When I was getting my MBA back in the mid-90’s, the focus on planning was VERY real. Business plans, marketing plans, exit plans, strategic plans, etc., were all the rage and it seemed like all you really needed to be successful was an idea, a copy of BizPlan Builder with all of it’s fill in the blank forms, and an ink-jet printer. Just fill ‘em out, ship a couple of hundred around to the venture capital firms and – voilà – investors will be beating on the door of your parents’ garage just to give you money!

I know this, because I tried it…and it didn’t work out so well.

While we did eventually find investor money for our company, I learned a very valuable lesson about plans: If a plan is too long, too complicated, or too ambitious, IT WILL NEVER WORK. This is because, by our very nature, we are wired to be reactive and think in the short-term. We are more willing to spend time planning a two week vacation than we are to spend time planning our next 12 months of business strategy, simply because the RESULT is near and tangible. We can see it and feel it and touch it.

This is why, over the years, I came up with an alternative planning method that allows small business owners to have very significant short-term wins, while still staying focused on the longer term goal. The “annual plan” still exists in some sense, but it is supported by much shorter (usually 10-14 weeks) plans that have measurable outcomes each step of the way.

Before I get too deep into my alternative planning, method I do want to say that there is one form of annual planning that I support and encourage my clients to conduct, and that is the process of creating an annual budget focused on very specifically achieving the BOTTOM LINE goals that they have for their companies. Note that I said BOTTOM LINE. Too many companies focus on the TOP LINE and ignore their own personal take-home profit. More on this in another issue.

Once this budget is in place, then the rest of the planning simply exists to help accomplish this goal through a) short term, b) simple, and c) attainable goals, supported by regular daily and weekly actions.

So let’s get into it.

One of my core beliefs around planning is that the quality of your plan matters significantly less than your ability to actually EXECUTE on a plan – any plan, really. The longer-term, more complex, and more difficult your plan is to achieve, the less likely you are to execute all of the steps. So, in this method, the first thing that we’re going to do is break our longer-term goal down into smaller, achievable goals that can be completed in 90 days or less.

The system itself is actually very simple. Here are the steps:

Create your long-term goal. While short-term planning is the way to go, it doesn’t work without a solid long-term goal. Pick something that actually matters to you, not something that you think SHOULD matter. For instance, as I mentioned before, many people believe that growing the sales revenue in their business is the most important thing. While it’s true that a business cannot survive without revenue, focusing on the top-line revenue while ignoring the bottom line income, is a sure-fireway to the poor house. Instead of choosing a long term goal like, “create sales of one million dollars,” create a goal that matters like, “create net-profit of $200,000.”

Break your long-term goal into 90-day Goals. Once you’ve got your long-term goal in place, you can now begin to break the goal into shorter goals that are more quickly attainable. Continuing on the example from above, if our long-term goal is to create a net profit of $200,000, then our four 90-day goals could look like this:
Create an annual budget based on a $200K bottom line.
Implement a weekly and monthly financial reporting process.
Ensure that gross profit is >50%
Reduce operating expenses to 30% of total income.

Choose ONE 90-day goal to work on exclusively – Now that you’ve got your four short term goals established, pick the first one and schedule time in your calendar to work specifically on JUST THIS GOAL. This is the most important part of the process. Our brain doesn’t know the difference in setting a goal and achieving it, so we must create consistency in our schedule to trick our brain into working on the goal regularly, or it will think that we’ve already completed the goal. The calendar is our best friend in this case. By scheduling structured time to work SPECIFICALLY on our one goal, we are tricking the brain and allowing the structure to set us free.

Create daily and weekly actions that will move you toward the achievement of this ONE 90-day goal. Let’s say that we’re working on goal “c” from above, which is, “Ensure that gross profit is >50%.” Now that’s a pretty big goal. How do we break that down into daily and weekly actions? What are the daily actions that we could take to make sure that this could happen?

I would suggest the following:

Daily – Complete a post-production review (I sometimes call this a post-mortem) of each job from the day before, to make sure that the gross profit % is greater than 50%.
If the GP is >50%, then we move on.
if it is <50% then we dissect that job to determine what adjustments in pricing or efficiency we could have made to get the gross profit into tolerance. Weekly – Schedule a meeting with each of our project supervisors with the results from the last week ,to create a plan to improve this week’s results. That’s really it: SIMPLE, REPEATABLE actions that drive the specific results that we’re looking to achieve. There is NO NEED to get crazy with this. Track the simple things regularly and make small changes each period to improve results. THAT'S IT! Track your progress on a daily and weekly basis. Tracking is important because it lets us see if we’re staying the course AND it forces us to REGULARLY judge our progress. My recommendation is to create a spreadsheet, similar to this one, to track your progress,though really ANY tracking that you will consistently update will do just fine:

So that’s really all there is to it. I don’t know why we try to make planning such a huge process when truly it’s as simple as this process:
Create a long-term goal.
Break that goal into 90-day goals.
Choose ONE goal and work on it exclusively.
Create daily and weekly actions around that goal.
TRACK IT!

So, eliminate that annual plan, and commit instead to shorter “sprint” plans that allow you to experience the fruits of your labor sooner and with greater fulfillment!