Get explosive growth in 2024 by taking the time to build a strategic plan now
In the fast-paced business world, success belongs to those who plan ahead. As we stand on the cusp of 2024, it’s time to delve into the strategies that will shape your business in the coming year.
At any stage of your business, whether you’re just starting or a seasoned entrepreneur, it’s important always to think a few steps ahead. To grow and sustain a healthy business, you need a vision and a plan to achieve your vision. Building an annual business plan is one of the most important steps in achieving your vision.
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.
As we close out the final quarter of 2023, now is the perfect time to start building your strategic plan for 2024. The next several weeks present an excellent opportunity to take stock of what has gone well this past year and your goals to stay on track for your long-term vision.
In working with hundreds of entrepreneurs, we’ve found the first step in developing a solid business plan is setting the right mindset.
We’ve pulled our resources together to create a guide that you can use to start building your 2024 business plan. In this article, we will talk about how to get in the right mindset, connect your annual goals to your long-term vision, and break your goals into tactics that you can use to achieve massive growth. We’ll also share a few key takeaways, including:
- Key strategies for getting into the planning mindset
- How to set goals, KPIs, and leading indicators
- Planning Framework – Process to follow, Connecting macro to micro
- How to bring the team into the planning process
With these resources, you’ll be armed with the tools you need to start building your plan for next year.
Setting the Right Mindset
When it comes to business planning, mindset is so important.
Planning requires innovation, and it requires you to be in a mindset that allows you to shift and grow.
As an owner, it’s important to check in with yourself. Are you living in the past, present, or the future? Living too much in these areas can be detrimental to your business planning. You need to be able to reflect on the past without letting it dictate your future, and you have to be realistic about your future to set yourself up for success.
Here are seven key principles to adopt for a successful planning mindset.
- Take Space for Your Planning
Effective planning requires time and focus. Set aside dedicated periods for planning, free from distractions. This lets you think critically about your goals and strategies, leading to more thoughtful decisions.
- Give Your Team Space for Planning
Planning isn’t limited to individuals; it’s a team effort. Encourage open communication and collaboration within your team. Provide opportunities for team members to contribute their insights and ideas during the planning process.
- Plan Out Multiple Scenarios
In an uncertain world, it’s essential to prepare for different outcomes. Develop contingency plans and scenarios to adapt to unexpected challenges or opportunities. This flexibility ensures you’re ready for whatever the future holds.
- Be Firm on Macro, Be Open to the Path on Micro
Maintain a clear long-term vision while remaining flexible in your day-to-day execution. Your overarching goals should guide your actions, but be open to adjusting your tactics as circumstances evolve.
- Simplify to KPIs (Max Five That You Will Drive)
Key Performance Indicators (KPIs) are your compass in the planning process. Select a maximum of five KPIs that align with your goals and track them religiously. This simplification keeps your focus sharp and helps you measure progress effectively.
- Increase Cash Threshold
Financial stability is the backbone of any plan. Ensure you have a healthy cash reserve to weather unexpected financial storms. This financial cushion can provide peace of mind and the flexibility to pursue opportunities when they arise.
- Review with Your Advisor
Whether it’s a mentor, coach, or trusted colleague, seek guidance and feedback on your plans. An outside perspective can help you identify blind spots and refine your strategies. Regularly reviewing your plans with an advisor adds an extra layer of accountability.
Embracing a planning mindset is not only about creating a roadmap but also about adapting to the twists and turns of your journey. By implementing these seven keys to planning, you’ll be better equipped to navigate the complexities of your personal or professional life, setting yourself up for success in the long run.
Step 1: Look at Your Vision & Long-Term Goals
The first step in any strategic plan involves looking at your business’s long-term vision and goals. By analyzing 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 pursue that end destination.
If you don’t have a clear vision for your business or feel yours is outdated, it might be time to take another look.
Whether you’re setting your business goals for the first time or need a little help getting on track, our team at Cultivate Advisors is here to help you achieve your short-term and long-term goals!Schedule Our Free 1:1 Advising Appointment
Step 2: Perform SWOT Analysis
A SWOT analysis stands for strengths, weaknesses, opportunities, and threats. This is a tactic businesses use to help reveal blind spots that business owners or employees might not see on a day-to-day basis. Performing a SWOT analysis helps your company slow down and ask probing questions that unveil essential information about your company and where it wants it to go. It is the easiest way to self-evaluate your business both internally and externally.
The strengths and weaknesses of a SWOT analysis are considered to be internal, while opportunities and threats are considered to be internal. What does your company do well, and where can you make improvements? Opportunities and threats are even more important in today’s marketplace as companies evolve and innovate faster. Rather than trying to put out fires as your competitors make positive steps forward, a SWOT analysis allows you to act as a firefighter ready for battle. As a best practice, strive to complete a thorough SWOT analysis at least once per quarter to keep yourself accountable and aligned with your goals.
Step 3: Set Your Macro Goals
What do you need to accomplish this year to achieve your vision?
Identify 3-4 overarching goals for your business. For example, do you want to launch a new product or service? Do you want to recruit 20 new people? Write down 3-4 things you must accomplish to achieve your long-term vision.
When setting your goals, remember to choose SMART business 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.”
Step 4: Identify the KPIs You’ll Use to Track the Success
Now that you’ve created your business goals, it’s time to shift your attention to monitoring your progress and defining your deadlines.
In addition to setting SMART goals, you should establish clear dates and milestones by which you want to achieve your goals. To ensure you’re on track, you need 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 and understand what works in your business and why. When it comes to KPIs and businesses, there is no one-size-fits-all solution. Each business is unique in its goals and should use its business plan as a starting point to determine KPIs.
Let’s say you have a goal of reaching $100,000 in revenue in the next year. Conduct a brief “sniff test” to determine whether this goal is attainable. Did you only make $10,000 last year? It might not be attainable to set this new KPI, and you could be setting yourself up for failure. Instead, consider establishing more attainable KPIs based on previous business performance that aligns with your personal goals and vision. Once you set your KPIs, they act as a source of motivation to help you meet your larger business goals.
Step 5: Prioritize 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 6: Build Your Strategy to Implement Each Initiative
Now that you have your goals and objectives and know what you are working towards (your vision), it’s time to identify the strategy and plan how to implement these initiatives. It’s best to break it down to a weekly schedule 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 this year to be on track for that goal?
Year 1 –$5 M
Year 2 – $ 7.5 M
Year 3 – $10 M
Once you have those numbers, let’s break it down further. What do you need to do next year to make it happen? What do you need to get there monthly, weekly, and daily?
The most common metrics to break down leads for marketing, sales transactions, and conversions, as well as the people and resources needed to achieve your revenue goal.
Here is an example:
Annual Goal – $ 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, as you realize what needs to shift to level up.
Once you get down to the day, you can take it a step further by determining how many calls or meetings each person on your sales team needs, 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.
Step 7: Hold Yourself Accountable
The accountability factor of your business plan needs to come into play as soon as you establish your goals. When you set a target to hit, what will the ramifications be if you don’t hit them? Although business owners are all unique in their goal-setting approach, it’s always important to consider what happens if you don’t hit your agreed-upon KPI. It’s tempting for business owners to get bogged down in the day-to-day activities of their companies, but this approach doesn’t hold them accountable for the bigger picture. As a best practice, business owners should spend at least 2-5 hours per week thinking about what is going well and how to improve.
Plan Your Business Goals with Cultivate Advisors
Developing a plan for your business is the best 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.
You don’t have to go at it alone. Reach out to Cultivate Advisors to dig into your business, uncover bottlenecks, and develop a roadmap based on your goals. With this roadmap, you’ll have a tangible plan you can implement to reach your long-term goals.