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6 Ingredients That Help You Plan for the Coming Year

Strategic planning is an essential part of long-term business success. You might be able to fly blind into the future for a year or two, getting by on grit, know-how, and luck. But you don’t drift to destinations you would have chosen. You can’t arrive at a destination if you don’t know where you’re going.

Strategic planning can sometimes feel like a black box. It’s not taught in business school—at least not well. The books I’ve read on strategic planning are more academic than practical. They’re geared almost exclusively toward multinational, multibillion-dollar companies. They don’t have much to offer to the owners of small-to-mid-sized businesses.

That’s why we created our Strategic Design framework, and it’s one of the projects we’re most proud of at Full Focus. It’s a paint-by-numbers strategy for creating a vision for the next three years of your business and then turning that vision into action.

You can access that content on-demand here. But before you begin, you’ll need to set the stage. There are six essential ingredients you need to gather before beginning any kind of strategic-planning process. They’re so essential that we require clients to have them on hand before beginning Strategic Design.

Each of these ingredients involves collecting information on your past performance and present realities. The context they provide will be invaluable as you plan for the future.

Ingredient 1: Employee Survey

What are your people thinking? I haven’t always realized the importance of that question. It took me a while (too long) to recognize that my perspective on my business wasn’t the right one or even the most important one. The people on the ground can provide perspectives, understanding, and ideas that are essential as our leadership team charts the course for our future.

We’ve found that the best way to take the pulse on our organization is through an anonymous employee survey. Most of our surveys aren’t anonymous at Full Focus, because candor is important in our culture. But we keep this survey anonymous, because we want to remove any obstacle to hearing the unpolished truth.

We ask about engagement, benefits, and other topics directly related to morale. But we also ask our team what opportunities and challenges they foresee and what they believe we should address. Their feedback informs the priorities we choose as an executive team.

It might be tempting to believe that an employee survey is unnecessary. After all, you meet with your executives, and your executives have insight into their teams. But a recent multinational survey of 10,000 knowledge workers conducted by Future Forum Pulse reveals just how misleading this reasoning can be.

In it, researchers found that executives were nearly three times more likely to want to return to the office than non-executive employees, who tend to prefer remote work. Now imagine you’re in a room with your executive team discussing whether or not you’ll require in-person work during the coming year. You might assume everyone thinks it’s a great idea, because everyone in the room thinks it’s a great idea. But you’ve overlooked everyone not in the room.

These are the kind of gaps an employee survey makes it possible to catch. You don’t have to agree with or act on all the feedback you receive. But you should take the time to hear what your team has to say. 

Ingredient 2: Relevant Financial Data

It can be daunting to dive into financial data, especially if your business is in its earlier stages and it’s not routine. But the facts are friendly. Understanding the financial patterns and realities of your business is essential to planning your future.

What counts as “relevant” data? It will vary some by industry, but start here. Look into the past three to five years and begin compiling metrics such as the following:

  • Your year-to-date income statement
  • Your budgets for the previous years
  • Your forecast for the coming year
  • Trailing twelve-month trends: detailed income statement, volume, and rate
  • Your year-end balance sheet from previous years
  • Your gross margin and profit margin numbers
  • Capitalization, debt, and cash flow data
  • The profitability of each team member (profit/number of team members)

This list isn’t exhaustive, but it’s a start. You need insight into questions like these: Are we becoming more or less profitable? Are we holding steady or losing ground? Is our business becoming more efficient or less efficient? The answers to these questions will reveal your constraints and opportunities.

Ingredient 3: Status of Current Goals

Measuring your annual performance against your goals helps you spot the gains and the gaps. When you make progress toward your goals, you’re making progress toward your vision. 

This check-in doesn’t have to be complicated. You need to know where you stand, whether you’ll be able to recalibrate in time to achieve the results you hope, and how any shortfalls will impact your position in the coming year. Then, you can adjust your present strategies and make more informed decisions about future goals.

Ingredient 4: Key Product Data

What products make you the most money? What products are the most expensive to create? What do you sell the most? What’s happening to your manufacturing costs? And how are production timelines shifting?

Think about what access to this information would make possible as you plan for the coming year. You could reallocate resources toward the product that sells the most units. You could double down on marketing the product with the highest profit margin. You could notice opportunities you’d otherwise miss.

The most helpful document will be a Product or Class of Product P&L (profit and loss statement). These documents will offer data on each segment of your business, so you can make decisions accordingly. 

Ingredient 5: Status of Key Stakeholders

Stakeholders can include investors, customers, and board members, but the most important stakeholders are your team. Without them, you can’t bring anything into the world. 

Knowing the size and diversity of your team is a great start. You’ll also want insight into how your teams compare to one another, recognizing where one team might be over-resourced while another is under-resourced. Then you can plan for your future growth.

Ingredient 6: Mission and Values

What you do flows from who you are. Your mission and values will always shape the decisions you make for the coming year. Strategic planning is also the time to revisit them.

These documents are some of the most stable in your business, but they do change over time. If you need permission, you have it: your mission and values do not have to be set in stone.

They shouldn’t change more often than once a year, and those changes should usually be minor. But annual adjustments create congruence between the business you claim to be and the business you are. We find our mission and values fit us better each year.

The quality of your planning will correspond with the clarity of your context. Data-based decisions drive growth. Gathering these ingredients will better position you to lead your business into the future.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, we will receive an affiliate commission. Regardless, we only recommend products or services we use and believe will add value to our readers. We are disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.

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