framework for success by helping companies prioritize their goals and identify opportunities for growth.

Why Annual Business Planning Is Important

Annual business planning is important for businesses because it provides a structured approach to setting priorities and developing sales forecasting. If you’re wondering why is sales forecasting important , it is a critical aspect of setting realistic goals and objectives.

By considering historical sales data, market trends, and customer behavior, businesses can develop comprehensive sales projections. Annual business planning enables companies to review and update their strategies in response to evolving market conditions.

Best Practices for Annual Business Planning

Annual business planning is a critical process for businesses looking to increase profitability . It’s important to set realistic and measurable goals that align with your overall business strategy so that you can track your progress over time.

When establishing your annual business plan, you should conduct a thorough analysis of market trends. You’ll likely need to review and update your annual business plan over time to ensure that your strategies are as effective as possible. As time progresses, monitor key metrics such as revenue, profit margin, and customer acquisition cost and adjust your plans accordingly.

How TGG Can Help

Our financial experts at TGG are committed to helping business thrive and realize their greatest potential. We are here to help you establish an annual business plan that aligns with your company’s ultimate goals.

The TGG team proudly serves businesses by establishing an initial annual business plan and by assisting clients with modifying the plan as market conditions change. Get in touch with our accounting experts today to bring your financial planning to the next level with a comprehensive annual business plan.

This post was reviewed by our team of accounting and financial experts . TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.

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Glenn Smith Executive Coaching

Annual Business Plan: 7 Key Processes

Your annual business growth plan is critical to the consistent, healthy growth of your business. I hope you will overcome the barriers and go into the new year with a solid growth plan.

I have already identified the 3 Parts of an Annual Business Growth Plan . They are Your Marketing Plan (with a particular focus on your Marketing Calendar), Your Budget (or Financial Plan), and Your Organizational Improvement Plan. Here I want to look more closely at Your Organizational Improvement Plan.

There are 7 key business processes that should be evaluated every year. These 7 key processes are

  • Operations and Customer fulfillment
  • Customer Service
  • Admin/Back Office

Big Picture SWOT Analysis

I recommend that you create a high level S.W.O.T. chart to analyze where you are right now. Create a 4 quadrant grid, one for each of your S.W.O.T. topics. Here is what I mean by S.W.O.T.:

  • Strengths – These are your current or past year’s internal areas of strength.
  • Weaknesses – These are your current or past year’s internal areas of weakness that need to be improved.
  • Opportunities – These are external possibilities that you see for the coming year.
  • Threats – These are potential external threats to your growth and success in the coming year.

Once you create your grid, write each of the seven key processes in one or more boxes. This will give you a high-level analysis of your entire business. So my high-level S.W.O.T. chart looks something like this right now:

annual business planning process

Bring it Down to the Key Processes

Once you complete this high-level S.W.O.T. analysis, take it down to each of the seven key processes. Create a S.W.O.T. chart for each of the seven areas starting with Leadership. You may want to include your staff for feedback and brainstorming. For Leadership, consider the following:

  • Leadership – vision clarity, communication of direction, overall business strategy, clearly defined goals, and good accountability structures.

So my Leadership S.W.O.T. chart looks something like this right now:

SWOT Leadership Analysis_Annual Business Plan 7 Key Processes

Now do the same with the other key processes. You can break them down this way, but feel free to add components to each of these:

  • Management – effective systems, documented systems, process improvement systems, comprehensive operations manual , efficient dashboards
  • Marketing – effective referral strategy , building a strong brand, direct response advertising/tactics, relationship management, PR strategies, leveraging the internet, leveraging social media
  • Selling – documented sales process, strong scripts and selling questions , plan for handling objections, making it easy for customers to buy, closing effectiveness, training.
  • Operations/Customer Fulfillment – documented processes, efficiency , quality control, safety, expense control
  • Customer Service – relationship management, quick response, building loyalty, reviews & testimonials , customer satisfaction
  • Admin/Back Office – accounting, reporting, finances, data management, inventory control, technology, infrastructure, technology

Set Some Goals

Once you analyze the seven key processes, set some goals for the coming year. You may want to set 2 or 3 goals for each area or 5-7 overall goals. However, you approach this, be sure to write specific, measurable goal statements and share them with your team. If possible, assign a “Champion” to each goal.

After you write your goals, determine the specific steps you will need to take to achieve each goal. Assign a deadline for each action step and assign a person responsible for each step. Once you finished, you have completed your Organizational Improvement Plan.

Be sure to review all 3 of the annual plan components , Your Marketing Plan, Your Budget, and Your Organizational Improvement Plan, to make sure they are all in alignment. Plan a time to review this once a week or once a month. Now, take action and watch your business grow!

Glenn Smith

Glenn Smith

Glenn Smith is a sought-after Executive Coach with over two decades of experience. Recognized for his strategic insights and leadership training, Glenn has been a guiding force for more than a hundred successful small to mid-sized businesses. Merging data-driven strategies with profound insights into human behavior, he aids business owners and executives in realizing their fullest potential. A respected thought leader, Glenn has contributed to numerous business publications and is a popular keynote speaker. Outside his professional realm, Glenn cherishes family time and outdoor activities. He is a pilot with over 30 years of flight experience. He is also a professionally trained gunsmith and a firearms instructor. His dedication to fostering leadership and driving transformative change marks him as a premier figure in executive coaching.

LinkedIn : www.linkedin.com/in/houstonbusinesscoach/

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  13. Free Annual Planning Template: Streamline Strategies [2023] • Asana

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  23. Annual Business Plan: 7 Key Processes

    Now do the same with the other key processes. You can break them down this way, but feel free to add components to each of these: Management - effective systems, documented systems, process improvement systems, comprehensive operations manual, efficient dashboards. Marketing - effective referral strategy, building a strong brand, direct ...