How to Write an Annual Plan You’ll Actually Use Next Year

Book Giveaway Inside! Plus, 5 mistakes entrepreneurs make, and what to do instead.

Dec 04, 2024

The Best Business Plan is the One You’ll Use

I’ve guided hundreds of business owners through a business planning process.

The businesses that make the most progress are the ones where the plan becomes a living document. It gets posted up on the wall looking clean and full of promise, and by the end of the period it’s covered with arrows and marked up with strikethroughs and new actions.

These business leaders aren’t winning because they cleverly anticipated everything that would happen – they’re winning because they had clear, non-negotiable targets and managed their plan actively, week by week, until they hit them.

Why Planning Doesn’t Work

I heard recently from a business owner who have given up on planning. Whatever they’ve planned in the past has ended up on a shelf, obsolete when challenged by real life events.

Here are 5 mistakes entrepreneurs often make when they build a plan that doesn’t work, and what you can do instead.

1. They waste time on wild guesses

This is usually a result of planning too far ahead. If you’re trying to plan out the next 3-5 years, that document is 99% guesswork and wishful thinking. We can’t predict what will happen even one year from now, so let’s stop pretending we can.

Instead, focus your detailed planning on the next 12 weeks. Within that timeframe you have some certainty about what you can reasonably expect.

2. They confuse having a target for having a strategy

If your so-called ‘strategic plan’ for next year is a bunch of ambitious goals, you’ve got more work to do.

Your plan should tell you more about the process than the outcome – what exactly will need to change? How will you allocate your resources (people, time, money)? What are the leading indicators that will tell you whether you’re on track, and how will you measure them?

3. They only add, and never subtract

The fun part of planning is thinking about starting something new… Launching a new product, hiring great people, onboarding dream clients. Planning for those big moves is exciting! But we can’t ignore the trade-offs.

Unless your plan tells you how you’re going to make room for the new stuff, it’s almost impossible to execute those projects. What will you need to stop doing, delegate, or delay to make room for your new ideas?

4. They’re obsessed with the wrong numbers

Quick – what’s your target for gross revenue in next year? (Almost everyone can answer that question.) But what’s your target for profit? What’s your goal for marketing spend as a percentage of your revenue? What’s the gross margin you need to hit before you invest in that new equipment?

Revenue is a vanity metric. Instead of obsessing over it, get way more granular on your financial goals for the year – I guarantee you’ll have a healthier business a year from now.

5. They’re just putting one foot in front of the other

I like to ask people why they set certain targets. Often, they’ve picked a number 10%-15% better than their current result. In other words, they know where they are now and they’re moving one step forward.

Unless your goals are meaningful, they’re not going to be motivating. When it comes down to it, you might find you’re satisfied with 8% growth – will you really keep going after that, just because you chose a random number and put it on your plan?

Instead, start by thinking about where you want to be, and work backwards from there. What do you need to achieve this year to be on track for your bigger picture goals?

This Week’s Takeaway

As Benjamin Franklin famously said, “If you fail to plan, you are planning to fail.” If you haven’t started thinking about the year ahead, it’s not too late to start.

If your team could use an outside perspective (and a deadline), I have a couple of spots left to help make it happen, online or in house. Reach out to book a date.

End of Year Giveaway!

It’s the end of 2024, and to celebrate the beginning of a new year I will be giving out a free copy of December’s book of the month, “Make Time” by John Zeratsky and Jake Knapp!

To qualify for entry into the draw, all you need to do is interact with this edition of The Extra Mile (Like or Comment)*. The winner will be drawn and contacted on December 18th.

* There are buttons at the top and bottom of this post to like or comment on Substack.
* Please note, eligibility requires you to be located in Canada

Make Time: By John Zeratsky and Jake Knapp

Make Time is a genuinely helpful resource for cutting through the busyness and focusing on what matters most. It’s packed with straightforward, practical tips that are easy to try without overhauling your lifestyle. The advice feels flexible and realistic, making it a great guide for creating a little more space in your day for the things that truly matter.

Check it out!

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