A couple of weeks ago, in the Free Agent Collective, our topic of discussion was yearly planning. In that session, we met to help each other develop our business plans for 2023.

Today, I want to share the main points we focussed on in that session, so you can start developing your own plan for 2023!

Preparation - Break your goals down into main projects/initiatives

Before you begin the process, there is an important preparatory step.

Some businesses have more than one “project” or “initiative” that they are working on. For example, many lawn care companies turn to snow plowing in the winter.

If such a company wants to grow the snow plowing part of their business, that would be one project. If they also want to grow their summer landscaping clients, that might be a separate project. Or perhaps they want to open a new office in a neighbouring city. Each of those activities would be a separate initiative.

Once you have each of your initiatives listed, choose one of them, then move on with the following steps. (You will go through all of these steps separately for each of the initiatives you have identified.)

Step 1 – Choose your 1-year goals

We start our annual planning by identifying where we want our project/initiative to be at the end of the coming year.

But, when deciding what such long-term goals should be, you need to make sure your goals are SMART. That means:

· S – specific (no vague goals, you must be specific!)

· M – measurable (you can’t tell if you’ve achieved a goal if you don’t have some way of measuring it)

· A – achievable (no point in setting a goal that you won’t be able to reach)

· R – relevant (it must be something that will actually make a difference to your business)

· T – Time (it must have a time limit e.g. “I will achieve this by Nov 1”)

Using our landscape company again as an example, let’s say they want to grow the snowplowing branch of their business. However, “growing our business” is not a SMART goal. It’s vague, not measurable, and has no time limit. The following chart shows a much better goal.

Let’s take a look at this new goal in terms of SMART.

· S – specific (an increase of 50%, or $9,000)

· M – measurable (the goal is a number against which they can measure progress)

· A – achievable (presumably they have given real thought to how much they can grow their business in one year, and $9,000 is an increase they truly feel they can meet)

· R – relevant (the goal is directly related to growing their business)

· T – Time (the goal is to be achieved by the end of the year)

Once you have decided on your main goal(s), move on to step 2.

Step 2 - Assess your current situation (where you are now)

The idea behind this step is to get some numbers that measure where you are now. It will also form the basis from which you will plan forward.

For example, let’s say you want to increase sales. Here are some of the numbers representing your current situation that you might want to look at.

· Average number of monthly sales transactions

· Average amount of total monthly sales

· Number of different products/services I sell

· Number of ads run in a year

· Number of repeat customers per year

And so on.

The idea is to think carefully about all the different aspects of your initiative that can be put into numbers. Then work out what the actual numbers are now (or for e.g. the past year). Once you have those, move on to step 3.

Step 3 – Decide how you can measure growth

The next step is to determine which of the metrics you identified in step 2 can be used to measure your growth moving forward.

For example, you could identify the following as the metrics that will measure whether or not you have reached your goals.

· Average number of monthly sales (how many clients)

· Average amount of total monthly sales (how much earned)

Or, perhaps you have decided that what you need to make those sales happen is to start advertising. Then perhaps you can add a third area to measure: Number of ads run each month.

Whichever metrics you choose, make sure they are numbers that will actually tell you whether you have made progress in your goals.

Step 4 - Create quarterly goals

Using the metrics you identified in step 3, break those numbers down into quarterly goals.

For example, let’s say our landscape company earns snowplowing income in Quarter 1 and Quarter 4. Their quarterly goals might look like this.

Again, make sure each of these quarterly goals is SMART!

Step 5 - Measure progress

In order to make sure you stay on track, it’s important to measure your progress periodically throughout the year.

So, at the end of each quarter, assess what you have achieved. If you’ve reached your quarterly goals, great! If not, take some time to reflect on why not, and think about what you can do in the next quarter to make up for it, if possible.

As an example, let’s say that at the end of Q1 our landscaping company’s numbers are as follows.

They are $3,000 short of their Q1 income goal. They can then use this information to readjust their quarterly goals for the rest of the year so they can still reach their final goal for the year.

Perhaps they could change their plans for Q4 and aim to earn $7,000 then, instead of the originally planned $4,000. Or perhaps they could plan to offer early bird packages in Q3, a quarter in which they haven’t tried to make sales in the past. Or perhaps they decide to take out ads in Q4, another thing that perhaps they have never done.

The idea is that, by measuring where you are quarterly, you have time to readjust the remaining quarters to keep your total yearly goal on track.

Or maybe you’ve reached your quarterly goals, and then you know you are doing something right! But you won’t know whether you’ve reached those quarterly goals if you don’t measure them.

Summary

Too often, we trudge along with vague business goals, goals that are hard to achieve because they are not clear.

The purpose of the steps outlined in today’s article is to give your goals the solid form they need to form the basis of your annual plan. Once your annual goals are clear, and then broken down into sub goals, those sub goals become the steps you need to take throughout the year to make your annual goals happen.

It’s the process we helped each other with in the Free Agent Collective a few weeks ago, and it’s a fantastic way to prepare for a great new year!

Happy Planning!

Tim

Helping you engineer the business of you

Information in this article is for general information and is not intended as professional advice.

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