The Importance of Annual Planning
Do you know the importance of annual planning for your business?
There are a lot of different ways a business can go about developing an annual plan, but regardless of the process there are a few things that every annual plan should cover.
The first thing your annual plan should provide is a clear vision of your plan, which should include S.M.A.R.T. goals. As an organizational leader, your goal should be to establish a clear cut idea of where you want to be by years end.
Focus on Improvement
The second part to your annual plan is to focus on improvement. Every business should have the mentality of always wanting to make their business better. Developing the annual plan is a good time to sit down and reflect on what you can do better.
A third thing to consider is the follow up process. Once you set up what your vision is and how you want to improve, then ask how you are going to make sure you reach those goals. Having a system in place to monitor your progress is key to any organization’s success.
Another crucial part of any annual plan is budgeting. For any business to be successful you need to have an accurate idea of what your finances will be moving forward. The first important part of your yearly budget is projecting your income. Based on your income in the previous year, and factoring in economic conditions and growth, you should be able to get an idea of your projected income. Then you want to compare your projected income to your expenses. You can look at your past year expenses across all of your functional areas, and factoring in growth project your year-end expenses. This gives you a good start for a yearly budget. The most crucial part of any annual plan is making sure you have a system in place to check that status of any business segment at any given time. So when developing your plan it’s a good idea to work in metrics to measure your initiatives, and whether or not you are on track to reach your goals. Then, implementing time to check the status is the next step. These can be weekly, bi-weekly, or monthly checks. This will also help you to quickly and easily identify any problems that may arise. While not all businesses are the same, following this basic outline will help you begin down the path of planning for the year to come. There are a variety of ways to go about developing your plan, but knowing the importance of annual planning and having a plan is in place will get your year off on the right path.