Why failing to plan is planning to fail; and the 5 simple steps to get into action.
As spring’s blossoms start to appear, so too should thoughts of the new year. Too many companies, both big and small, skip over the step of writing a decent annual plan and taking the time to pause & reflect on how the business is performing. Its all too easy to get caught up in the day to day of ‘doing’ and not stepping back to say ‘what’s working - what’s not - and what do we need to do differently’. For more-established business this means that you can get stuck doing things ‘the way you’ve always done them’ because its easier to repeat the familiar rather than understanding what actually works. For startups, it can mean getting caught up in a hamster wheel of being eternally busy but not necessarily getting any further ahead or achieving your goals.
Failing to plan means you run the risk of:
Focusing on short-term tactics at the risk of long-term goals
Causing confusion for consumers with erratic changes in direction
Wasting time
Wasting resource & money
Choosing based on ‘gut’ rather than ‘facts’
Lacking a clear guide for decision-making throughout the year
Unable to get out of the detail of everyday business
Missing opportunities because you haven’t gone hunting for hidden gems inside your business
Working through your annual plan doesn’t need to be scary or overly complicated. The secret is getting out your pens, notebooks, post-its, computer or whatever you need to get into thinking mode, and then following the five steps below.
THE FIVE STEPS TO ANNUAL PLANNING
1) WHERE ARE YOU NOW
This is the ‘diagnosis’ part of writing a plan where you dive deep into the numbers to understand how everything is tracking and where you might have problems starting to get out of hand or opportunities appear. Your accountant should be able to help with pulling sales, profit and cashflow reports; and if you sell online then look at the different analytics reports available. This is also the time to get out and talk to the people buying your product, that’s that you wish were (target future customers), and any other partners like distributors, key service providers etc.
The hard stuff… diving into the numbers
Its about looking at patterns in sales (both volume and value), your performance with different retailers or sales channels
Pull out your sales reports from Shopify or Xero and look at trends over time. Are there any patterns emerging?
Talk to your accountant and look at your financials. How is your cashflow? What red flags are there?
Look for hidden gems in your product range. These are generally products with loyal customers, great repeat rates and highly positive
The soft stuff… talking, listening and thinking
Talk to your retail or wholesale customers - and if you’re new and don’t have many yet, talk to your ideal future customers
Talk to your consumers - what’s working, what do they wish you did (or didn’t) do
Get clear on what your ambitions are for your brand and business
2) WHERE DO YOU WANT TO BE
If you don’t know where your business is going, then any road will do. The danger of not having clear direction is you’ll likely end up lost, confused and wondering how you got stuck in a dead-end. By knowing your current performance (part 1) you should be able to set clear targets for the next 12-18 months. Setting a combination of realistic and ‘amazing-if’ stretch goals is a good way to know if you’re on track or not. Try not to get too complicated or write long wish-lists. This is about focusing on the big goals that you can be confident to keep in mind when making decisions.
What are your goals for next year
Keep it simple - 3 hard metrics and a stretch ‘awesome’
What would it be ‘amazing if’ you achieved in the next 12 months
Get specific and think SMART - Specific, Measurable, Attainable, Relevant, Timebound
3) WHAT WILL IT TAKE TO GET THERE
Setting a strategy and the tactics behind it, is about making sure you are clear on what you will and won’t do, and where the boundaries are that you want to avoid. One of the biggest challenges for business is deciding what you won’t do, and being clear on what would need to change if you decided you needed to do it in the future. Market circumstances are always changing and
One big over-arching strategy - this should be clear in identifying what you will and won’t do. It could be related to new sales channels, targeting customer groups or expanding into new product areas.
Then 3-4 key focus areas to support the strategy. These are intended to give you clarity to map your tactics against. They are not goals like ‘grow sales’ but could be ‘target new wholesale customers in North America’.
Then tactics underneath to help you achieve the strategy. These can be short statements and don’t need to be too complicated. You should be able to explain them easily to others and use for setting more detailed plans
This isn’t an exhaustive list of ‘things to do’. Its the key actions that will get you towards your goal.
They could be operational (systems and process, manufacturing, alternate suppliers, resource/ people), sales (new retailers, wholesalers) or linked with targeting new customers (advertising campaign, product launches or improvements etc).
4) WHEN ARE YOU GOING TO DO IT
A goal without a deadline and action plan, is just wishful thinking. If you want to grow sales by 25% in the next 6 months, or launch 3 new products in time for Christmas, then its critical that you map it out. A common pattern in start-ups and small business is to work only on the immediate tasks ahead for the week or month which means either missing out on key deadlines, or rushing meet deadlines causing stress and potential burnout.
Activity calendars don’t need to be complicated. Excel has templates for monthly planning or you can work up a simple table by hand. Try to break it down to months, and then weeks with key dates highlighted so you can keep track in your planner.
A few tips to successful planning include:
Work backwards from big activities. Map these out first including major events like Christmas, school holidays, major sales events and even any personal dates like holidays.
Give yourself enough time to get ready rather than rush - things always take longer than you think.
If you want to deal with supermarkets, then make sure you check out their websites to find key contacts and timing. There can be only 1-2 category reviews a year and these are your best (and possibly only) chance to get accepted into a retailer.
Find out more about planning here https://www.pitchfork.co.nz/tips/2019/3/11/planning-the-key-to-being-retail-ready
5) WHAT NEEDS TO BE TRUE & WHAT RESOURCES DO YOU NEED
Once you know what you need to do, its time to work out what needs to be true to make it happen. It could be people, resource, alternate sources of funding or more. By working through this you’ll be able to refine and tighten your calendar and action plan. This could mean finding other people to help you or identifying big gaps in your desired plan.
Are there key people, support or training needs that you need to find or budget for
Do you need external investment - and what are the different ways that you could get it?
There are a range of support networks and funding available for startups and small business including:
Regional Business Partner Network - this is Government based funding, with up to 50% funding available for services including planning, marketing and sales planning. Pitchfork is a registered service provider so get in touch if you want to find out more.
Ministry of Awesome - ideal especially if you are Christchurch based
The Icehouse - Auckland based but has nationwide programs and support including venture funding.
By taking the time to work through an annual plan you give yourself the best chance of success and achieving your goals. Ideally give yourself 3 months before the start of your financial year to write a plan, and also give yourself the ability to flex during the year if there are major changes. While your long term ambition should remain relatively consistent, there is always a need to refine and pivot occasionally if you find major changes in the market, competitors or consumers.
If you need help with planning or working through the steps above, then get in touch. We’ve spent over 25 years working on strategic planning for a wide range of business and brands, and know how to set up clear simple frameworks so you can get in to action with confidence.
