How to Create a Profitable Annual Business Plan [+Free Template]

Jody Sutter

Published: February 09, 2023

The beginning of a new quarter is the perfect time to start planning the next year for your business. Start the next year or quarter off on the right foot by creating an annual business plan for your company.

annual business plan is usually signed off by which month

Q4 often brings a flurry of business-related activity. And while all this activity helps fill the pipeline, it can distract you from reflecting on past performance and preparing for the year or quarter ahead.

Fortunately, you can write an annual business plan at any time of the year. Start your plan now to set your team up for success.

What is an annual business plan?

An annual business plan is just that — a plan for you and your employees to help achieve the company’s goals for the year. Think of an annual business plan as the guide to complete all of your company’s overall goals outlined in your initial business plan.

The first business plan you wrote for your business is the blueprint and the annual business plan is the detailed instructions to keep your business running long-term.

Usually, an annual business plan contains a short description of your company, a marketing analysis, and a sales/marketing plan.

Because an annual business plan is for the year, you’ll want to review your business at the end of four consecutive quarters and revise your plan for the next four quarters.

Why is annual business planning important?

Even though the fourth quarter might be a busy time of year, don’t put off creating an annual business plan.

Not only will your annual business plan keep you on track, it will also help you map out a strategy to keep your employees accountable. You can then more easily achieve the overall goals of your business.

Here are some reasons why it’s well worth creating an annual business plan for your company.

You can measure your success.

An annual business plan is the best way to measure your success. And I’m referring to the collective “you” here because it takes the entire company or all of your employees to make new business efforts effective.

An annual plan not only sets expectations for you but also for others within your company who need to contribute to the business’s success.

You can reflect on the past and plan ahead.

Creating an annual business plan allows you to reflect on the past 12 months.

As you reflect on the previous year, you’ll be able to get a good idea of what your business is capable of doing and set accurate, attainable projections based on previous numbers.

You’ll define your business goals.

Your annual business plan will shed some light on what the heck you do at your company. For those who are not routinely involved in new business, it can seem like a black hole of mystery.

Sharing your plan — whether to an executive committee, department heads, or even the entire staff — adds clarity and gives everyone something to aim for.

You can impress your boss.

If you head a department that could benefit from an annual business plan, don’t wait to be asked before you start writing. Get on your CEO’s schedule to review your outline and discuss your intentions for putting this plan together.

Sometimes the hardest part is getting started. You can get the ball rolling with the basic template that follows.

Annual Business Plan Template

Each section of your annual business plan will help tell the story of your company and clearly define your company’s goals for the year.

Let’s take a look at each section of the annual business plan template .

Executive Summary

Annual business plan template, executive summary

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How to Write a Business Plan, Step by Step

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1. Write an executive summary

2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.

A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.

Bizee

Here’s a step-by-step guide to writing your business plan.

» Need help writing? Learn about the best business plan software .

This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.

Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.

» MORE: How to write an executive summary in 6 steps

Next up is your company description, which should contain information like:

Your business’s registered name.

Address of your business location .

Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.

Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.

Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.

» MORE: How to write a company overview for a business plan

annual business plan is usually signed off by which month

The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.

If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.

For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.

In this section, go into detail about the products or services you offer or plan to offer.

You should include the following:

An explanation of how your product or service works.

The pricing model for your product or service.

The typical customers you serve.

Your supply chain and order fulfillment strategy.

Your sales strategy.

Your distribution strategy.

You can also discuss current or pending trademarks and patents associated with your product or service.

Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.

Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.

» MORE: R e a d our complete guide to small business marketing

If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.

You may also include metrics such as:

Net profit margin: the percentage of revenue you keep as net income.

Current ratio: the measurement of your liquidity and ability to repay debts.

Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.

This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.

» NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.

Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.

Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.

List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are some tips to help your business plan stand out:

Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.

Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.

The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.

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A 5-Step Guide to Annual Planning for Your Business

With any luck, you were able to take some time off around the holidays to relax and recharge for the New Year. With time to reflect and decompress, you should be entering your next year of business with a fresh set of eyes and new found energy. Make the most out of this feeling by channeling your energy into annual business planning and give your business the direction and momentum it needs to have its best year yet.

Your business plan doesn’t have to be overly complex, but it does need to be organized and give you the framework to map out your next year of business. When we talk to our customers, we find that many business owners find the following five steps to be helpful and easy to navigate for their planning.

Review and Assess

  • Pull reports that give you a clear picture of your revenue year over year and month over month. Try to spot trends that help you identify activities you tried that worked well for your business, or things that didn’t. Next, take a look at your closest competitor. While you won’t be able to know what their books look like, you can get a feel for their revenue growth by looking at their marketing efforts, facility upgrades, etc.
  • Going through a traditional SWOT analysis is a great way to get a high-level view of your business over the last year that can help you spot obvious next steps and lessons for your annual business planning.

Define Your Purpose: Who are we here for?

  • By identifying your most valuable customers you will learn two things. Firstly, you’ll learn what ‘kind’ of customer is the best fit for your business, which will help you determine your target market and a focus for marketing to similar people that are not yet customers. Secondly, you’ll be able to learn more about your best customers and determine the best way to retain them and brand new customers.
  • Look at this group of “best customers” and determine what they’re buying and when they’re buying. This information will help you create a strategy for how to serve them better with more products or services that meet their needs. This is also a good time to think of different ways to reinforce your relationship with your customers by providing value through helpful information, coupons, or just a nice email message.
  • Think about your most valuable customers, why do you think they are choosing you over your competitor? If you’re not sure, it might be helpful to provide an easy way for your customers to provide feedback into what they like and don’t like about your business, so that you can continue to build on your strengths and learn from your weaknesses.

Outline High-Level Goals

  • To succeed, everyone within your organization needs to understand the underlying mission of your business—for the next year and for the long-term. Starting from the top (you) and down, take an honest look at the priorities each person carries: Do those priorities align with the business’ goals? Is that person working on the most impactful priorities, given their unique set of skills and expertise?
  • What does your business want to be when it grows up? With that clear picture in your mind start to think about the messaging and the offerings of the company you aim to be and weave that into your current activities to start building momentum behind the direction you want to move.

Make a Plan

  • Keep it short and keep it simple. Start with your goals for the upcoming year, figure out what activities need to happen to get to those goals, assign and delegate as a team, making sure everyone understands their priorities and accountability and give your team the autonomy and tools to succeed.
  • When your employees understand and believe in the business’ mission, they will feel a sense of purpose. When they understand how that mission can be achieved, they will feel a sense of direction and focus. Talk to your employees, have candid conversations and take that feedback into consideration in your annual business planning and as you think about the long-term vision of your organization.

Measure Success

  • Your annual plan is the road map for you and your employees for the next year. That road map needs milestones (deadlines, success metrics) that carry your plan forward through a series of smaller goals that lead into your larger goal of where you want your business to end up by the end of the year.
  • While your plan should provide structure, it should also be pliable. Revisit your plan often and make changes when needed. You are the boss of your plan so own it and let it be the tool that helps you feel ‘in control’ and helps drive the success of your business.

Going through the process of creating an annual plan is something that every business owner can benefit from, regardless of the size of the business. If you are a business of one, share your plan with a mentor or someone you respect in your network for feedback. If you are business of many employees, get feedback from your team to create an informed plan that everyone can buy into and get behind.

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Annual Business Planning Template

Written by Dave Lavinsky

Business Annual Plan Template

What is an Annual Business Plan?

An annual business plan is a document that sets out the goals and objectives for a company over the course of a year. It provides a roadmap for how the business will operate and achieve its desired results. A simple business plan template will help guide you in creating a comprehensive annual plan.

Steps to Create an Annual Plan

There are seven steps to creating an annual business plan:

  • Define the company’s overall vision and strategy.
  • Set specific, measurable goals and objectives for the year.
  • Identify the resources needed to achieve these goals.
  • Create a timeline for each goal and objective.
  • Assign responsibility for each goal and objective to specific individuals or teams.
  • Review and revise the plan on a regular basis.
  • Each of these steps is important in creating a well-formulated annual plan. Let’s take a closer look at each one.

Defining the Company’s Overall Vision and Strategy

The first step in creating an annual plan is defining the company’s overall vision and strategy. This involves deciding where the company wants to be in the future and outlining the steps needed to get there. It’s important to be realistic in setting these goals and to make sure they are aligned with the company’s overall strategic vision.

Setting Specific, Measurable Goals and Objectives

Once the company’s overarching vision has been defined, it’s time to set specific, measurable goals and objectives for the year. These should be attainable but challenging and should align with the company’s overall strategy. Each goal should have a target date for completion, as well as a specific metric that will be used to measure progress.

Identifying Resources Needed To Achieve Goals

Next, it’s important to identify the resources needed to achieve these goals. This includes everything from manpower and funding, to office space and equipment. It’s also important to assign responsibility for each goal/objective to specific individuals or teams. This helps ensure that everyone is aware of their role in achieving the desired results.

Creating a Timeline

Once goals have been defined and resources have been identified, it’s time to create a timeline for each one. This will help keep everyone on track throughout the year and ensure that tasks are completed in a timely manner. A Gantt chart can be helpful in organizing this information visually.

Assigning Responsibility

Finally, it’s important to assign responsibility for each goal/objective to specific individuals or teams. This helps ensure that everyone is aware of their role in achieving the desired results. By assigning clear responsibilities, tasks can be delegated efficiently and everyone will know who is responsible for what outcomes.

Reviewing and Revising Plan Regularly

It’s important to review and revise your annual plan on a regular basis. This ensures that the goals are still relevant and achievable and that the resources required are still available. It also allows for any necessary adjustments to be made if something isn’t working as planned. A good rule of thumb is to review the plan quarterly or more often if needed.

Parts of the Annual Strategic Plan Template

There are four key parts to the annual plan template:

1. Vision and Strategy

The first step is to define the company’s overall vision and strategy. This will provide a framework for all of the other steps in the process.

2. Goals and Objectives

The next step is to set specific, measurable goals and objectives for the year. These should be aligned with the company’s vision and strategy.

3. Resources

The third step is to identify the resources needed to achieve the goals and objectives. This includes things like budget, staff, and materials.

4. Timeline

The fourth step is to create a timeline for each goal and objective. This will help ensure that everything is completed on time and within budget.

The Importance of a Well-Formulated Annual Strategic Plan

The importance of a well-formulated annual plan cannot be overstated. It provides a clear roadmap for the company’s operations and sets forth a clear vision for its desired results. Additionally, it helps to ensure that all employees are aware of the company’s goals and objectives and are working towards the same end.

The Difference between an Annual Plan and A Company’s Broader Strategic Vision

The difference between an annual business plan and a company’s strategic vision is that the former is more focused on the specific goals and objectives to be achieved over the course of a year, while the latter is more concerned with the company’s long-term direction. An annual business plan lays out a roadmap for the company’s operations over the course of a year and sets specific targets to be met. A company’s strategic plan, on the other hand, is more concerned with the overall direction of the business and its long-term goals.

Ultimately the difference between an annual plan and a company’s broader strategic vision is that the former is more focused on the specific goals and objectives to be achieved over the course of a year, while the latter is more concerned with the company’s long-term direction.

Best Practices for Annual Planning

There are a few key best practices that businesses should keep in mind when planning their annual operations.  

First and foremost, it is important to be realistic about what can be accomplished in a year. Businesses should establish achievable goals and objectives, and then create a plan of action to achieve them. This includes setting timelines and specific tasks that need to be completed in order to reach the goal. 

Another key element of effective annual planning is creating a budget and sticking to it. Budgets help businesses stay accountable and track progress toward their goals. 

In addition, effective annual planning should always include regular review and course correction as needed. Businesses should routinely assess their progress, make necessary adjustments, and ensure they are still on track to meet their goals.

When it comes to business annual planning, there are a few best practices that can help your organization make the most of the process. Here are a few tips to get you started:

  •  Set realistic goals. It’s important to set realistic goals for your annual planning process – this way, you’re more likely to achieve them. Be honest with yourself about what’s achievable and what’s not, and make sure your team is on the same page.
  • Make a roadmap. Once you’ve set your goals, create a roadmap for how you’ll achieve them. This will help keep everyone on track and ensure that you’re making progress toward your targets.
  • Use data to inform your decisions. When making decisions about your annual planning, use data to inform your decisions. This will help you make informed choices based on evidence rather than intuition alone.
  • Communicate regularly. Make sure to communicate regularly with your team throughout the annual planning process – this will help keep everyone updated on what’s happening and ensure that everyone is working towards the same goal.
  • Celebrate successes along the way. Celebrate successes along the way – this will keep everyone motivated and help ensure that the process is fun as well as productive.

Annual Contingency Plan Example

Sometimes it’s helpful to have a contingency plan or clause in case things don’t go as expected. Below is a sample contingency plan.

“In the event that we are unable to achieve our sales goals for the year, we will implement a number of contingency measures. These measures may include reducing our advertising budget, downsizing our workforce, and suspending operations at certain locations. We will only implement these measures if absolutely necessary and we are confident that they will help us to get back on track.”

Strategic Business Plan Example

Below is an example of a strategic business plan.

“Our long-term goal is to become the leading provider of XYZ products and services in our industry. To achieve this, we will need to increase our market share, expand our operations into new markets, and continue to innovate our product offerings. We are confident that we can achieve these goals and become the industry leader.”

Annual Business Plan Template

Executive summary.

The executive summary is a brief overview of the company’s annual plans while taking into account the company’s broader vision. It should include a description of the company, its products, and services, its marketing and sales strategy, its operations plan, and its financial plan.

Company Overview

The company overview section of the annual planning document should provide a brief history of the company, its mission and vision, and its current status.

Products and Services

This section of the annual plans should describe the company’s products and services in detail. It should also include information on the company’s competitive advantages and any new products or services that will be launched in the coming year.

Marketing Plan

The marketing plan section of the company’s strategy should outline the marketing and sales strategy for the entire organization for the coming year. It should include information on the company’s target market, its branding and positioning strategy, its advertising and promotion budget, and its sales goals.

Operations Plan

The operations plan section of the annual business plan should describe the company’s methods for manufacturing, distribution, and other aspects of its operations. It should also include information on the company’s capacity, its supply chain, and its quality control procedures.

Financial Plan

The financial plan section of the annual business plan should include a summary of the company’s financials, the budgetary approval process, contingency plans, as well as the broader visions and plans for funding and investment.

With regards to financials, you want to include past and projected Income Statements, Balance Sheets, and Cash Flow Statements. Also, if you are seeking external financing, document the amount of funding you need and the key expected uses of these funds.

Annual Goals

When creating your business plan, it’s important to set annual goals and objectives. This will help you track your progress and ensure that you’re on track to reaching your long-term goals. Some things you may want to consider when setting your annual goals include:

  • Increasing revenue
  • Expanding your customer base
  • Improving product or service quality
  • Reducing costs
  • Developing new products or services
  • Enhancing marketing efforts
  • Expanding into new markets

One of the most important aspects of any business plan is setting annual goals. These goals should be attainable, yet ambitious, and should help to guide your business in the right direction. Some things you may want to consider when setting your annual goals include increasing sales, expanding your customer base, improving productivity or efficiency, reducing costs, or developing new products or services. Whatever your goals may be, make sure to document them and track your progress throughout the year. This will help you ensure that you are on track to meeting your targets and achieving success for your business.

The appendix of the annual business plan template should include any supporting documentation that is relevant to the plan, such as market research reports, financial projections, and product specifications.

Every company should have an annual business plan. This document helps you track your progress, set goals, plan forward, and make necessary adjustments throughout the year related to key results. Without a business plan, it is difficult to make informed decisions about where to allocate your resources or measure your success. If you need help getting started, we have a great business planning template that can get you on the right track. By following our simple tips and using our template, you can create a comprehensive business plan that will help ensure your success in the coming year. 

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

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How to create a successful annual business plan

Kaylyn McKenna

Here is what you need to know to create an effective and comprehensive annual plan for your department or company:

What is the purpose of annual planning?

An annual plan acts as a roadmap for your company. Annual planning allows you to go into a new fiscal or calendar year with specific and measurable goals set, budgets finalized, and a plan for how to measure progress on and achieve your company’s organizational and financial goals. Through this process, you develop the vision of where you hope that your company will be at the end of the year and the map of how you will get there.

You can also use annual planning to set goals and plans for individual departments or teams within an organization. Create marketing plans, human resource plans, and more to keep each segment of your business on track, reset your goals, and get your teams aligned towards common goals and initiatives. Since trends, consumer habits, and other factors change frequently, it’s good to create a fresh one-year plan each year.

Annual plans complement strategic planning while providing more short-term (one year) goals that are often tied to financial goals as well as the annual budget. Strategic plans often have more overarching goals that work to advance the company’s mission over three years or longer. Your annual plan will likely include goals that play into these longer-term goals in your company’s strategic plan.

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Evaluating existing and prior year goals

Start your process by evaluating your current starting point. Take time to look back at last year’s annual plan and evaluate whether you achieved your set goals or fell short in certain areas. Attempt to determine why you fell short on specific goals and what steps you could take to prevent a repeat of that issue. This will help you set realistic goals for the new year.

This is also a great time to review your company’s:

Mission statement. This is a statement that describes the purpose of your organization. What does your business do and what does it hope to accomplish?

Core values. These are the principles, beliefs, and values that your organization’s culture is built on. These values shape how you do business, and as such, should shape your annual plan.

Strategic plan. Your strategic plan should detail your business plan and long-term goals while taking market conditions into consideration. Your annual plan should complement your overall strategic plan.

Financial reports. Review the prior year’s budget reconciliation, cash flow statements, and year-end reporting. If you have access to budgets or financial forecasts for the upcoming year, review them now. If not, they’ll need to be created later in the annual planning process.

Keep all of these documents handy, as you may need to reference them as you move through the annual planning process.

Create an updated SWOT analysis

It’s also time to update or create a SWOT Analysis chart for your company. A SWOT analysis is typically depicted as a four-quadrant square with the following quadrants:

Strengths. List out the things that your company already does well and your internal strengths. Perhaps you have a large Instagram following with a strong network of influencers promoting your product. Maybe you have unique branding, patents, or technology that set you apart from competitors. This section is your highlight reel from prior years and can also include strengths like new products or developments being released in the new year.

Weaknesses. Now it’s time to consider what can be improved. List out your company’s internal areas of weakness. A good way to identify weaknesses is to look at customer feedback. Do customers like your product but complain about the processing and delivery times? A weakness can also be staffing-related such as high turnover or taking too long to fill open positions. A common marketing weakness may be lack of media mentions or ranking low in Google search results for your product or business type.

Opportunities. These are external opportunities that you can take advantage of in the coming year. Are there new trends or technologies that could boost the success of your business? Is it time to start marketing your products to Gen Z? Are there changes in government regulations or laws going into effect in 2022 that could have a positive impact on your business?

Threats. Explore potential external threats to your company’s growth and success in the coming year. Maybe the current supply chain problems mean that you will have manufacturing or delivery delays in 2022. There could also be legal changes that negatively impact your business. Threats could also come in the form of major competitors or market saturation. Knowing what may threaten your success will help you build a plan to overcome these challenges, so be thorough with your market analysis.

After creating a company-wide SWOT analysis, consider breaking things down even further and creating a SWOT analysis on specific aspects or segments of your business.

For example, a marketing SWOT chart can help you identify what you need to adjust in your marketing strategy for the new year. Many businesses, especially small businesses, may have strong Facebook and Instagram accounts but weaknesses in the area of SEO. Reaching new audiences and market segments through TikTok may be an opportunity if your business has not jumped onto the platform yet. A new year is a great time to do a SWOT and update your ideal customer or target demographics to evaluate opportunities for expansion.

Goal setting with SMART goals

It’s a good idea to start off the new year by setting goals for your employees, departments, and the company overall. This creates trackable metrics to measure your company’s success at each level throughout the year. The best way to create goals is to use the SMART goal system.

Specific. Aim to make your goals specific and to identify who will be involved in the goal. A general goal would be to increase brand awareness. Specific goals would be growing your LinkedIn following to 10,000, obtaining 10 media mentions, or ranking one the first page of Google results for a specific target keyword. Within each of those specific goals you could identify who is responsible for them; a social media manager, PR or media relations team member, an SEO consultant, or in a small business, it may just be a digital marketing manager. Regardless, it’s helpful to define who is involved and who will oversee progress.

Measurable. Define how you will measure the success of each goal. What metric will you use to track progress towards the goal?

Attainable. Your goals should be realistic. They can be somewhat ambitious, but avoid including stretch goals that are unlikely to be achieved within the year with your anticipated staffing levels, budget, and level of consumer awareness. Of course, start-ups would love to score a major investor or have their company go viral and generate a huge amount of buzz with consumers, but unless you have reason to believe either of those is on the horizon, leave out goals that depend on unrealistic or unpredictable events. Also, leave goals that will take several years for your strategic plan.

Relevant. The goals that you set for this year should be relevant to your company’s vision, mission, and long-term objectives. This is why it’s helpful to start the process by looking at your mission statement, vision, and strategic plan.

Time-bound. All goals should have a clearly defined time frame including a specific deadline date. For annual planning, the timeframe may be one year, or you can break your goals down into monthly or quarterly goals and adjust the deadlines as such.

You’ll likely end up with a decently long list of goals for your company. As mentioned in the Specific criteria, breaking down your goals and defining who is responsible for them is important. Try to create goals that span the major business functions of your company such as product, operations, marketing, HR, and leadership . Set company-wide goals and then break them down by teams and later by individual contributors to ensure that everyone knows what goals they need to accomplish in order to help the business meet its overall yearly goals.

Budgeting and financial considerations

An important aspect of annual planning is financial planning. A good business plan should take financial constraints, budgets, and financial goals into consideration and plan accordingly. If you are a start-up and plan to go through a round of fundraising or have other major changes such as going public with an IPO, include those in your annual planning.

Your annual plan should include financial projections for the year. These projections will help you plan for financing needs, changes in cash flow, and evaluate the best timing for new projects or hiring. You’ll want to create sales forecasts to project your expected income. It’s also wise to forecast your anticipated expenses for things like labor, materials. supplies, and overhead.

You’ll also want to verify that you will be able to allocate the funds needed to accomplish the SMART goals that you created earlier. At this point, you may need to revise some of your goals to ensure that they are achievable within your financial constraints. Those that require a larger budget may need to be scaled down or saved for next year.

Contingency planning

Hopefully everything will go as planned, but it’s always good to have a contingency plan in place in case something goes awry. After all, we’ve all seen how unexpected challenges can derail business operations over the past two years.

Plan for potential emergencies or alternate scenarios. Does your annual business plan rely on covid conditions improving in 2022? Create a contingency plan in case there are more hiccups than expected during reopening or the return to the office.

Consider how your business could best handle supply chain issues, unexpected cash flow problems, and major IT or security concerns. If your headquarters is in an area prone to natural disasters such as wildfires or hurricanes, you should always have a plan in place for the safety of your staff, files, as well as assets that would be difficult to replace.

Putting it all together

There are a number of annual business plan templates available online that you can use to craft your final report. Larger companies often use specialized software for their annual business plan. If you plan to use the goals created during the annual planning process for performance management , a software solution may be best so that department leads and individual employees can track their goals throughout the year.

The report should open with an executive summary, although this is actually the last piece that you’ll typically want to write. The executive summary should act as an introduction to and a summary of the full report. Tailor it to your audience depending on whether the plan will be shared with employees, investors, or others.

A description of the product or services including new products, the team, and the company at present may also be included.

Then comes the meat of the report where you explain the goals you’ve created and your plan for achieving and measuring them. Your full report may be separated into marketing planning, financial planning, HR planning for organizational improvement, and other relevant sub-sections. This is where the zoomed-in SWOT analyses and department-level SMART goals will come in handy.

The report should leave the reader with a clear picture of what you will achieve and how you will do it.

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Annual Planning

Man with laptop developing an annual plan during an annual planning meeting

A strong annual plan builds on the company’s broader strategic vision and core values while still providing specific goals, metrics, and budgets to guide managers and employees. If it’s doing its job, the annual business plan is also flexible enough to adapt to an unpredictable and often volatile market.

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What is annual planning?

An annual business plan is a road map for a company and its employees. It contains milestones that carry the plan forward through a series of smaller goals that lead to a broader vision of where the business aims to be by the end of the year.

When a new year arrives, many people make plans and resolutions for the coming 12 months. They look back at the previous year and consider what worked for them and what they want to improve. Then they plan what goals they want to achieve, from getting out of debt to losing weight to learning a new language. Similarly, a company or organization will use an annual business plan to tighten its belt, improve performance, and reach specific goals over the coming year.

Whether using an annual business plan template or working from scratch, a company will review the expectations and results from the previous year in order to create an annual plan that gives everyone in the organization a sense of where they’re headed and how they will get there.

Why annual planning is important.

An annual business plan empowers workers to set specific business goals based on the company’s overarching strategy, and it also holds teams accountable for achieving stated goals.

The annual plan connects directly to where a company wants to be in 3 to 5 years and defines what’s critical to achieve over the next year to progress toward longer-term targets.

A well-formulated annual plan also keeps the workforce united and focused, energizing them to be more productive.

Additional benefits of an annual business plan include:

  • Providing a stronger connection to the strategic plan
  • Putting the mission of the organization into daily practice
  • Providing workers with a clear sense of direction in their departments or roles

What’s the difference between an annual plan and a strategic plan?

In the strategic planning process , an organization describes or affirms its mission, deciding what it wants to achieve over the next few years (vision) and setting strategic priorities to help make that vision a reality.

The strategic plan works hand in hand with the annual business plan. The former provides an overarching vision of what the company wants to achieve, and the annual plan provides the nuts and bolts of the necessary work to be done over the coming year.

So, the annual business plan depends on the strategy for its priorities, and the strategy depends on the annual plan to execute its ideas about the organization’s vision, mission, purpose, and goals. Logistics, projects, allocation of resources, and timing are covered in the annual plan.

Preparing to create an annual plan.

Before you can look ahead, you need to first look back, take what you’ve learned, and recommit yourself to your company’s values and priorities. Thus, reviewing your old plan and assessing its results against expectations is an important first step.

You should also review your company’s:

  • Mission statement: This is a guiding declaration that describes  what your company does and differentiates you from your competition.
  • Vision statement : This is an aspirational statement about what your company wants to become—an important factor in setting the annual plan’s priorities.
  • Core values: These are the principles, beliefs, and philosophies that shape your company’s culture and support your vision for the future.
  • Financial information, including budgeting: This is important because annual planning is connected to the budgetary approval process for the next fiscal year, including anticipated revenue, expenses, and growth predictions.
  • Key problems and issues: By understanding what went wrong the previous year and the issues it faced, a company can offer remedies in its annual plan to improve future outcomes.

What is included in an annual plan?

There are many annual business plan templates you can use to make your plan. Generally, they contain these elements:

Stated goals (SMART)

Your yearly plan should include both SMART and stretch goals.

SMART (Specific, Measurable, Attainable, Relevant, Time-Bound) goals are an enduring staple of the business world, helping to clarify your ideas, focus your efforts, ensure your time and resources are used productively, and increase your chances of success. Stretch goals, as the name suggests, require above-and-beyond effort and innovation to pull off, with the promise of a greater payoff. Include a mixture of both in your annual plan.

Budget and financials

An annual plan also includes projections for the coming 12 months, forecasting income and outlays. Your projections will help you plan for cash flow dips, pinpoint financing needs, and decide the best timing for projects.

Part of this involves developing monthly financial projections by recording expected income based on sales forecasts and anticipated expenses for labor, supplies, overhead, and so on. It’s wise to prepare a projected income (profit and loss) statement and a balance sheet projection.

You can also use the projections to determine financing needs, if any. Well-prepared projections will make it easier to qualify for a loan.

Timelines and checkpoints

To reach where you want your business to be in a year, take your larger goals and split them up into smaller goals set on specific timelines. As you set your deadlines, include metrics that will indicate how successful you’ve been in achieving your goals.

Clearly outlined expectations and responsibilities

An annual business plan works best if it’s aspirational but achievable, with practical goals that are spelled out in clear language, indicating which individuals, teams, or departments are responsible for which parts of the plan. Given that almost 50% of employees in the United States don’t know what is expected of them at work, a little bit of clarity can go a long way.

Vision for what the business looks like at the end of the year

As much as annual business plans are about the practical implementation of a company’s strategy, it’s also important to keep the organization’s aspirational future vision in mind. Having a clear vision of what successful completion of your annual planning goals looks like increases your chances of success.

Contingency plans

What happens if your company’s cash flow gets into trouble? It’s a good idea to set up emergency financial reservoirs before they’re necessary. Maintaining a cash reserve or keeping room in a line of credit are both good contingency measures. Remember to compare your actual financial results to your projections throughout the year, so you can spot financial problems before they spiral out of control.

Creating an annual plan is easier when you use the right tools. These can include an annual business plan template that organizes planning efforts and a wide variety of software solutions for writing business and strategy plans.

As you execute your annual plan, it’s also a good idea to rely on a work management platform  with strategic planning tools that allow you to collaborate productively, create content, and manage complex processes. Using features like Workfront's Scenario Planner , you can simplify the annual planning process, adapt to market shifts with continuous planning, compare scenarios for risk and effectiveness, and stay ahead of the competition.

Armed with the right tools, plans, and processes, you can create a well-conceived and executed annual business plan that ensures the year ahead lives up to your expectations.

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Annual Planning: Why Is It So Important?

On a personal level, planning is an essential aspect of everyday life. And when it comes to companies, whether small or large, planning is equally essential. Annual planning is one of the most important activities that companies do every year because it provides an opportunity to set the overall direction of a company by discussing goals, metrics, budget, and performance.  

annual business plan is usually signed off by which month

What Is Annual Planning?

Annual planning can be defined as the process of defining a business roadmap for your company and your employees. It can also be seen as an organization's financial plan for the year, and it is comprised of a series of milestones that help to carry the plan forward through several tasks that lead to a broader vision of where the company aims to be by the end of the year. 

Companies must hold planning sessions to review last year’s performance, as well as specific goals and achievements. These sessions will help to analyze expectations and results from the previous year in order to create an annual plan that gives everyone in the organization a sense of where they’re headed, and where they want to be twelve months from now. 

Is Annual Planning the Same as Strategic Planning?

Strategic planning is about establishing goals to sustain the company’s vision. Is about creating a strategy where the end product is a long-term plan that includes identifying goals, as well as mapping out how exactly those goals will be met. The process of strategic planning involves choosing a methodology, assessing resources, and receiving feedback from both external and internal stakeholders. A strategic plan can also be implemented during the course of years, and not necessarily within one business year. 

To put it simply, the strategic plan will identify the framework for a company to advance on its mission. The annual plan can include goals directly related to the strategic plan but it is largely connected to the budgetary approval process for the next business year, and as such, annual planning is usually conducted by leadership or directors. 

Why Is Annual Planning Important?

A well-formulated annual plan is an opportunity to set the overall direction for your company. It can also help to empower the team by providing a sense of direction. Let’s take a look at the most relevant benefits of annual planning:

  • Annual planning generates efficiency because it circles around performance.
  • It helps to define what is critical to achieving over the year.
  • It delivers clear leadership to employees and it helps to keep the workforce united.
  • Employees gain a clear sense of direction in their departments and roles. 
  • An annual plan can rally an entire organization around goals. It can also provide a stronger connection to the company’s strategic plan.

What Is Included in an Annual Plan?

Generally, an annual plan will contain the following elements:

Goals. Before you can look forward it’s important to look back. For this, it’s a great idea to review your SMART (Specific, Measurable, Attainable, Relevant, Time-Bound) goals, they can help to clarify ideas, focus efforts and ensure resources are being used in the most productive manner. Remember, your annual plan should also hold a strong connection to your company’s strategic goals.

Budget. Financial elements are key to annual planning, so it’s important to take into consideration projections for the upcoming 12 months. These projections will help you plan resources, cash flow, and decide the best course of action and timing for individual projects. 

Expectations, responsibilities, and clear OKRs. Goals need to be clearly specified, indicating which teams, individuals, or departments will be responsible for carrying out tasks. Expectations must be exceptionally clear for collaborators. Also, working with well-defined OKRs can help to keep teams on track because they help to provide visibility into what other teams and individuals are working on. It’s all about maintaining the workforce motivated and crystal clear regarding who’s in charge of what. 

Timelines. When measuring performance it’s important to understand how successful your company has been in terms of achieving goals within their deadlines. Split your goals into tasks and set deadlines. 

Contingency plans. A well-formulated annual plan will also consider emergencies. It’s always a good idea to think of alternate scenarios, such as what would happen if suddenly your cash flow would become compromised? 

Values and mission. It’s also instrumental to keep your company’s aspirational future vision in mind when working on your annual plan. 

Annual Planning: 

When it comes to managing annual plans and strategic plans , you need to be on top of everything. A strong annual planning strategy can help to build a company’s broader strategic vision and to set the overall direction of a business roadmap for the next 12 months. However, as you may already know, this process entails keeping track of critical information. This can be an exhausting and difficult process, but it gets easier when you use the right tools. 

Project management software can be a powerful ally for project managers. Instagantt , for instance, allows you to keep information centralized. You can quickly store, update, share, access, and review important company-related information , all in one single place. With gantt charts , you can keep track of your budget and streamline your business plan, making sure you and your team stay on track. Moreover, you can use the same tool to keep track of your strategic and your annual plans, which will help to increase transparency across the organization, keeping track of the key results you’re trying to achieve, and visualizing progress and performance at all times. With the right tools and processes, you can create and execute a strong annual strategy.

Annual Planning Example

Template: Annual Planning Example

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How To Create an Annual Operating Plan for Your SaaS Business

Annual planning season can be rough for executives, finance leaders, and department heads alike. But the companies that effectively generate a solid annual operating plan set themselves up to hit their goals and provide a clear roadmap for the year ahead. Learn how to build an AOP that checks all the boxes.

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Carly Miller

Content Marketing Writer

A Guide to the Strategic Budgeting Process in SaaS

Guide to rolling budgets: how to, pros & cons, examples, top-line vs. bottom-line growth: how to analyze and improve each, never miss new content.

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Business planning can be a painful process for all involved. But getting rid of it isn’t an option. A rigorous annual operating plan is what will help you maximize efficiency across the business and allocate resources to hit company goals.

Don’t spend year after year dreading each step of the process of building your business plans. Here, we’ll cover the key concepts and steps you need to know to optimize your processes and create an annual operating plan that drives value for your organization.

Table of Contents

What Is an Annual Operating Plan?

An annual operating plan (AOP) is a strategic document that a company prepares to chart its course for the upcoming year. This AOP encompasses key performance indicators (KPIs), operating budgets, and action plans designed to meet both short-term and long-term objectives. Through the annual operating plan, businesses can pinpoint and allocate their resources efficiently, ensuring they’re on track to achieve their set milestones.

Benefits of Annual Operating Plans

As a part of strategic planning, an annual operating plan ensures that all employees understand their responsibilities and can coordinate their efforts to complete your business objectives.

It enables managers to track progress and determine whether they’ll hit company milestones on time. As a result, managers can request any needed funding from the CFO ahead of time.

Here are more benefits of annual operating plans:

Make Department Plans and Strategies More Data-Driven

A data-driven approach keeps the plans and strategies of various departments more outcome-oriented by drilling down to the impact of costs per head, per month, or per vendor.

Such an approach improves the accuracy and flexibility of your SaaS revenue forecasting  by aligning revenue and expense forecasts with the primary levers for your SaaS business.

Align Cross-Functional Departments With Business Goals

Align Cross-Functional Departments With Business Goals Business leaders can curate job roles and department goals based on what’s outlined in the annual operating plan to ensure their team members align with key company objectives.

Help Highlight Potential Need for Fundraising or Spending Re-Evaluation

An annual operating plan can help you have more granular conversations with stakeholders or business owners about how changes in spending could improve performance as market and business conditions shift throughout the year.

Give Departments a Guidepost for Tracking Performance and Goals

An excellent AOP will help various departments track their progress and ensure they take the necessary initiatives to achieve company objectives throughout the fiscal year.

How To Create an Annual Operating Plan

The complexity and maturity of your company will determine the details of your annual planning process. But in general, aim to start the planning process about a third of the way through your Q4 and finish it within six weeks. This ensures decision-making is streamlined and goals are achievable.

Here are the recommended steps:

1. Organize Department-Level Data in the Main Financial Model

Creating an annual operating plan starts with categorizing data from your company to understand the previous year’s performance trends. These insights are the foundation for the rest of your planning process and will help you create a detailed plan.

Your goal in this phase is to clearly understand what teams are spending money on and find consistent and inconsistent spending across general ledger accounts.

For example, if your marketers used LinkedIn  ads  as a primary channel throughout the previous year, you might anticipate they’ll increase LinkedIn ad spending in the new year.

You can also find significant one-time expenses across departments and look for opportunities to limit these expenses to improve cash flow.

You can then use these insights to develop questions for departmental meetings.

2. Get a Read on Department-Level Plans

This is the most collaborative — and perhaps most important — part of the annual planning process. The ability to connect with department leaders, understand their needs, and contribute to their plans will enhance the effectiveness of your AOP.

The needs of the marketing, human resources, sales, and product departments differ from those of the finance department. So, communicate with their leaders to learn what they care about most rather than handing over dense spreadsheets outlining the financial plan.

Focus your conversations on past performance compared to your plans. Alternatively, you can create high-level strategic budgets and establish goals to achieve them if you don’t have historical data.

3. Translate Department Budgets to the Main Model and Scenarios

In the previous step, you worked with department leaders to understand their needs and strategies. As a result, you should have worked through various department-level scenarios by this point.

One scenario could be: What if we hire another 30 people in the production department? Is the ROI  of new product releases worth the cash impact?

Another scenario you could consider: What if we doubled our marketing acquisition budget? What effect would this have on pipeline generation?

When you translate the department-level discussions to the primary model, you must also run what-if scenarios for the whole organization.

Having a CEO and a CFO with a good relationship can make all the difference when creating an AOP, and running these scenarios will let CFOs have a more strategic conversation with the CEO about how to handle different aspects of the current economic environment.

The models will show how different fundraising scenarios, revenue forecasting , and headcount plans affect your cash flow, runway, and burn rate.

4. Align With the CEO for Company and Board Approval

At this stage, you’ll present fully fleshed-out scenarios and plans from the third step to finalize things for the CEO  and board.

However, due to market uncertainty, you may spend more time with your CEO working out scenarios and model assumptions to determine the best path forward.

As a result, you may want to give yourself plenty of time to adjust your plans based on your CEO’s recommendations and comments.

Then, the CEO can sign off on the plans and approve the various scenarios you’ll present to the board.

5. Reforecast Throughout the Year To Keep the Plan Fresh

The value of an annual operating plan is in the process itself. You must keep it fresh monthly and quarterly. So, update your models to reflect new context about the business and macroeconomic environment.

Also, compare rolling forecasts  to the original annual plan. This comparison lets you revisit the plan with the most recent actuals and adjust based on business performance and macroeconomic conditions.

Download this blueprint and complete guide to nailing your annual planning process.

Why saas startups need to go beyond annual operating plans.

As you create your AOP for 2023, market uncertainty is forcing you to be more adaptable and agile. So, prioritize automation and data integration to address evolving business needs. You’ll need an overarching framework for centralizing, processing, and analyzing financial statements and other financial data.

You need a framework to pull all financial data  from your organization and map it into a common ontology, saving 80% of the time you typically spend cleaning data from individual record systems.

Financial tools like Mosaic provide this framework, eliminating the need to rely on engineers to develop a data architecture to support your agile planning.

How Mosaic Enables Business Growth

Mosaic provides a Strategic Finance Platform  that serves as the connective tissue for your small business. It automates financial data integration and empowers you to add more strategic value to the planning process.

Plus, the 125+ SaaS metrics make monitoring your business’s growth simple.

Want to learn more about how Mosaic makes the typical high-stress top-line planning process easier for SaaS startups? Reach out for a personalized demo  and find out how you can easily create your annual operations plan.

Annual Operating Plan FAQs

What should be included in an annual operating plan.

An annual operating plan should be a concise overview of the entire company’s strategic and tactical plans for the year ahead. This should include:

  • A narrative of strategic context to go along with the proposed annual budget
  • An explanation of the current and planning organizational structure to support strategic initiatives
  • A clear outline of quantitative company goals and OKRs
  • The breakdown of departmental metrics that you’ll use to track progress

What is the difference between annual operating plans and budgets?

An AOP and a budget both address your financial structure, but they have some differences.

The differentiator is that the annual operating plan is like a document or deck that outlines overarching goals and departmental focuses. In contrast, the budget is much more numbers-driven and includes revenue goals, financial assumptions , and expense forecasts.

What is the objective of an annual operating plan?

When creating an annual operating plan the objective is to tie together forecasts, budgets and plans (including their accompanying goals and KPIs) from different departments into a single cohesive overarching plan for the company. Annual operating plans help departments align around company objectives and give each department achievable goals to work towards.

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Glenn Smith Executive Coaching

Annual Business Plan: 7 Key Processes

Your annual business growth plan is critical to the consistent, healthy growth of your business. I hope you will overcome the barriers and go into the new year with a solid growth plan.

I have already identified the 3 Parts of an Annual Business Growth Plan . They are Your Marketing Plan (with a particular focus on your Marketing Calendar), Your Budget (or Financial Plan), and Your Organizational Improvement Plan. Here I want to look more closely at Your Organizational Improvement Plan.

There are 7 key business processes that should be evaluated every year. These 7 key processes are

  • Operations and Customer fulfillment
  • Customer Service
  • Admin/Back Office

Big Picture SWOT Analysis

I recommend that you create a high level S.W.O.T. chart to analyze where you are right now. Create a 4 quadrant grid, one for each of your S.W.O.T. topics. Here is what I mean by S.W.O.T.:

  • Strengths – These are your current or past year’s internal areas of strength.
  • Weaknesses – These are your current or past year’s internal areas of weakness that need to be improved.
  • Opportunities – These are external possibilities that you see for the coming year.
  • Threats – These are potential external threats to your growth and success in the coming year.

Once you create your grid, write each of the seven key processes in one or more boxes. This will give you a high-level analysis of your entire business. So my high-level S.W.O.T. chart looks something like this right now:

annual business plan is usually signed off by which month

Bring it Down to the Key Processes

Once you complete this high-level S.W.O.T. analysis, take it down to each of the seven key processes. Create a S.W.O.T. chart for each of the seven areas starting with Leadership. You may want to include your staff for feedback and brainstorming. For Leadership, consider the following:

  • Leadership – vision clarity, communication of direction, overall business strategy, clearly defined goals, and good accountability structures.

So my Leadership S.W.O.T. chart looks something like this right now:

SWOT Leadership Analysis_Annual Business Plan 7 Key Processes

Now do the same with the other key processes. You can break them down this way, but feel free to add components to each of these:

  • Management – effective systems, documented systems, process improvement systems, comprehensive operations manual , efficient dashboards
  • Marketing – effective referral strategy , building a strong brand, direct response advertising/tactics, relationship management, PR strategies, leveraging the internet, leveraging social media
  • Selling – documented sales process, strong scripts and selling questions , plan for handling objections, making it easy for customers to buy, closing effectiveness, training.
  • Operations/Customer Fulfillment – documented processes, efficiency , quality control, safety, expense control
  • Customer Service – relationship management, quick response, building loyalty, reviews & testimonials , customer satisfaction
  • Admin/Back Office – accounting, reporting, finances, data management, inventory control, technology, infrastructure, technology

Set Some Goals

Once you analyze the seven key processes, set some goals for the coming year. You may want to set 2 or 3 goals for each area or 5-7 overall goals. However, you approach this, be sure to write specific, measurable goal statements and share them with your team. If possible, assign a “Champion” to each goal.

After you write your goals, determine the specific steps you will need to take to achieve each goal. Assign a deadline for each action step and assign a person responsible for each step. Once you finished, you have completed your Organizational Improvement Plan.

Be sure to review all 3 of the annual plan components , Your Marketing Plan, Your Budget, and Your Organizational Improvement Plan, to make sure they are all in alignment. Plan a time to review this once a week or once a month. Now, take action and watch your business grow!

Glenn Smith

Glenn Smith

Glenn Smith is a sought-after Executive Coach with over two decades of experience. Recognized for his strategic insights and leadership training, Glenn has been a guiding force for more than a hundred successful small to mid-sized businesses. Merging data-driven strategies with profound insights into human behavior, he aids business owners and executives in realizing their fullest potential. A respected thought leader, Glenn has contributed to numerous business publications and is a popular keynote speaker. Outside his professional realm, Glenn cherishes family time and outdoor activities. He is a pilot with over 30 years of flight experience. He is also a professionally trained gunsmith and a firearms instructor. His dedication to fostering leadership and driving transformative change marks him as a premier figure in executive coaching.

LinkedIn : www.linkedin.com/in/houstonbusinesscoach/

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Annual Planning: Plan Like a Pro In 5 Steps (+ Template)

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Get ready to take your strategic annual planning game to the next level! This process is essential for companies who want to set a clear direction for the future and ensure everyone is working towards the same goal. 

But, let's be real, executing a killer strategic plan is easier said than done. That's why we're here to help you. 

In this article, we'll dive into the nitty-gritty of annual planning and cover all the tips and tricks you need to know. From involving the right people to communicating your plan like a pro, we've got you covered. 

We'll also share some common pitfalls to watch out for and provide real-life examples to help bring it all to life. 

So, whether you're a seasoned planning pro or just starting out, get ready to learn how to make your annual strategic planning a total success!

In this article, you’ll discover:

What Is Annual Planning?

  • The Benefits of The Annual Planning Process

5 Steps To Build A Highly Effective Annual Plan

The only annual planning template you need in 2023.

  • 7 Mistakes to Avoid When Conducting Annual Strategic Planning

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Annual planning is about turning long-term business goals into short-term action plans for the year ahead. It contains insights from past performance and a clear roadmap with a timeline. This yearly plan should be realistic and achievable, while also being ambitious enough to move the business forward.

Annual planning is your opportunity to take the previous year’s wins, knocks, and lessons and adjust your strategy to help your business grow consistently and become better.

Boilerplate definition aside, imagine if IBM still focused on building business-centric PCs, BMW still only made airplane engines, or Tata focused on producing steel. They wouldn’t be the companies they are today.

Annual planning and regular reviews help you proactively adapt to changes and steer your organization in the right direction to get the business results you want by the end of the year or toward your vision in the future.

The Benefits Of The Annual Planning Process

Whether it’s your IT, supply chain , pricing, marketing, operations , or sales strategy—improving, pivoting, or optimizing your annual planning approach from one year to the next year is non-negotiable. The annual planning process will help you assess the effectiveness of your business strategies and make adjustments to keep up with customer needs and market trends.

An effective annual planning process for the new year can offer:

  • Strategic clarity: Annual strategic planning helps define and align goals, mission, and values, leading to more focused and effective decision-making across all levels of the organization. This in turn sets a clear and consistent direction for future initiatives, maximizing the organization's potential to achieve success.
  • Focus: By regularly reviewing and updating its strategic plan , your organization stays focused on long-term objectives instead of being constantly sidetracked by day-to-day operations.
  • Benchmark performance: An annual strategic planning process helps you measure and track progress on key strategic initiatives , and evaluate the progress made compared to last year.
  • Gaps and opportunities: By regularly reviewing your strategic plan, your teams will identify gaps and opportunities for improvement and innovation, which can help you stay ahead of your competition.
  • Resource allocation: By aligning your strategic plan with your budget, you can allocate resources that will support your goals and cut costs from misaligned initiatives.
  • Engagement and buy-in: Involving key stakeholders in the strategic planning process will increase engagement and buy-in across your organization, leading to a more cohesive and motivated team.

A clear and execution-ready annual plan that focuses on the big picture and pays attention to the details can be the glue that binds your teams together. And this is crucial if you want to reach this year’s goals with greater speed and efficiency. Plus, it’s much better than the alternative of just winging it and hoping for the best!

📚 Recommended read: How To Create An Effective Annual Operating Plan (+Template)

Don’t get us wrong—creating and managing a yearly planning process can be a daunting task. But, with the right approach, you'll be able to get it right and start executing faster. Here's how to do annual planning the right way:

1. Analyze your performance and identify opportunities

Before you set goals , you should do an analysis of your company's current performance, market, and competitors to see where you stand. 

Here are some tools you can use in the process: 

  • SWOT analysis
  • PESTLE analysis
  • Porter’s Five Forces
  • Competitive analysis 
  • Financial performance of the previous year
  • Gap analysis  

A better understanding of your current performance can help you make data-driven decisions in the next steps of the planning process. 

Want to make it fail-proof? Don’t forget to include key stakeholders who will be involved in the day-to-day execution of your annual plan. 

Here’s who should be included in the analysis process: 

  • Executive leadership: They are responsible for setting the overall direction and strategy for the organization.
  • Department heads and team leaders: They can offer insights into team capabilities and resources. They can provide insight into the specific needs and challenges of their teams and ensure that their operational plans align with the annual plan.
  • Employees: Employees often have valuable insights and ideas that can help improve the plan. By involving them in the planning process, you can tap into this wealth of knowledge and potentially identify new opportunities or challenges that may not have been considered otherwise.
  • Customers: Customer feedback is critical to understanding the needs and priorities of the target market.
  • Suppliers and partners: Depending on the nature of the business, it may be beneficial to involve suppliers and partners in the strategic planning process. They can provide valuable insights into industry trends and potential challenges. 

👉Bonus tip: Don't let analysis paralysis slow you down! Set a timeline, prioritize data, make informed decisions, and don't overthink it. Move into the execution phase as fast as possible. Adapt later.

2. Formulate your strategy 

The data and insights from Step 1 should inform the formulation of your strategy for the coming year. At this point, you should have a clear sense of direction and objectives that your company wants to achieve in the coming year. 

💡 To identify and formulate your strategy, consider the following questions with your team:

  • What is the business problem that we are trying to solve?
  • What are our core strategic objectives , and how will we measure success?
  • What are our key strategic initiatives, and how will we prioritize them?
  • What are our key performance indicators , and how will we track progress?
  • Are there potential risks , and how will we mitigate them?
  • What resources will we need, and how do we allocate them?

Answering these questions will help you test the validity of your strategy and identify any potential gaps or risks that need to be addressed. In this way, you'll build a solid foundation for your annual plan and increase the chances of its successful execution.

3. Build your annual plan

Next, you’ll need to turn your strategy into a detailed roadmap that outlines the steps you’ll take to achieve your annual strategic objectives and goals. 

It’s like taking a map from a broad view of the journey to a more detailed look that zooms in on the roads and landmarks you’ll need to follow to reach your destination.

📝Your annual plan should include the following:

  • 🔎 Focus areas: The specific areas of the company or its operations that need improvement.
  • 📌Goals and objectives: Specific outcomes the company wants to achieve in its yearly plan. 
  • 📈Measures: Deliverables and KPIs to track progress toward your company’s goals and objectives.
  • 📤Actions: Specific actions or projects to achieve goals and objectives.
  • 😎Owners: Individuals or teams responsible for implementing the actions.
  • 📆Due dates: Specific deadlines and milestones throughout the year.
  • 💰Budget: Allocating the resources to achieve goals and objectives.

👉Here’s how Cascade can help you:  

Cascade’s strategic planning feature gives your annual planning process a standardized and structured approach that includes all the key elements for success. It helps you set high-level annual goals, break them down into smaller initiatives, and assign owners to drive accountability.

4. Create tight alignment with your teams

If the leadership team’s job is to set high-level company priorities to frame key strategic initiatives, then it’s up to specific business functions or teams to chart out the path to reach those strategic goals .

The first step in ensuring strategic alignment is to clearly communicate the plan to all employees. This can be done through regular meetings, company-wide presentations, and other forms of communication, such as a central location for your annual plan that is easily accessible to your stakeholders.

The key is to make sure that everyone understands the goals and objectives of the plan and how their work fits into the bigger picture.

With Cascade , you can link your annual strategic plan to individual departmental or team plans in a single source of truth. As a result, it's easier to ensure that everyone in the organization is aligned with the goals and objectives and monitor the progress being made toward those goals.

alignment cascade (1)

An example of the Cascade alignment view is where you can see how each plan aligns with the company's annual plan and drill down to evaluate performance.

5. Monitor progress and adjust your plan

Gone are the days of static, set-in-stone strategic plans! It's time to embrace flexibility and be willing to make changes as needed. Your annual plan is a flexible, dynamic roadmap that should be adjusted as circumstances change or new information becomes available. The key is to stay focused on your goals and objectives, and be ready to pivot when needed .

Here are some steps that you can take to monitor the annual plan and adapt as needed:

  • Set up a system for tracking progress: This can be done using a variety of tools, including spreadsheets, strategy reports , strategic planning software , or status reports . 
  • Establish regular review meetings: These meetings can be weekly, monthly, or quarterly, depending on the needs of your organization. The key is to make sure that progress is regularly reviewed and that any issues are identified and addressed in a timely manner.
  • Monitor key metrics: Track the most important KPIs that will help you quickly catch underperforming areas and evaluate the success of your annual plan and business strategies. 

If you want to be a savvy business leader, you need to always be monitoring progress, the business environment, and adjusting your plans accordingly. So, let's ditch the rigidity and embrace the flexibility of modern strategic planning and strategy execution! 

With Cascade’s powerful data visualization, you can connect multiple data sources from spreadsheets, project management tools, or business intelligence tools in a single place. You'll be able to uncover powerful insights and deliver accurate reports to help stakeholders make better decisions.

Plus, Cascade's drill-down capabilities allow you to easily explore and interact with your data to gain deeper insights in real time.

Ready for some serious annual planning made easy-peasy? We've got just the thing for you—our annual planning template ! This bad boy is like your own personal planning sidekick, packed with all the goodies you need to align your teams, monitor performance, and rock this year.

Think of it as a one-stop shop for all your annual planning needs. It’s pre-filled with examples that can guide you through the planning process, or you can customize it with your own information.

2023 strategy plan template

It’s a great alternative if you want to get out of messy and ineffective spreadsheets. Plus, it's got a super simple layout, so you won't be bogged down by a bunch of unnecessary features. This template can help, regardless of whether you work at a startup or an enterprise-sized company. And no matter the industry you’re in. 

Don't believe us? Give it a try! We guarantee it'll make your annual planning process a whole lot smoother and its execution a whole lot faster. So what are you waiting for? 

Sign up for a free forever plan with Cascade, add the annual planning template to your profile, and level up your game. It’s that simple. 

👉 Click here to get instant access to your annual planning template.

7 Mistakes To Avoid When Conducting Annual Strategic Planning

Alright, before you dive deep into your yearly planning session, let's talk about the elephant in the room: planning and execution mistakes . In this section, we're diving into some of the most common blunders made during the annual planning process, so you can dodge them like a boss. 

  • Lack of stakeholder engagement: Failing to involve critical stakeholders in the planning process can lead to a siloed plan that doesn’t align with the organization's capacities, needs, and priorities. 
  • Unrealistic goals: Be sure your planning is grounded in your situation's realities and consider your organization's resources, skills, and timelines. This is why it’s crucial that you consult with various stakeholders when planning and executing your strategy. If you need a goal-setting framework, you can check OKRs (Objectives and Key Results). Or take a look at these 5 best strategic planning models to help you set SMART goals. 
  • Lack of flexibility: View your plan as a flexible roadmap, not a rigid set of rules, and be prepared to adapt as the business environment changes. The “perfect plan” doesn’t exist. As 76% of corporate strategy leaders report significant pivots in strategic plans happening more frequently, you need to be ready to expect the unexpected. 
  • Lack of resources: An annual plan that doesn’t consider your team member’s knowledge and skill sets won't result in tangible outcomes. Additionally, ensure that your business has the necessary resources and that your annual plan won’t cause a cash flow crunch.
  • Inadequate communication: Clear and transparent communication is crucial for success, so communicate plans to all stakeholders and ensure they understand the goals and how they fit into the organization's overall strategy.
  • Lack of follow-through: Nobody wins if your teams aren’t hitting goals, and your strategy is just a document collecting dust. According to Cascade’s Strategy Report , less than 20% of team members review progress weekly. Set up regular progress reviews and take corrective actions as needed. Ignore this pitfall, and you’ll set your strategy up for failure.
  • Misalignment between business strategy and team goals: Strategy execution is a team sport, and everyone needs to be on the same page. Share annual business goals with your team leaders and their team members. Let them set their team goals independently, give them feedback, and ensure buy-in early on.

Ready to tackle your annual planning with confidence? 

Remember, the key to success is having a clear plan in a single source of truth, organization-wide alignment, and being flexible enough to adapt when necessary.

And as a final reminder, don't forget to check out our annual planning template! It's the perfect tool to help you structure your plan, get your teams aligned with your strategic priorities, and keep track of your progress so you can adapt quickly if needed. 

So don't miss out, book a demo with one of our strategy experts or sign up today for free , and let's get started!

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Annual Business Planning Checklist

Annual business planning is one of the most important things that a business owner or CEO must do. It sets the strategy, the goals and determines the tactics for the following year.

Of course, there is a lot to consider in terms of where your business has been and where you are headed. It’s important to be organized and stay focused because how you plan often sets the tone for your business. Here are 7 key steps for an efficient planning process.

What Is an Annual Business Plan?

An annual business plan outlines a company’s goals, objectives, and strategies for the upcoming year. It includes detailed information on sales projections, marketing plans, and resource allocation.

The annual business planning process ensures that a company is well-prepared to meet its upcoming goals and objectives, as it provides a structured approach to setting priorities, identifying potential risks and opportunities, and developing actionable strategies for success.

The annual business plan serves as a blueprint for the company’s operations and is regularly reviewed and updated throughout the year to ensure that it remains aligned with the company’s goals and objectives.

Ultimately, the annual business planning process helps companies achieve long-term growth and success in an efficient, organized manner.

1. REVIEW YOUR MISSION AND VISION STATEMENTS.

Are both still applicable? Are they in sync? Are you still passionate about both? It’s a good time to review them, if you aren’t already doing so regularly. Make sure both still provide the overarching reasons that your business exists.

If either one of these has changed, consider them seriously and update as necessary (ensuring appropriate buy-in from you team). Ensure that you feel 100% about your mission and vision before you begin anything else.

2. DETERMINE THE REVENUE GOAL.

Your top-line revenue goal should be high-level and where you see the business going for the year. It’s also strategic. For example, consider the market, the current state of the business and your personal goals. Do you believe that you should grow your revenue by 5%, 15% or even 50%? Or do you believe that revenues will be flat given the current market conditions and/or your desire to focus on profitability over growth.

All are reasonable decisions, but each one will dictate different planning decisions. For instance, how many people do you need to hire, what infrastructure investments need to be made, and how scalable are your support systems? You can start to visualize this plan at a very high level by creating an expected and ideal business model.

Now it’s time to start to thinking through if the ideal business model is attainable next year or if next year should be an interim step towards this future goal.

3. REVIEW AND UPDATE YOUR ORGANIZATIONAL CHART.

First, review your current organizational chart, identifying current and future gaps and needs. Make notes of new positions needed to attain your revenue projections or other organization needs. Make any updates to the roles and responsibilities for current positions.

It’s possible to have employees with more than one role. But, consider if it would be beneficial for more than one person to cover those responsibilities. Move people and roles around as needed until you come to a structure that feels right. At this point, you should have a sense of the number of people you will need to execute on your plan (note for many businesses this will likely only be necessary to the department head level).

4. BUDGETING AND FINANCIAL PLANNING.

This is where your Excel skills (or maybe someone the Excel skills of someone you trust) come into play. The goal is to put all this information into numbers. Build in your key assumptions to generate the revenue you are planning. Add in the expenses needed to support this. Look at your current YTD numbers and go through it line-by-line.

Think about hiring and how much people are going to cost. Look at things from both a top down and bottoms up standpoint. Ask yourself if your top-line goal is reasonable based on initial calculations. See if your bottom-line is also reasonable and where adjustments need to be made. Go back and forth. Ideally, your budget guru will be able to model this through your balance sheet and cash flow forecast, in addition to the income statement, to ensure that cash needs are being considered.

5. CREATE A SALES PLAN AND QUOTAS.

Once you have established you plan and budget, there is typically one final check. Is the plan reasonable from a sales standpoint? Are bookings goals and quotas reasonable based on people and territory? What does your pipeline need to be? How about your close ratio? How does that compare to this year? The sales plan and quota assessment are the final pieces for most companies before you can feel that the overall plan is realistic.

6. GET MANAGEMENT TEAM BUY IN.

Once your executive team has bought into your plan for the coming year (we’re assuming they have been a part of the steps above), make sure you share it with your key managers. Allow the opportunity for questions and tweaks. Generally, though, it’s not productive to allow discussions and changes on everything. Listen, assess their feedback, and tweak as necessary. Then it is time to share with all employees.

This is a chance to get everyone excited about the next year and ensure that you are all moving in the right direction. Your business should function as a team where everyone does their job to the best of their ability. With the right plan and the right team in place, you have a much greater chance of reaching the goals you’ve set for the business.

7. CREATE DEPARTMENTAL KEY PERFORMANCE INDICATORS (KPIS).

It’s time to figure out what you’re going to hold each department in your business accountable for. KPIs start at the top with the executives and then are established for each department. If it makes sense for your business, your department heads can establish KPIs with those who report to them as well. Generally, there should be 3-5 KPIs per department.

These KPIs are not necessarily financial either. But they should be SMART (Specific, Measurable, Attainable, Realistic and Timely). For example, your Human Resources KPI might be your employee retention is greater than 85%. Most importantly, this is not a to-do list of every project for the department in the coming year. Your KPIs are the key things that you think will allow the business to succeed in the coming year.

A few other reminders specifically for calendar year end planning:

  • Think personal tax planning. Planning tactics will differ based on each individual tax situation, business entity type, state of residence, etc., but there are few general tactics to remember including: Consider funding retirement accounts, ensuring all flex spending plans have been fully utilized, making any state /local tax payments in December, ensuring federal tax payments are made by January 15th, accelerating expenses or deferring revenue.
  • If your company is funding your personal tax payments, ensure that there is cash on hand to fund these distributions and you make these with time to meet the estimated tax deadlines.
  • Consider and plan for year-end bonuses for key employees.
  • Prepare to issue 1099s in January. The filing requirement is quick so ensuring you have everything on file and compiled is important.
  • Remember to forecast and monitor cash flow closely during the few months around year end. Typically, there are some seasonal spikes and dips at this time for many companies. And often new expenses are incurred during the beginning of the year. Plan for and monitor this extra closely via a detailed 13-week cash flow forecast.

What Is Included in an Annual Business Plan?

An annual business plan typically includes a range of information that helps guide the company’s operations and ensure its success. The business plan checklist generally includes details such as market analysis, sales projections, marketing plans, product development plans, financial projections, and risk assessment.

The business annual planning process may also  include a review of the previous year’s performance, an analysis of the competition, and customer feedback. The annual business planning process provides a framework for success by helping companies prioritize their goals and identify opportunities for growth.

Why Annual Business Planning Is Important

Annual business planning is important for businesses because it provides a structured approach to setting priorities and developing sales forecasting. If you’re wondering why is sales forecasting important , it is a critical aspect of setting realistic goals and objectives.

By considering historical sales data, market trends, and customer behavior, businesses can develop comprehensive sales projections. Annual business planning enables companies to review and update their strategies in response to evolving market conditions.

Best Practices for Annual Business Planning

Annual business planning is a critical process for businesses looking to increase profitability . It’s important to set realistic and measurable goals that align with your overall business strategy so that you can track your progress over time.

When establishing your annual business plan, you should conduct a thorough analysis of market trends. You’ll likely need to review and update your annual business plan over time to ensure that your strategies are as effective as possible. As time progresses, monitor key metrics such as revenue, profit margin, and customer acquisition cost and adjust your plans accordingly.

How TGG Can Help

Our financial experts at TGG are committed to helping business thrive and realize their greatest potential. We are here to help you establish an annual business plan that aligns with your company’s ultimate goals.

The TGG team proudly serves businesses by establishing an initial annual business plan and by assisting clients with modifying the plan as market conditions change. Get in touch with our accounting experts today to bring your financial planning to the next level with a comprehensive annual business plan.

This post was reviewed by our team of accounting and financial experts . TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.

This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.

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Tim Berry

Planning, Startups, Stories

Tim berry on business planning, starting and growing your business, and having a life in the meantime., business plan financials: how many months and years.

Do complete business plan financials include three years of monthly financial projections? Five years? One year? Obviously the answer to this frequently asked business plan financials question depends on the specific context. Sometimes specific organizations, business plan readers, require some specific timeframe. The Small Business Administration (SBA), for example, requires at least 12 months of monthly projections for most of its mainstream loan guarantee programs.

For normal planning purposes, for any normal company, you should have at least 12 months detailed month by month for business plan financial forecasts. That would be for sales forecast, cost of sales, your burn rate, and eventually the complete financial forecast, if you’re going to do it. Then have another two years beyond that, for three years total, as annual projections.

If you’re using LivePlan this solves itself with the settings in your plan. If you’re doing it yourself with a standard spreadsheet, the normal structure looks like the illustration here:

spreadsheet-structure

That doesn’t mean you don’t think in longer terms. Think about what you want for your business for 5, 10, 20 years. I’m all in favor of that. But I don’t think you should plan for very long time periods in the detail of financial forecasts. The larger numbers — sales, for example, involve so much uncertainty that the time you spend trying to project more detail isn’t worth it. At least not in normal cases. If you’re farming lumber from tree farms, maybe. Another special case I’ve seen is the long development and planning cycle for mainstream pharmaceutical research, requiring years of spending before getting to revenue.

You can put too much detail into a business plan. You run into a problem of diminishing returns. For the detail it takes to run the monthly cash flow into the second year and beyond, with so much compounded uncertainty, the information value, and decision-making benefits, are rarely worth it.

Be forewarned. You’ll run into experts who will say you need more than 24 months, or more than five years in detail. They will be very sure of themselves. Sometimes what they mean is that they know more than you do, so they want you to suffer more. Or they want you to pay them to do the financials instead. Or they don’t like you or your business plan and they’re embarrassed to tell you. So instead, they say you need to forecast in more detail. If they are investors, what they mean is they don’t want to invest and they don’t want to tell you why. If they are loan managers, they don’t want to make the loan. And they don’t want to tell you the real reason.

My advice to you, when that comes up, is that unless you are a special case (if you are, you know who you are), look for another expert.

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Annual Business Planning: Start Now to Prepare for 2024

September 18, 2023

annual business planning

Annual business planning is a critical success factor in achieving long-term financial goals. Crafting a yearly business plan involves reviewing your past performances and identifying solid strategies for the new year.

Assembling your business plan on your own can be challenging. Many businesses turn to accounting firms to support developing their annual business plans. These experts can help you analyze your data and the overall business climate, helping you make better business decisions grounded in reality.

But you don’t want to wait too long to start – January 2024 is already too late!

annual business planning

Benefits of Annual Business Planning

An annual business plan can take multiple forms. It often clearly outlines the company’s goals and objectives and works backward to determine all necessary activities. A well-developed and structured annual business plan brings several key benefits.

Provides a Roadmap for Achieving Business Goals

Annual business planning clearly outlines activities for each team member to undertake while working towards achieving their business goals. Although you can deviate from your plan as the year progresses, your actions should work to bring you to those goals.

Helps Businesses Adapt to Changing Market Conditions and Economic Factors

Part of the drafting process of the annual business plan involves weighing the external environment. That includes market trends, competition, and economic conditions to identify potential changes that impact the business.

Enables Businesses to Make Informed Financial Decisions

The first step in writing an annual business plan is setting challenging – yet attainable – goals and objectives for the upcoming year. These benchmarks lead to informed decision-making for the business.

Essential Elements of Annual Business Planning

As 2024 creeps closer, your business plan has a few central parts to consider.

Review of the Previous Year’s Performance

How did you perform the previous year? What’s your current trajectory? The last year’s performance and goals make great starting points for the coming year’s targets. 

Identification of Key Performance Indicators (KPIs)

What’s essential in your business? Often, a few key metrics can summarize your progress toward your objectives. These KPIs focus your team’s attention on the right things. 

Setting Realistic Financial Goals

A sustainable business sets challenging yet achievable financial goals. Assess your current financial position and use that to specify what you hope to achieve during the financial year. Need to improve profit margins? Create a plan to cut costs or raise prices.

Development of a Detailed Budget

A detailed budget clearly outlines the available resources, significant expenses, and the path to achieving your financial goals and objectives. 

Creation of a Marketing, Sales, and Advertising Plan

A marketing, sales, and advertising plan defines what you need to do to promote your business to your target audience. Market research and competitor analysis can help you identify (and close) gaps in the market.

Factors to Consider When Annual Business Planning for 2024

A business plan can help you be ready for anything, and multiple factors come into play when planning for the upcoming year. Below are a few of the top considerations.

Anticipated Changes in Technology

2023 taught us that technology trends continue to shape the market. For example, the proliferation of AI technology has massive ramifications for businesses. Your planning process should note any changes on the horizon.

Expected Shifts in Consumer Behavior

Consumer behaviors are constantly shifting. Keeping up with the latest developments can help you take advantage of opportunities as they come and not always be running after the market. 

Changes in the Regulatory Environment

New rules, standards, and regulations constantly evolve the regulatory environment. Anticipating these regulatory changes can ensure your business’s sustainability and compliance.

Potential Impact of Economic Factors

No matter how good your plan is, ignoring the general economic landscape can throw a major wrench in your operations. Inflation, changes in consumer trends, and market volatility play a role in your company’s long-term sustainability. 

The Role of Accounting Firms in Annual Business Planning

Managing your own financial planning, forecasting, and budgeting can be challenging. Of course, you and your team must be invested in the process, but there’s no need to go it alone. An expert accounting firm can help you set and achieve goals. 

The planning process involves decisions about finances and budgets based on assumed future expenses, revenues, and cash flows. An accounting firm can help you sort through historical data, market trends, and analysis before making final decisions about your goals and objectives. 

Accounting professionals can offer advice and guidance on your business plan’s accounting and tax implications . Moreover, these professionals can help you develop tax-efficient strategies and ensure compliance with tax regulations. 

Finally, accounting professionals have insight into many companies. They can help you analyze historical data and performance metrics to set a baseline for realistic and achievable business goals. 

Tips for Successful Annual Business Planning

Expert assistance can make your annual business planning run smoothly and be more realistic. Let’s take a look at a few tips from the experts.

Keep the Plan Concise and Focused

Avoid getting too fancy with your annual business plans. Complexity can be challenging to communicate, implement, and track. A solid annual business plan with streamlined goals and objectives is concise and focused.      

Involve Team Members in the Planning Process

An excellent annual business plan gets buy-in from all stakeholders by involving them in the decision-making process. 

Continuously Monitor Progress and Adapt as Needed

Monitoring progress against your targets and KPIs helps you take rapid action before the situation becomes critical. Quick responses help ensure minor problems stay small.   

Seek Guidance from Trusted Partners, such as Accounting Firms

Sometimes, professional help makes having a stellar year more achievable. They can help you focus on essential topics and avoid wasting time on activities that don’t bring your business forward.

annual business planning

Get a Jump Start on Your 2024 Annual Business Planning

An annual business planning exercise is a prerequisite for achieving long-term goals and objectives. 

But don’t wait too long. Now is the time to start planning for 2024. Involving an accounting firm in this planning process helps set achievable goals and monitor progress.

At Founder’s, we understand the nuances in the annual business planning process and have a proven track record of helping businesses achieve their goals and objectives. Let us take your business to the next level. Contact Founders today to start planning for 2024.

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Difference Between Business Planning and Annual Work Plans

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  • Business Plans
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Difference Between Business Plan & Strategic Plan

What is an annualized budget, how to assemble a project management plan.

  • What Do Business Documents Include?
  • How to Design a Corporate Financial Plan

A business plan can prove the viability of your enterprise and help you obtain funding. It is where you show projections of long-term profitability and growth. However, sometimes economic or other circumstances can alter your original plans. An annual work plan re-evaluates and adjusts the direction and goals of your company on a short-term basis to ensure that you continue to prosper in a financially sound environment.

Business Plan

A business plan details important aspects of your company in one document. Included is information about the licenses and permits required in your jurisdiction and your business name and structure, such as sole proprietor or limited liability company. Your business plan outlines the estimated cost of running your business and includes capital and operating expenses, such as equipment acquisition, leased space, number of employees and other essential liabilities. In addition, the plan specifies your target customer and projected share of the market, including information about your competitors. One of the most important sections is the estimate of your revenue and cash flow to show that your enterprise is profitable.

Annual Work Plan

Your business plan may not be relevant in subsequent years, or you may want to show details of your progress toward your original goals after you have been in operation a while. An annual work plan updates your company's progress. Each one restates the initial business plan projections and details interim goals for the next year. For example, a review of your percentage of growth for the past 12 months helps you project new sales and revenue figures based on planned product releases and marketing campaigns. In addition, each staff member's position can be related to the completion of the tasks required to attain your company goals.

Differences

Long-range objectives based on projections and estimates, as a result of extensive research, are contained in your business plan. The information usually is not based on actual data from your operations. However, business plans are important if you are starting an enterprise that will remain viable over time. Annual work plans are short-term evaluations of the accuracy of your business plan. If you are on track, your initial plan still is relevant, while the annual document specifies the steps to take to fulfill your long-range goals. A business plan gives you the big picture, and an annual work plan evaluates where you are and details how to move forward.

Considerations

Build your strategy of implementation along with your annual work plans. It is vital to identify goals and how you will reach them. However, naming your strategy for each objective is just as important. For example, your annual work plan may state that your revenue will grow by 20 percent, and you will increase your sales staff to accommodate this projection. Your strategy can include whether you need more office space and better benefits to attract experienced representatives. You may need to hire support and technical employees. Upgrading your computer system to process orders more efficiently also may be necessary. The strategy of how to reach your annual work plan objectives ensures that you stay on track throughout the year.

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Carol Deeb has been an editor and writer since 1988. Her work has appeared in magazines, newspapers and online publications, as well as a book on education. Deeb is a real-estate investor and business owner with professional experience in human resources. She holds a Bachelor of Arts in English from San Diego State University.

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Home » Employer Resources » Startup Center » The Ultimate Guide to Creating Investor-Friendly Business Plans [Format Guide]

The Ultimate Guide to Creating Investor-Friendly Business Plans [Format Guide]

Business Plan Format

Are you an aspiring entrepreneur wondering what a business plan should look like and how to create one? A well-structured business plan is an essential part of any successful venture. But it may seem challenging to give shape to your business idea and not miss out on any important details.

In this blog, we’ll discuss the key elements of a business plan and provide you with a useful business plan format with sample statements to help you on your way.

Table of Contents

Business Plan: An Overview

A business plan is a detailed document that outlines the objectives, strategies, and tactics of a business. It is typically used to secure investments, financing, and other forms of support from stakeholders. The document should include information such as descriptions of the company, its products and services, its customers, its marketing and financial plans, and its operational plans. Having a business plan is crucial for any business. It can ensure that everything is taken into account and that the business is well-prepared to succeed.

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Business Plan Format with Sample Templates

Writing a business proposal can be tricky. Whether it is a small or large business, there are a few key elements you should consider when discussing a business strategy to enhance your business plan. This section provides sample templates that can help you streamline your unique business proposal.

1. Give an Executive Summary

An executive summary in a business plan is a brief overview that outlines the major points of the plan. It should be concise and engaging so that it captures the attention of potential investors or lenders. The summary should be in paragraphs with comprehensible headings and points. To write an executive summary, you should briefly answer the following questions (not necessarily all):

  • What is the mission of your business or your company/organization?
  • How did the idea of business come up?
  • Who has the highest leadership?
  • Which industry does the business belong to?
  • What is going to be the employee base?
  • What are the business’s products and services?
  • What are the competitive advantages of the business in the already existing market/industry?
  • What marketing strategy will be used?
  • How many different operational teams are going to form?
  • What is going to be the location?
  • Who are the stakeholders?
  • How will you fund the business?
  • How much money is required to set up the business?
  • What are its future financial targets?

Here is an example of an executive summary of an organic food product start-up.

“[Company Name] is a start-up business venture that specializes in the production and distribution of organic health food products. It was founded by two entrepreneurs who have 10 years of combined experience in the health food industry. The company is located in a major metropolitan area.

Our goal is to become the top provider of organic health food products in our market. We plan to do this by providing high-quality products and services and excellent customer service. We have identified some key competitive advantages that will help us succeed, including our experienced management team, our strong network of suppliers, and our commitment to innovation.”

2. Talk About the Business’s Key Products and Services

In this section, talk about the key products and services that your business plans to offer, along with their value proposition. Here, the term value proposition means why a person will care to buy your product or service. It also uncovers unexplored and potentially marketable opportunities.

Here’s a business proposal example that includes details of key products and services for an organic healthy food product start-up:

“Our business offers organic foods that are healthier and more sustainable. Our value proposition is that our customers can enjoy healthy, farm-fresh foods while feeling good about contributing to the environment. We strive to offer a wide range of products, from organic produce to organic sauces, fruit bars, and snacks.

As dietary habits have evolved, there are a significant number of people who prefer or require gluten-free products due to their health issues. We strive to produce gluten-tolerance-tested, authentic, and trustworthy gluten-free products with delivery and online ordering to make purchasing easier for our customers.”

3. Insight on Competitive Market Analysis

Business planners need to possess comprehensive knowledge of their target industry and market. Having great business analysis skills can help a business planner get a clear understanding of how to compete effectively and gain a foothold in the market. This section should cover the following information:

  • Market Size: Describe the size of the industry, the expected growth rate, and the potential earnings it offers.
  • Target Audience: Who are the perfect customers for your business? Include details like their age, where they live, and their preferences.
  • Competitors: Write about your key competitors’ strengths and weaknesses and how you plan to counter them.
  • USP (Unique Selling Point): Cite what distinguishes your product or service from the competition. What’s your marketing plan to set yourself apart from the competition?
  • Price and Profit: Share what pricing scheme your business will follow and the estimated profit margin.
  • Rules and Regulations: Specify any special rules or laws you must follow in your industry.

An example to describe the market analysis in the business proposal template for an organic healthy food product’s start-up will be like this:

“The health food industry in India is rapidly expanding, with a compound annual growth rate (CAGR) of 20% and an expected CAGR of 16% by 2026, equivalent to $30 billion. This growth is attributed to the increasing number of health-conscious individuals, who are expected to grow from 100 million to 176 million by 2026. Healthy snacking categories like cookies, fruit snacks, snack bars, and trail mixes are expected to experience significant growth.

Our products and services stand out due to our commitment to quality and reasonable prices. Our experienced management team, strong supplier network, and innovation are key competitive advantages. We aim to market our products to health-conscious consumers seeking organic alternatives to conventional foods, aiming to become the leading organic food supplier.”

4. Target Audience Selection

A business’s success is incomplete without fostering and developing its customer base. “You must know your customers and the customers must know you” – this should be the motto for your business.

After in-depth research on target customers, you can form the right marketing and sales strategies. The best way to identify customers is to understand their problems and needs. Simply put, your business’s products and services must solve their problems and fulfill their wants. Here’s an example to share about the target audience selection for an organic, healthy food product start-up:

“Our target audience is adults aged 18-40 who are health-conscious and interested in organic options. We will focus our marketing and sales efforts on this demographic, as they are likely to be more open to trying new products and more likely to embrace organic alternatives. Our goal is to become the leading organic food supplier for this demographic.”

5. Structure of the Company’s Management and Team

This section of the business plan template will discuss the teams and departments that will make the business run. Briefly outline the roles and responsibilities of a position and create a job posting to hire the right employee.

Here is one way to briefly mention your company’s management team structure:

We will have a CEO, COO, CFO, and other executive positions to manage the company’s operations. Several teams will be involved in running the business, including a customer service team, administration, human resources, sales and marketing team, finance team, operations team, and product development team. Each team would have its own set of roles and responsibilities.”

6. Marketing and Promotional Strategies

This is one of the most crucial parts of your business plan. The right marketing and promotional plans help spread the word about your product or service, increase overall brand awareness, capture market share, and thereby, increase the customer base, sales, and profits. Here is a brief overview of marketing and promotional strategies in your business proposal:

“Our marketing strategy is centered around a multi-faceted approach to engaging with our customers. We will create interesting and relevant content for social media platforms, optimize our website for search engines, collaborate with influencers, run targeted online ads, and send out email campaigns.

Our promotional efforts will include limited-time discounts, loyalty programs, and exclusive events to connect with our customers on a personal level. We plan to expand our outreach through partnerships with complementary businesses and attending industry events. To measure the effectiveness of our strategies, we will leverage analytics tools and gather customer feedback to make necessary adjustments. Our ultimate aim is to build trust and credibility in our brand.”

7. Details of Developing Sales Funnel

The growth strategy of a business depends heavily on its sales funnel strategy. This is because successful sales will lead to revenue growth and business expansion. An example to mention about the sales funnel in the business plan model is:

“Our sales funnel is designed to help our business generate more leads and close more sales. We will start by optimizing our online presence to increase visibility and attract potential customers. From there, we will create content and campaigns to nurture leads and build valuable customer relationships. We will then use analytics and other data-driven tactics to identify qualified prospects and target them with effective messaging and emails. Finally, we plan to use automated tools to manage the sales process from start to finish.”

8. Lay Out Your Financial Plan and Budget

This point of your business proposal will include details of the budget, balance sheet, revenue generation, cost reduction strategies, and other expenses. It should talk about the costs required to cover all business operations, management, and estimated future revenue projections. Here is a template of a business budget.

Business Budget Template

9. Add Appendix to Provide Additional Details

The appendix to a business proposal template includes extra documents that give more information about the proposal. You can put in any part that needs evidence, facts, or reports. Normally, the appendix can have these documents:

  • Market research with charts and data from other sources.
  • Licenses, contracts, certificates, or patent papers.
  • Maps and plans for expanding the business facility.
  • Contact details for team members, board members, and current investors.
  • Reports and statements from quality-check experts.
  • Financial documents like the balance sheet and the company’s account statements.

Every business needs a one-of-a-kind business plan format. It should contain all the necessary information and documents to give the reader, investors, and stakeholders a comprehensive overview of the proposed business. By taking the time to structure and create a detailed business plan, entrepreneurs, business planners, and analysts can create a clear and concise guide to help them achieve their goals. Executing a successful business plan, therefore, requires skilled professionals. If you are interested in the field of business management and helping businesses make valuable decisions, then look for work from home accounts jobs to contribute.

Have you ever drafted a business plan? Tell us in the comments below!

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annual business plan is usually signed off by which month

Sandipta Banerjee has completed her Master's in English Literature and Language. She has been working in the field of editing and writing for the past five years. She started her writing journey at a very young age with her poems which have now evolved into a poetry blog. She was working as Editorial Head in a US-based publishing house before joining Internshala.

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COMMENTS

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