The beginning of a new quarter is the perfect time to start planning the next year for your business. Start the next year or quarter off on the right foot by creating an annual business plan for your company.
Q4 often brings a flurry of business-related activity. And while all this activity helps fill the pipeline, it can distract you from reflecting on past performance and preparing for the year or quarter ahead.
Fortunately, you can write an annual business plan at any time of the year. Start your plan now to set your team up for success.
What is an annual business plan?
An annual business plan is just that — a plan for you and your employees to help achieve the company’s goals for the year. Think of an annual business plan as the guide to complete all of your company’s overall goals outlined in your initial business plan.
The first business plan you wrote for your business is the blueprint and the annual business plan is the detailed instructions to keep your business running long-term.
Usually, an annual business plan contains a short description of your company, a marketing analysis, and a sales/marketing plan.
Because an annual business plan is for the year, you’ll want to review your business at the end of four consecutive quarters and revise your plan for the next four quarters.
Why is annual business planning important?
Even though the fourth quarter might be a busy time of year, don’t put off creating an annual business plan.
Not only will your annual business plan keep you on track, it will also help you map out a strategy to keep your employees accountable. You can then more easily achieve the overall goals of your business.
Here are some reasons why it’s well worth creating an annual business plan for your company.
You can measure your success.
An annual business plan is the best way to measure your success. And I’m referring to the collective “you” here because it takes the entire company or all of your employees to make new business efforts effective.
An annual plan not only sets expectations for you but also for others within your company who need to contribute to the business’s success.
You can reflect on the past and plan ahead.
Creating an annual business plan allows you to reflect on the past 12 months.
As you reflect on the previous year, you’ll be able to get a good idea of what your business is capable of doing and set accurate, attainable projections based on previous numbers.
You’ll define your business goals.
Your annual business plan will shed some light on what the heck you do at your company. For those who are not routinely involved in new business, it can seem like a black hole of mystery.
Sharing your plan — whether to an executive committee, department heads, or even the entire staff — adds clarity and gives everyone something to aim for.
You can impress your boss.
If you head a department that could benefit from an annual business plan, don’t wait to be asked before you start writing. Get on your CEO’s schedule to review your outline and discuss your intentions for putting this plan together.
Sometimes the hardest part is getting started. You can get the ball rolling with the basic template that follows.
Annual Business Plan Template
Each section of your annual business plan will help tell the story of your company and clearly define your company’s goals for the year.
Let’s take a look at each section of the annual business plan template.
The executive summary should be written last, but it should always come first in the business plan.
By starting with a smart, concise summary, you’re showing the same kind of respect for your audience’s time and attention as you would if this were an RFP response.
Company and Business Description
Define your company and your business.
- Who’s on your team, and what do they do?
- How did you grow this year, and how are you planning to grow next year?
- Do you need to hire to achieve your new goals?
- What kind of operational efficiencies did you introduce?
- What is your vision for your company or your mission statement?
The answers to these questions will go in this section of your annual business plan.
Products and Services Line
This section of your annual business plan allows you to clearly define the products and services your company offers to your customers. Use this section to describe your product,
your services, and your pricing model.
What kind of trends are you seeing? How does your business need to adjust to stay competitive? Who are your competitors now? What companies or agencies do you want to be competing against a year from now?
Capture the answers to these questions in your marketing plan.
What tools are you lacking to meet your goals?
If you’re planning on doing personal outreach, you’ll want to invest in a good contact management database or CRM, an email program, a marketing automation tool, or other solutions.
Maybe this is the year for a website redesign. Or, if you’re getting invited to the pitch but not making it past the first round, maybe you need to learn how to tell your story better and invest in rewriting your case studies.
Include what your team needs in this section, as well as associated costs.
Sales is much more than just closing a deal.
What is your process for making a sale? How do you gain new leads? Who is in charge of the sale? Are your processes cohesive for both your marketing and sales departments?
Spend some time thinking through your sales plan and include it in your annual business plan.
Any good annual business plan considers legal matters.
Cover all your bases by listing all government registrations, permits, health codes, insurance requirements, and other legal matters that are pertinent to the operation of your business.
Crunch the numbers. Based on your historical win rate, how many sales do you need to close to meet your numbers? How much can you rely on organic growth? How much do you need to focus on proactive prospecting?
Don’t do this in a vacuum. Spend time with your CFO and CEO to make sure you are managing their expectations as well as integrating corporate financial goals into your plan.
The Annual Business Planning Process
Writing your annual business plan should not be a solo endeavor. Consult the CEO, the CFO, the heads of your marketing and sales departments, and other knowledgeable employees to create the most comprehensive annual business plan for your company.
Before you begin writing your annual business plan, you should sit down with key employees and have a genuine discussion concerning your business and its goals. With your team, brainstorm the answers to the following questions:
- What tools will you need to meet your goals?
- How will your business meet customer demand?
- Does your product or service set you apart from the competition?
- Is your product or service compelling to your audience?
- What are the current marketplace trends?
- How can your company or business stay competitive in the current market?
- What was your company’s performance in the last 12 months?
- Does your company need to onboard new employees to help achieve the company’s goals?
Creating an annual business plan may seem like a daunting amount of work. It’s even more daunting if this is the first time you’ve ever created a plan. That's why you need to use the annual business plan template to get started.
I can't promise a last-minute RFP won't ruin the end of your quarter, but you’ll be prepared with an annual plan already on hand.
Editor's Note: This post was originally published in Oct. 2015 and has been updated for comprehensiveness.