By Cultivate Advisors
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 to always 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.
Step 1: Look at Your Vision and 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 If you don’t have a clear vision for your business or feel yours is outdated, it might be time to take another look.
Step 2: Perform a SWOT Analysis
A SWOT analysis stands for strengths, weaknesses, opportunities and threats. This is a tactic that 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.
The strengths and weaknesses of a SWOT analysis are considered to be internal, while opportunities and threats are considered to be external. 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.
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 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.
Let’s say you have a goal of reaching $100,000 in revenue in the next year. Did you only make $10,000 last year? It might not be attainable to set this new KPI. Instead, consider establishing more attainable KPIs based on previous business performance that aligns with your personal goals and vision.
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.
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 – $5M
Year 2 – $ 7.5M
Year 3 – $10M
Now, 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? 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.
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.
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.