Thanksgiving holiday weekend is an excellent time to review 2018 business plan and begin preparation of a game plan for 2019.
Back in 2014 Dipa and I went to Infusionsoft headquarters to participate in Infusionsoft Elite Forum and created our first ever Everest diagram.
Bringing home the Elite framework was one of the best business decission we have ever made. In this blog I am going to share the annual planning, quarterly review and monthly progress monitring process. We have modified what we learned from Elite Forum to suite our needs and adopted tools that are appropriate for our size business.Today, I am going to share my planning process. I hope this helps my business owner friends.
There are two set of variables to quantify. According to Dr. Michael Porter of Harvard University, when you do an eight paradigm SWOT, you focus on two set of variables: iFAS (Internal Factors) and eFAS (External Factors) that affect your situation. Your strengths and weaknesses are internal, where as opportunities and threats are external. Once you catalog your S,W,O and T, you can develop your SO strategy, ST strategy, WO strategy and WT strategy. This eight paradigm framework is the baseline for you to think about everythig that affects your business.
This blog post is a 'plan for a plan'. Here is the step by step process we follow at eLaunchers.
- Year in Review: We start with reviewing 2018 business plan that was written in 2017 and compare it to what we accomplished, what we were not able to do, what we were expecting and what happend. We examine and re-catalog our current strengths and weaknesses. We examine and re-catalog our emerging opportunities and threats for 2019. We examine 2018 documentation and determine what remains true, what is evolving and what is now-moot.
- Focus 2019: This document has following definitions. All through the year, whenever we get attacked by shiny objects, (opportunities and threats) we refer to the focus document to decide what we should do about it.
- Areas of focus
- What we will DO
- What we will NOT do
- What we will BE
- What we will NOT be
- What we will sell
- What we will NOT sell
- Who we will SELL TO
- Who we will NOT sell to.
- Culture Guide: Review and update the culture guide is the next step. This document talks about who we are, what we do and how we roll. We used BlissBOOK to create our culture guide.
- Everest Diagram: Elite Forum Everest diagram is the viaual of the 1000 day business plan.
- Gameplan: Elite Forum game plan is the visual for the 300 day and 100 day plan. We modified the gameplan matrix to suite our situation and needs. Our gameplan diagram has the following elements:
- Annual priorities
- Evidence of success. (How are we going to measure progress and when do we celebrate success).
- Quarterly priorities for Q1, Q2, Q3 and Q4 as we see during Q1 quarterly plan.
- 7 departments of the company and 'Big 3 priority' for each department.
- 'Big 3 priority' for me and 'Big 3 priority' for my team. (Each person has their own individual big-3 and a big-3 for the team they belong to).
- Key Matrix: For each month and each quarter. For us, we keep track of the following:
- Customer acquisition costs
- Production costs
- Overhead costs
- Annual priorities
- Business Plan: It is not very painful to re-write and re-publish the 2018 business plan for 2019. We are simply updating things that have evolved, adding things that are new to eLaunchers and deleting things that are now moot.
- The planning software LivePLAN has the following elements:
- Pitch. This is our one page business plan. This is how we describe who we are and what we do to our coaches, consultants and counselers. This is how we describe our business to new employees, new vendors and to eachother.
- Plan is the narrative document of business plan. It has Executive summary and the usual LivePLAN sections.
- Forecast keeps track of up to 50 lines of revenues (we don't have 50) and up to 100 lines of expenses over a period of months, quarter and year. It pulls data from Quickbooks so we can see last three years and project next three years. This is the quantitative part of the plan.
- Benchmark compares our forecast to other companies in our industry to make sure our expectaitons of revenues, growth and profitability are reasonable as compared to the reported trends of our industry.
- Schedule keeps track of major accomplishments to be complated during the upcoming year. This is not a project management tool, this is a list of things to thrive for and accomplishments to celebrate.
- Dashboard pulls actual financial data from Quickbooks and compares revenue lines, expense lines and profitability to previous time period, forecast and benchmark so we can see how we are doing.
- Annual report and Quarterly Reports are prepared. Annual report includes Q1 quarterly report so we only have to make three more quarterly reports. The reports includes Quarterly TOPS (Tctical Operational Priorities) and SMARTs (Specific, measurable, attainable, relevent, time bound goals). The reports are the working documents for conducting annual meeting, quarterly meetings and monthly meetings.
- Meetings: Annual meeting takes 2 days. Quarterly meetings are 1/2 day. Monthly meetings are 1 hour.
Business plan is shared with partners (me and Dipa) and our advisors/coaches. Annual report and quarterly reports are shared with key employees and contractors. We summarieze the business plan in a power point so when we share it with our advisors/coaches we can quickly jump to the areas of concern/concentration.
The total time we invest in this process is about 100 hous a year. Yeah, it is a lot of time and effort, but we consider this to be an important exercise. If we want to stay on track, we have to know where the 'track' is and what it is going to look like to be on track.
This does not eliminate all ambiguity from business. We can not plan how market will react, we can not plan what opportunities and threats will emerge. We can only plan OUR act. This process helps, it helps a lot!