Businesses of all stripes are about to embark upon a new calendar year. Whether you’ve done a lot of strategic planning or just a little, a good way to double-check your objectives and expectations is to revisit your business plan. The end of one year and the beginning of another is always an optimal time to look back on the preceding 12 calendar months and ask a deceptively simple question: How’d we do?

Remember your business plan? Business plans are often overlooked when leadership teams engage in strategic planning and many business owners file theirs away and bust them out only when asked to by lenders or other interested parties. Reviewing and revising your business plan can enable you and your leadership team to ensure everyone is on the same page strategically as you move forward into the new year.

Comprehensive business plans traditionally are comprised of six sections:

1. Executive summary
2. Business description
3. Industry and marketing analysis
4. Management team description
5. Implementation plan
6. Financials

Generally, there are three areas of most businesses that inform the success of a strategic plan. They are:

HR. Your people are your most valuable asset. So, how does your employee turnover rate for this year compare with previous years? High employee turnover could be a sign of underlying problems, such as poor training, lax management or low employee morale. You may need to make hiring and retention efforts a focal point of your next year's strategic plan.

Sales and marketing. Did you meet your monthly goals for new sales, in terms of both revenue and number of new customers? Did you generate an adequate return on investment (ROI) for your marketing dollars?

If you can’t clearly answer the latter question, enhance your tracking of existing marketing efforts so you can better gauge ROI going forward. And set reasonable but growth-oriented sales goals for 2022 that will make or keep your business a competitive force to be reckoned with.

Production. If you manufacture products, what was your unit reject rate over the past year? Or, if yours is a service business, how satisfied were your customers with the level of service provided?

Spotlight on financials

The executive summary is usually the first thing anyone looks at when reading a business plan, but it’s the last section you should write. Start with your company’s historic financial results, assuming it’s not a start-up. Then, identify key benchmarks that you want to achieve in the coming year — as well perhaps longer periods, such as three, five or even 10 years out.

Next, generate financial projections that support your strategic goals. Let’s say you and your leadership team decide to double sales by hiring four new salespeople and acquiring the assets of a bankrupt competitor. These strategic objectives will drive the projected income statement, balance sheet and cash flow statement included in your business plan.

Be particularly sure you’ve discussed how you’ll fund any cash shortfalls that take place as the company grows. Cash flow projections are critical for fruitful strategic planning, as well as for applying for a loan.

Blueprint for the future

One could say that integrating your strategic planning objectives into your business plan is a way to make your strategic plan “official.” By putting it in writing, and including the necessary financial documentation, you’ll have a blueprint of how to build the future of the business. Contact us for help or visit our related service page for more information on howe we can assist you.

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