To succeed as a startup, having a comprehensive operational plan is very important. There are no successful businesses that run without a plan. Business plans can be done on a short or long-term basis, depending on what works for you.
Having a plan helps keep your business focused on its goals and objectives, making every employee in the business accountable, and lets you know what direction the business is moving at any given time.
Planning takes different forms, but the most common among businesses is annual planning. As a startup that has put everything in place to launch, you need to start your annual planning. The question you may find yourself asking is – how do I start annual planning at my startup?
Here are five steps that should help you navigate the annual planning process at your startup.
Define your business purpose
The first and perhaps most essential step is to define your business purpose. Every other step you will take along the way rests on this definition. Here, you will have to go back to why you started the business.
What informs and sustains your business idea? Why is your business offering the products and services that it provides?
Defining and redefining your purpose should form the foundation of any planning process for your startup. Until your business purpose is well-defined, it won’t be easy to outline what your goals are.
Set your startup’s goals
While it appears like the primary goal of every business is to make profits, how much profit is desired differs from one business to another. It is impossible to create a viable plan when there are no set goals. Plans are a means to achieve an end or a goal, which is referred to as startup goals.
Important questions that should come to mind when outlining your startup’s goals include:
- How many sales does your startup aim to record at the end of the year?
- How many customers do you plan to reach out to by the end of the year?
- If you have a website, what goals do you have in terms of traffic and conversion rate?
It is safe to say that answers provided to these questions and the many others that will come to your mind can qualify as your goals. Get a sheet of paper and have these goals written out so that everyone working in and with the startup can know what they are trying to achieve.
Create a plan to accomplish your goals
After you outlined your startup’s goals for the year, you can then go ahead to create an annual plan. Annual planning is not the same as every other business plan you come up with. It has to be comprehensive, taking into account every detail of the startup’s activities.
Annual planning covers what the business goals are for the year and the steps to be taken to achieve these goals. Creating a comprehensive yearly plan requires a lot of time as every goal has to be analyzed, and the best steps towards achieving it are considered.
To ensure you are coming up with a comprehensive plan for your startup, you may have to seek the assistance of a professional. To save the high cost of hiring a professional, you can outsource areas that need expert input to an independent contractor while you and your team take care of other areas of the annual planning.
Some important things that should be included in the annual planning of your startup includes:
- Executive summary of the plan
- Composition of the business team
- Analysis of current performance
- The current state of the market
- Business revenue goals
- Available business tools.
Annual planning doesn’t always have to do with making profits alone. It can also cover partnerships your startup wants to enter and how, new employees it intends to bring in and why, and new products or services that may be introduced.
Define how your startup success will be measured
Annual planning at your startup is incomplete if there is no definition of how success is to be measured. For the plan to be deemed as comprehensive, it has to include the parameters for measuring success. It also has to provide specific timelines for when these parameters will be activated or achieved.
Let’s take product sales, for example. Annual planning regarding product sales should not only provide for how much sales your startup wants to record and why alone. Instead, there should be a provision for how increased sales will be measured, especially when you have more than one sales channel.
Your startup can decide to check in with the annual plan every three or four months to measure how much success it has recorded. Doing this will help you identify the strengths and weaknesses of the plan to know if adjustments need to be made.
Specific parameters that can be used to measure the success of annual planning for your startup include:
Make room for contingencies
When beginning annual planning for your startup, you should note that the essence of the plan is to give your business something to run with for the year. As such, you should not make the plan too rigid because the business world is very dynamic.
An excellent way to keep up with the changes in the business world without losing touch with your annual plan is to make room for contingencies.
What happens when things don’t go as planned for your startup? What if an unforeseen act like the covid-19 pandemic happens that alters your startup’s plan and activity? These things do occur, and having contingencies included in your annual plan will go a long way in addressing unforeseen circumstances.
Annual planning for your startup is not rocket science, as you can get it done provided you know how to go about it. Define and redefine your business purpose, set clear and feasible goals, create a comprehensive plan, define the timeline for measuring success, and make room for contingencies.
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