No one could have predicted the events that unfolded in 2020. COVID-19 and the subsequent economic crisis challenged entrepreneurs in unimaginable ways. And as COVID-19 continues to impact companies everywhere, there are still questions and unforeseen challenges ahead. Despite this, savvy business leaders know future planning is a key component in ongoing success.
While the pandemic has introduced new obstacles, there are ways to take lessons learned in 2020 and incorporate them into a strategic business plan for 2021. With this in mind, this article will outline five steps you can use to start planning for the new year.
Step 1: Look at your Vision & Long-term Goals
The first step in any strategic plan involves looking at the long-term vision and goals for your business. By taking the time to analyze your vision, you allow yourself to step back and identify how your business needs to shift over time to hit your goals versus looking for short-term solutions.
It’s important to remember where you’re heading and why. Your vision should act as your north star. When you’re setting goals, they should be in pursuit of that end destination. Although things may have shifted over the last few months, your vision is still your vision. The timeline may have extended, but you should still be working toward the same end goal.
If you don’t already have a clear vision or feel yours is outdated, it might be time to take another look.
Step 2: Set your annual macro goals
What do you need to accomplish in 2021 to achieve your vision?
Identify 3-4 overarching goals for your business. Do you want to launch a new product or service? Do you want to recruit 20 new people? Write down 3-4 things you need to accomplish next year to help you achieve your long-term vision.
When setting your goals, remember to choose SMART goals (i.e., Specific, Measurable, Achievable, Realistic, and Timely) that are measurable and easy to track. For example, a goal to “Increase sales by 10% in the next two months” is easier to measure than “increase revenue.” Here you maybe would like to consider financial advising to increase your profit.
Step 3: Identify the KPI’s you’ll use to track the success
When finalizing the macro goals, you will want to identify the Key Performance Indicators (KPIs) you will use to track the success of your goals. Metrics are an excellent way to measure progress over time and understand what is working and why.
Step 4: Prioritize those initiatives
Once you have 3-4 big rock items, and you know how you plan to measure their success, brainstorm 5-6 strategic initiatives you can use to achieve those goals. Once you’ve identified 5-6 for each goal, you need to prioritize. Consider your resources and prioritize each initiative accordingly. Remember, over a year, the best teams will accomplish four initiatives per goal; depending on the size of your team, you might be able to accomplish more, but as a rule of thumb, four initiatives per goal is an excellent place to start.
Step 5: Build your strategy to implement each initiative
Now that you have your goals and objectives, and you know what you are working towards (your vision), it’s time to identify the strategy and plan on how you will implement these initiatives. It’s best to break it down to a weekly schedule that you can revisit throughout the year to ensure you stay on track.
Here is an example of how you can break down your goals to hit a yearly revenue goal. For argument’s sake, let’s say you have a 3-year vision of hitting $10M in revenue; how much do you need to make in 2021 to be on track for that goal?
2021 –$5 M
2022 – $ 7.5 M
2023 – $10 M
Once you have those numbers, let’s break it down further. What do you need to make next year to make it happen? What do you need to get there on there on a monthly, weekly, and daily basis?
The most common metrics to break down are leads for marketing, sales transactions, and conversions, as well as people and resources needed to achieve your revenue goal.
Here is an example:
2020- $ 5,000,000 M
average sale size – $2000
Year – 2,500 transactions (average sale size/revenue goal)
Month – 209 transactions (Number of sales needed/12 months)
Week – 48 transactions (average sale size/52 weeks)
Day – 10 transactions (Number of sales needed a week/5 days)
This micro breakdown is where the magic starts to happen as you realize what will break or what needs to shift in the business to get to that level.
Once you get down to the day, you can choose to take it a step further by determining how many calls or meetings each person on your sales team needs, then how many prospects they need to schedule a meeting, and so on. Once you have this framework, you can start seeing how your tactics will come into play.
Developing a plan for your business is a necessary way to break your goals into digestible, achievable actions to keep your business on track. Apply this framework to your company and see how much simpler your big audacious goals feel.
If you’re not sure where to start, you don’t have to go at it alone. Schedule a free two-hour session with Cultivate Advisors to dig into your business to uncover bottlenecks and develop a roadmap based on where you are in your business and where you would like to be. With this roadmap, you’ll have a tangible plan you can implement to reach your long-term goals.