what is an annual business plan

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

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.

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

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Annual Business Planning Template

Written by Dave Lavinsky

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. The best 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. 

How to Finish Your Business Plan Template in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan template?

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

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How to Write a Business Plan, Step by Step

Rosalie Murphy is a small-business writer at NerdWallet. Since 2021, she has covered business insurance, banking, credit cards and e-commerce software, and her reporting has been featured by The Associated Press, MarketWatch, Entrepreneur and many other publications. Rosalie holds a graduate certificate in Quantitative Business Management from Kent State University and is now pursuing an MBA. She is based in Chicago.

Ryan Lane is an editor on NerdWallet’s small-business team. He joined NerdWallet in 2019 as a student loans writer, serving as an authority on that topic after spending more than a decade at student loan guarantor American Student Assistance. In that role, Ryan co-authored the Student Loan Ranger blog in partnership with U.S. News & World Report, as well as wrote and edited content about education financing and financial literacy for multiple online properties, e-courses and more. Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press. Ryan is located in Rochester, New York.

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

What is a business plan?

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. summarize how your company operates, 10. add any additional information to an appendix, business plan tips and resources.

A business plan outlines your business’s financial goals and explains how you’ll achieve them over the next three to five years. Here’s a step-by-step guide to writing a business plan that will offer a strong, detailed road map for your business.

ZenBusiness

A business plan is a document that explains what your business does, how it makes money and who its customers are. Internally, writing a business plan should help you clarify your vision and organize your operations. Externally, you can share it with potential lenders and investors to show them you’re on the right track.

Business plans are living documents; it’s OK for them to change over time. Startups may update their business plans often as they figure out who their customers are and what products and services fit them best. Mature companies might only revisit their business plan every few years. Regardless of your business’s age, brush up this document before you apply for a business loan .

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

This is your elevator pitch. It should include a mission statement, a brief description of the products or services your business offers 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. This should contain basic 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, write a little about 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

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

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

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

» MORE: How to write a successful business plan for a loan

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.

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.

Include details about your sales and distribution strategies, including the costs involved in selling each product .

» 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.

Accounting software may be able to generate these reports for you. It may also help you calculate 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.

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.

NerdWallet’s picks for setting up your business finances:

The best business checking accounts .

The best business credit cards .

The best accounting software .

Before the end of your business plan, summarize how your business is structured and outline each team’s responsibilities. This will help your readers understand who performs each of the functions you’ve described above — making and selling your products or services — and how much each of those functions cost.

If any of your employees have exceptional skills, you may want to include their resumes to help explain the competitive advantage they give you.

Finally, attach any supporting information or additional materials that you couldn’t fit in elsewhere. That might include:

Licenses and permits.

Equipment leases.

Bank statements.

Details of your personal and business credit history, if you’re seeking financing.

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 write a detailed, convincing business plan:

Avoid over-optimism: If you’re applying for a business bank loan or professional investment, someone will be reading your business plan closely. Providing unreasonable sales estimates can hurt your chances of approval.

Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors. 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. 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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Write your business plan

Business plans help you run your business.

A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice.

Pick a business plan format that works for you

There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs.

Most business plans fall into one of two common categories: traditional or lean startup.

Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. They tend to require more work upfront and can be dozens of pages long.

Lean startup business plans are less common but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically only one page.

Traditional business plan

Lean startup plan

Traditional business plan format

You might prefer a traditional business plan format if you’re very detail-oriented, want a comprehensive plan, or plan to request financing from traditional sources.

When you write your business plan, you don’t have to stick to the exact business plan outline. Instead, use the sections that make the most sense for your business and your needs. Traditional business plans use some combination of these nine sections.

Executive summary

Briefly tell your reader what your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location. You should also include financial information and high-level growth plans if you plan to ask for financing.

Company description

Use your company description to provide detailed information about your company. Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve.

Explain the competitive advantages that will make your business a success. Are there experts on your team? Have you found the perfect location for your store? Your company description is the place to boast about your strengths.

Market analysis

You'll need a good understanding of your industry outlook and target market. Competitive research will show you what other businesses are doing and what their strengths are. In your market research, look for trends and themes. What do successful competitors do? Why does it work? Can you do it better? Now's the time to answer these questions.

Organization and management

Tell your reader how your company will be structured and who will run it.

Describe the  legal structure  of your business. State whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or limited liability company (LLC).

Use an organizational chart to lay out who's in charge of what in your company. Show how each person's unique experience will contribute to the success of your venture. Consider including resumes and CVs of key members of your team.

Service or product line

Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings. If you're doing  research and development  for your service or product, explain it in detail.

Marketing and sales

There's no single way to approach a marketing strategy. Your strategy should evolve and change to fit your unique needs.

Your goal in this section is to describe how you'll attract and retain customers. You'll also describe how a sale will actually happen. You'll refer to this section later when you make financial projections, so make sure to thoroughly describe your complete marketing and sales strategies.

Funding request

If you're asking for funding, this is where you'll outline your funding requirements. Your goal is to clearly explain how much funding you’ll need over the next five years and what you'll use it for.

Specify whether you want debt or equity, the terms you'd like applied, and the length of time your request will cover. Give a detailed description of how you'll use your funds. Specify if you need funds to buy equipment or materials, pay salaries, or cover specific bills until revenue increases. Always include a description of your future strategic financial plans, like paying off debt or selling your business.

Financial projections

Supplement your funding request with financial projections. Your goal is to convince the reader that your business is stable and will be a financial success.

If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. If you have other collateral you could put against a loan, make sure to list it now.

Provide a prospective financial outlook for the next five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. For the first year, be even more specific and use quarterly — or even monthly — projections. Make sure to clearly explain your projections, and match them to your funding requests.

This is a great place to use graphs and charts to tell the financial story of your business.  

Use your appendix to provide supporting documents or other materials were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts.

Example traditional business plans

Before you write your business plan, read the following example business plans written by fictional business owners. Rebecca owns a consulting firm, and Andrew owns a toy company.

Lean startup format

You might prefer a lean startup format if you want to explain or start your business quickly, your business is relatively simple, or you plan to regularly change and refine your business plan.

Lean startup formats are charts that use only a handful of elements to describe your company’s value proposition, infrastructure, customers, and finances. They’re useful for visualizing tradeoffs and fundamental facts about your company.

There are different ways to develop a lean startup template. You can search the web to find free templates to build your business plan. We discuss nine components of a model business plan here:

Key partnerships

Note the other businesses or services you’ll work with to run your business. Think about suppliers, manufacturers, subcontractors, and similar strategic partners.

Key activities

List the ways your business will gain a competitive advantage. Highlight things like selling direct to consumers, or using technology to tap into the sharing economy.

Key resources

List any resource you’ll leverage to create value for your customer. Your most important assets could include staff, capital, or intellectual property. Don’t forget to leverage business resources that might be available to  women ,  veterans ,  Native Americans , and  HUBZone businesses .

Value proposition

Make a clear and compelling statement about the unique value your company brings to the market.

Customer relationships

Describe how customers will interact with your business. Is it automated or personal? In person or online? Think through the customer experience from start to finish.

Customer segments

Be specific when you name your target market. Your business won’t be for everybody, so it’s important to have a clear sense of whom your business will serve.

List the most important ways you’ll talk to your customers. Most businesses use a mix of channels and optimize them over time.

Cost structure

Will your company focus on reducing cost or maximizing value? Define your strategy, then list the most significant costs you’ll face pursuing it.

Revenue streams

Explain how your company will actually make money. Some examples are direct sales, memberships fees, and selling advertising space. If your company has multiple revenue streams, list them all.

Example lean business plan

Before you write your business plan, read this example business plan written by a fictional business owner, Andrew, who owns a toy company.

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

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 2024.

• 7 Mistakes to Avoid When Conducting Annual Strategic Planning

Build And Execute Your Annual Plan With Cascade 🚀

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.

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.

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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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

U.S. Small Business Administration. " Write Your Business Plan ."

SCORE. " When and Why Should You Review Your Business Plan? "

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How to create a successful annual business plan

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.

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: 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.  

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.

Template: Annual Planning Example

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The Definitive Guide to Annual Planning for Business Owners

In the relentless bustle of the business world, an annual plan stands as your company’s compass, mapping out the pivotal landmarks and routes for the fiscal year ahead. This extensive guide is tailored to the diligent business owners who understand the essence of strategic planning in steering their ventures towards growth and success.

Navigating through the intricate process of annual planning can seem daunting at first, especially when the workload and complexities of day-to-day operations threaten to overshadow the long-term strategic vision. Yet, it is through the rigors of planning that the most successful businesses find their roadmap to prosperity.

From setting clear, measurable targets to aligning your financial forecast with your operational capacity, we cover the vital steps and principles that will fortify your business for the year ahead. In the pages you’re about to read, you will unfold:

• Why annual planning is imperative for sustainable business growth
• A step-by-step breakdown of the annual planning process
• How to avoid common strategic planning pitfalls
• Ready-to-use templates to kickstart your annual planning with confidence

Business owners set the foundational tone for their company’s future trajectory, and annual planning is the bedrock upon which that direction is built. Join us as we craft an annual plan that promises not merely to guide but to transform and invigorate your enterprise.

What Is Annual Planning?

Annual planning isn’t just a once-a-year exercise to set company goals and initiatives; it is a comprehensive framework that crystalizes strategic objectives into actionable items for every department and level of your business.

It’s a cyclical process that should inform and adapt to your day-to-day operations while charting your business’s growth trajectory over a 12-month period.

The planning is an exercise in mindfulness, requiring a thorough understanding of your business’s current state and a visionary approach to where you’d want it to be. This proactive mindset entails foresight, adaptability, and a touch of audacity to stretch your business beyond its current constraints.

ROI , productivity, and market expansion all sound great on paper, but without a solid plan to turn these aspirations into reality, they remain mere wishful thinking. Annual planning gives you that plan — one that is wound through with the threads of accountability and strategic direction.

A well-crafted annual plan:

• Align your team toward common goals
• Enhances resource allocation
• Identifies and mitigates risks
• Provides a benchmark for evaluation and benchmarking

Why is Annual Planning Important?

Annual planning is not just a business trope; it’s a survival skill in the fast-paced, competitive landscape. Here are compelling reasons why it should be a top priority for business owners:

• Goal Clarity : It doesn’t get more clear-cut than annual planning for setting down company-wide goals and the means to achieve them. The clarity in business objectives streamlines operations, fosters innovation, and unifies employees under a common purpose.
• Strategic Focus : In the whirlwind of quarterly results and daily challenges, strategic focus can wane. Annual planning provides precision in strategic initiatives, ensuring that you’re not just working but working towards your company’s long-term success.
• Resource Alignment : Every business has a finite amount of resources, from manpower to capital and time. Aligning these resources with a strategic annual plan ensures maximum impact and return on investment.
• Risk Mitigation : The business environment is fraught with uncertainties. Strategic planning anticipates risks and prepares contingencies to minimize disruptions.
• Accountability and Benchmarking : A documented plan holds you and your team accountable. It sets the rubric against which performance can be measured and improvements can be tracked.

Done thoughtfully, annual planning can elevate your business from reactive to proactive, fortifying its resilience and readiness for the future.

The Benefits of The Annual Planning Process

What does annual planning bring to the table? Here’s a taste of the benefits:

• Enhanced Decision-Making : A strategic plan guides your decisions. When in doubt, you can refer back to your objectives, aligning your choices with your long-term strategy.
• Financial Clarity : A detailed annual plan supports budgeting and financial forecasting, ensuring that your fiscal strategy aligns with your business goals.
• Enhanced Team Performance : Employees value a clear direction and purpose. An annual plan provides this, leading to increased motivation, engagement, and productivity.
• Improved Market Adaptability : With a yearly plan incorporating market analysis, your business will be better equipped to pivot in response to shifts in customer behavior and market dynamics.

Annual planning offers a host of benefits that trickle down from the strategic level to everyday business interactions. It brings cohesion, purpose, adaptability, and foresight to your business.

5 Steps To Build An Annual Plan

Step 1: reflect on the past year.

Begin your planning process by looking back at the past year. What were your achievements and disappointments? What lessons can you carry forward? A SWOT analysis — identifying your business’s strengths, weaknesses, opportunities, and threats — can be instrumental in this step.

Step 2: Define Your Objectives

What are your strategic objectives for the coming year? These should be high-level goals that address the SWOT analysis results and enhance business growth.

Step 3: Break Down Objectives into Key Results

Chunk your objectives into measurable key results. Each key result should have specific metrics, a timeline, and an owner responsible for its completion.

Step 4: Develop Strategies and Initiatives

For each key result, define the strategies and initiatives that will help you achieve them. Consider market dynamics, competitor action, and internal capacity in crafting these.

Step 5: Communicate, Implement, and Monitor

Communicate your annual plan across the organization. Implement the strategies through a series of tactical initiatives and monitor progress against your key results religiously, making adjustments as necessary.

4 Templates for Annual Plans

The traditional strategic plan:.

This template is perfect for those business owners who prefer the established structure of a strategic plan, featuring sections on vision and mission, environmental scanning, strategy formulation, strategy implementation, and evaluation and control.

The Results-Oriented Plan:

Focused more on outcomes than processes, this plan template centers on key results and the methods to achieve them. It’s ideal for businesses that set and monitor key performance indicators (KPIs) rigorously.

The Lean Plan:

A stripped-down approach to traditional planning, the lean template is for businesses with a more fluid, rapidly-changing environment. It emphasizes a concise, living document updated frequently.

The One-Page Business Plan:

This ultra-simplified template distills the essence of your annual plan onto a single page. It encapsulates your business’s vision, mission, objectives, and strategies, serving as a quick reference for you and your team.

7 Mistakes to Avoid When Conducting Annual Strategic Planning

Failing to include key stakeholders:.

A strategic plan crafted in an echo chamber is prone to blind spots. Engage with your workforce, community, and industry experts to gain diverse perspectives.

Overcomplicating the Plan:

Annual plans are tools for communication and alignment. A plan that’s too dense and complex can discourage engagement and comprehension.

Inadequate Focus on Implementation:

Fancy strategies on paper amount to nothing if they’re not implemented. Your annual planning should give equal weight to implementation and monitoring.

Ignoring the Competition:

Market positioning is a dynamic equilibrium. Understand and assess your competition to refine your strategies effectively.

Neglecting to Build in Flexibility:

Your business environment can change rapidly. A rigid annual plan can quickly become obsolete. Ensure your plan is adaptable, with built-in space for tactical shifts.

Setting Unrealistic Goals:

Your annual plan is only as good as the realism of its goals and timelines. Unrealistic objectives can demoralize your team and disillusion your stakeholders.

Underestimating Communication:

A common strategic vision is a powerful glue for your teams. Regular, transparent communication about the plan’s progress is essential to maintain this cohesion.

Crafting an annual plan is no small feat, and the complexities and variables involved can sometimes seem overwhelming. However, with the right framework and resources, you can create a plan that not only steers your company’s course but ignites its potential.

Engage with this guide as your virtual strategic advisor and start drafting the roadmap to your business’s great tomorrow. The time and effort invested in annual planning will be the seeds from which your business’s future grows.

To learn more about developing an annual plan and other strategic strategies and formulations, contact Strategy Capstone!

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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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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

What is a business plan? 

A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.  

In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes. 

Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]: 

The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors. 

The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks. 

Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.  

Read more: What Is a Marketing Plan? And How to Create One

1. Executive summary 

This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each one solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

Read more: What Is Competitor Analysis? And How to Conduct One

4. Products and services

Use this section to describe everything your business offers to its target market . For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach them. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

Read more: Market Analysis: What It Is and How to Conduct One   

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

Read more: What Is a Brand Strategy? And How to Create One

7. Financial planning  

In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].  

Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning. 

How many individual products or service packages do you plan to sell over a specific time period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point, or the amount you have to sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

Start your business with Coursera 

Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization : 

Article sources

1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.

2. Inc. " How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.

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The Ultimate Guide to Creating a Strategic Annual Plan

November 19, 2021 - 10 min read

The first step to achieving goals is to come up with an annual plan. A strategic annual plan makes it easier for managers, team leaders, and company owners to execute their vision for growth. Not only does creating an annual plan give you time to reflect on past accomplishments, but it’s also a great way to make ideas actionable. Keep reading to learn more about what annual planning is and how you can create one that has a significant impact on your organization. 

What is an annual plan?

An annual business plan is a set of goals and milestones that guide a company's operations for the year ahead. It helps guide employees and investors in the right direction. For many people, this year's new year begins with a review of their previous year. They then set goals and make plans for the coming year.

Annual planning is a combination of two other important elements: a business plan and an annual plan. 

A business plan is a document that a company or organization uses to set goals and improve performance. It's similar to a belt-tightening exercise.

An annual plan is a strategy that a company uses to set goals and expectations for the coming year . It helps employees visualize where they are headed and how they can get there. The annual plan also sets out a company's long-term goals and helps guide how it will reach these targets.

An annual business plan helps workers set goals and holds them accountable for achieving those goals for the upcoming 12 months.

Then, there’s strategic planning. A strategic planning process helps an organization identify its mission, vision, and strategic goals.

The strategic plan combined with the annual business plan are two key components of a successful strategy. The former provides a framework for the company's goals and intentions, while the latter provides the necessary tools and processes to execute those goals.

Overview of a strategic annual plan

Here is what is typically included in a strategic annual plan: 

• Analysis of past performance. Reviewing your goals can help you identify areas where you can improve and become more productive.
• Budget estimations. Financial projections are often included in budget planning. They help you plan for the coming year and identify the right course of action for your projects.
• A clear vision statement. Expectations must be clearly stated, as well as responsibilities and clear OKRs. Having these elements in place can help keep teams on track and motivated.
• SMART goals . Set specific, measurable goals and deadlines for your company. This will help you measure how far you've come in terms of meeting the key results.
• Buffer room. A well-written annual plan should include space for emergencies as well. Having a contingency plan can help avoid unexpected expenses.

In a nutshell: the annual plan is a strategy used to plan and execute the organization's goals and objectives. It is usually composed of three phases which are strategy, projects, and timing.

The importance of an annual plan

Annual planning helps define what's important to achieving goals and driving performance. An annual plan also helps keep the workforce united and can be used to motivate and retain employees.

A well-written annual plan can help you set the direction for your company while providing the team with a sense of direction.

Examples of annual strategic planning

Here are some ideas to get you started with your own strategic annual plan: 

1. Coca Cola HBC 2020 Integrated Annual Plan  

Coca-Cola's 246-page report details all aspects of their business. They start by celebrating their wins with statistics. They also include photos of actual customers and partners. Their CEO writes a letter to their stakeholders sharing their biggest accomplishments over the past year. 

Then they go through their vision. Throughout the strategy, you can see that they are using the pillar method for goal planning. Key areas of focus include leveraging existing business, continuing to win the beverage marketplace, making competitive investments, focusing on employee growth, and expanding their licensing.

The overall report is designed well and is reminiscent of a well-crafted white paper. Because the CEO's letter was addressed specifically to stakeholders, we know that this is a tool for increasing investment as well as project planning. Because of this, a lot of the content within it answers the question, “why should I invest in you?”

Throughout the rest of the annual plan, each pillar gets its own section. At the top of each section, there is a list of accomplishments from the past year and priorities for the coming year. They also summarize risks, stakeholders, and KPIs. This makes the packet easy to skim but also easy to remember.

2. pep+ (PepsiCo Positive)

PepsiCo recently announced that their new 2022 initiative will revolve around “the planet and people.” While this is a long-term process for the brand, the launch will mark the core of their strategic annual plan for the foreseeable future. Their keywords include positivity (hence the “+”), sustainability, and “a fundamental transformation of what we do and how we do it.” 

On their dedicated landing page, readers can dig deeper into their annual plan. Also well designed, this presentation shows what the future looks like for PepsiCo through refreshed branding and imagery. Symbols such as smiling farmers and healthy, green fields drive the message home. 

To achieve these new goals, the company will focus on supply chains, inspiring consumers, and driving sustainable change among all its product lines. 

They link several documents throughout the report, including a comprehensive list of goals which is a great example for your own annual plan template inspiration. This three-page chart names pillars on the left-hand side and targets or actions with due dates on the right. 

If their goals have numerical metrics, they include data from past years, along with key benchmarks they hope to reach by the end of the year or in the future. Otherwise, their goals are measured in actions. 

For example, as part of their sustainability pillar, they plan to “develop and deploy disruptive sustainable packaging materials and new models for convenient foods and beverages.” This task is specific and clear, despite the fact that it’s not as quantifiable as some of their other goals. 

3. Nestlé Global’s Annual Report 

Their annual plan is not public but they have shared an annual report on past wins from 2020. In addition to a financial review, Nestlé also shares a new strategy. Starting with important facts and figures the company highlights statistics from organic sales growth and more. They also visualize data about which types of products are selling most and where in the world the company has grown over the past year.

As Coca-Cola did, Nestlé also includes a letter to shareholders. They discuss ways in which they plan to grow in the coming year. This includes what product areas they will invest more in and where they will pause or halt efforts. They also emphasize a new product area which will be the focus moving forward in the short term. In this section, Nestlé touches on long-term strategies and how these short-term goals will affect them. 

In general, their annual report focuses on the word innovation. It mostly has to do with developing new products and revamping old ones. Like PepsiCo, they are using sustainability as a pillar as well as e-commerce.

The report goes on to elaborate on each strategy individually. Nestlé lists action steps and provides clear evidence as to why each is important. They also highlight statistics for growth in key areas and name even bigger numbers for where they hope to be in a year. 

Throughout the report, they include images from ad campaigns that demonstrate the change they wish to continue implementing as part of their marketing plan . Again, branding imagery makes a big difference when creating your own strategic annual plan. It sets the tone for what's written on the page and can help visual learners better understand what you're going for at a glance. 

Although Nestle's strategic annual plan is designed more like a white paper than a chart, this layout is the most magazine-like by far. It serves as a great example of how you can organize ideas on the page in a way that is interesting and attention-grabbing.

One of the most notable aspects of their annual plan is the Materiality Matrix. They use this chart to visualize key areas of interest and prioritize them according to stakeholder values. Within each box, they’ve listed bullet points of business areas this value will impact. It’s a great method for summarizing goals that cover a wide variety of departments and business engagements. 

Understanding strategic planning best practices

Everyone has their own way of thinking about annual plans. Regardless of what you’re trying to achieve, the following strategic planning best practices will help you get there: 

1. Use SMART goals

A variety of SMART goals are commonly used to help guide and motivate people. They help set realistic benchmarks and are designed to help teams achieve success. It will also help you plan for the ups and downs of your business. To reach your goals, divide them up into smaller goals and set specific deadlines. These goals will help you measure how successful you are at reaching them.

2. Include contingencies

For example, having an emergency financial reservoir is a good idea to prevent a potential financial disaster. It can help your company navigate slower seasons while still sticking to your annual plan. 

3. Build in flexibility 

Even minor shifts in external factors can significantly impact on how effective you are at creating and implementing your strategic plan. Never forget that, while we are creating our annual plans in a vacuum, the world will undoubtedly go through more changes this coming year. Even though we can’t predict the future, we can make our plans foolproof by being flexible now. 

What is an annual plan template?

An annual plan template is a document or tool that can be utilized repeatedly to outline the various stages involved in creating an annual plan.

Its purpose is to provide a clear understanding of the annual planning process by specifying the actions to be taken and the timeline to follow in order to develop an effective business plan. By utilizing the annual planning template, individuals or organizations can ensure that they have a systematic approach to reaching specific goals, and can enhance the quality of their business plans.

Using Wrike to assist with an annual plan template

Wrike’s project management software can help you keep track of all your company-related information in one place. It can also streamline your work and help you stay on track. It can also help you keep track of your annual plans and develop a strong strategy.

Start by using last year as a reference. By understanding the issues that affected the previous year, a company can improve its performance in the following year.

Draw reports of time spent per project and see where your team went over or underestimated. Then look at which tasks tend to drain resources the most. Determine whether or not the ROI is worth it moving forward. 

Next, set realistic goals. Reflect on last year's statistics from Wrike Reports and put together a plan with a realistic metric for improvement. 

After, break down big plans into individual steps. Start by focusing on the business goals of the company then outline your key objectives that align with those. Make sure that everyone knows who is responsible for executing and approving each task. 

Draft a Gantt chart that includes each step broken down into relevant tasks. Remember to add deadlines to every action to keep teammates accountable and keep to realistic deadlines.

Then, delegate tasks according to strengths and weaknesses. Use project reporting and individual job performance to assess team members. You may find that those with specialized talent are being tasked with unskilled work when they could help solve major problems elsewhere. 

Don’t forget to involve the whole team. Start early, plan ahead, and keep everyone involved in the process. Doing so will make it easier to overcome obstacles once the projects are underway. 

Additionally, ask them for direct feedback on your ideas for the next year. You will learn from the front line what obstacles they may be facing that will affect the timeline. 

Another bonus of getting your team involved is that it creates more transparency in the workplace. Using Wrike as a part of the process is not only helpful, but the team also keeps learning how to use the system more efficiently as they go. 

Having a work management platform that enables you to plan and execute annual plans is a good idea. Plus, it's also a good idea to use tools that allow you to collaborate and manage complex processes. Create an effective annual plan today with Wrike’s free trial . 

Maria Waida

Maria is a freelance content writer who specializes in blogging and other marketing materials for enterprise software businesses.

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Annual Business Planning: Start Now to Prepare for 2024

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!

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.

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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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:

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:

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 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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Writing an Effective One-Page Business Plan: What You Need to Know (+ Free Template)

By Homebase Team

If you’ve started—or are starting—a small business, you’ve probably heard the words ‘business plan’ thrown around. That’s because a business plan is an important document with important information! Even a one-page business plan can help you address key questions early in the planning process.

That’s right—we said  one page. In many cases, there’s no need for a supermassive document that takes ages to create. In this article, we walk you through what a good business plan needs—and what a business plan one-pager should contain. 

Whether you’re writing your business plan for the first time or giving your existing plan a refresh, we’ve got your back. We’ve even got a free, downloadable business plan template to help you get started. Let’s get into it!

Why do you need a business plan?

A business plan is a blueprint for your business. It outlines everything your business needs, from goals to market to the steps you need to implement.

Business plans serve two main purposes:

• To help you set your business up for success. As you put together your business plan, you’ll be forced to think strategically about all your business goals and activities . Are they realistic? Is something likely to go wrong? What haven’t you thought of? The goal is for you to walk away feeling confident in the future of your business.
• To communicate the value of your business to others. It’s rare that entrepreneurs like yourself will go it 100% alone. You’ll likely work with partners, investors, or vendors to bring your small business to life. A business plan gives your collaborators confidence in you and your business and helps them support you in the best way possible.

Taking the time to create a business plan can feel like you’re wasting all-too-precious time, but it can help keep you focused and increase efficiency down the road. It’ll also help you make better business decisions off the bat so you can grow your small business quickly and wisely. 

What are the 7 main points in a business plan?

Every business plan is unique, which is part of the reason writing one can feel a tad overwhelming. You can’t just copy and paste the plan from another business—instead, you need to assess your business’s idea within its niche.

Luckily, the skeleton of every plan is usually very similar. Whether you’re creating a plan for a neighborhood daycare or that cool new bar down the street , here are a few main points to put into any comprehensive business plan.

1. Executive summary

Your executive summary is an overview of your business plan. 

Think about this section like a TL;DR or too long, don’t read . If someone wants to understand the gist of your business plan in just a few minutes, what information would they need to know?

2. Company overview and description

In this section, you should introduce your business to the reader. By the time they finish reading this section, they should have a good idea of who you are, what you do, and what you sell—in other words, your business’s niche.

Don’t be afraid to dive into your own background and why you decided to start this business. Building a small business is personal, and your story can go a long way in giving the reader some context.

3. Market and competitive analysis

Every business needs customers. Here’s where you’ll detail who they are and the potential target market of your business, including your ideal customer.

You’ll also want to take note of potential competitors that may impact your business. These might be direct competitors, but could also be similar businesses that may compete for your customers’ time and money. For example, if you’re opening a cycling studio, you might consider any other type of fitness studio to be a competitor.

Competition isn’t a bad thing, but being aware of your competition is one way to ensure your business stands out from the crowd. 

4. Business offerings

Here’s where you’ll outline what products or services your business will offer in more detail. It doesn’t have to be a complete laundry list, but it should give readers a general idea and show a certain degree of forethought and attention to details.

For example, if you’re opening a bakery , this might be a sample of your menu. Or if you’re an HVAC repair company , you might share an overview of the services you’ll offer your customers. This section might even mention the products or services you won’t offer and why, especially if it helps clarify how your business is unique.

5. Management and operational plan

From managing employees and inventory to securing equipment and a lease, there’s a lot that happens behind the scenes to keep things running smoothly. Every business plan should touch on how you’ll manage the day-to-day of your business.

This is also a great place to indicate key milestones and timelines so you know that you’re on track for a successful grand opening. 

6. Sales, marketing, and PR strategy

Now that you’ve got all the research and operational plans in place , it’s time to start attracting customers and securing those sales. Even with the best products or services in town, every business can use a little marketing boost. Feel free to get creative. From social media to paid ads, there are tons of ways you can spread the word about your budding business . 

7. Financial forecast and budget

No one loves to crunch financials, but when it comes to business, money talks. And a strong financial plan is key to the long-term success of your business.

This final section of your business plan should estimate the costs, revenue, and profits of your business in the short and long term. How do you plan to finance your business? What costs will you incur before opening day ? What are the ongoing costs?

Not only will this give your vendors and investors confidence in your business, but it helps you make sure that your business is profitable in the long run.

What is a one-page business plan?

A one-page business plan is essentially a condensed version of a full business plan.  

It covers all the core information about your business without overwhelming the reader with details. The goal is to summarize your business plan for yourself and potential stakeholders so they can understand your business at a glance.

Depending on your business needs, this concise document may even be all you need to get your business off the ground. Or it could serve as a stepping stone to a more robust plan in the future. 

Top benefits of a one-page business plan.

Bigger isn’t always better—and one-page business plans are here to prove it.

Here are some benefits and reasons why you might opt for a one-page business plan:

• To kickstart your business planning: A full business plan can be incredibly daunting. A one-page business plan gives you a place to start without feeling overwhelmed with the nitty gritty. 
• To share and distribute: Sometimes potential vendors, partners, or investors want to get more information about your business before they sign on officially. Instead of leaving them with a massive document, a one-page business plan helps you share the relevant need-to-know information easily.
• To focus on the key details: If you’re early on in the business ideation process and want to make sure you have all the important information, a one-page business plan can help you easily validate your business plan.
• To save time: In the long term, you may still expect to put together a full business plan at some point. However, if you’re in a time crunch, a one-page plan can help you get the important insights without the time commitment.
• To easily edit: In an ever-changing business environment, a one-page business plan is much easier to keep updated. 

Key details to include in a one-page business plan.

Above, we outlined the key components of any business plan. The key with a one-pager is to keep it brief without losing any of those important details. 

Let’s look at the sections of a business plan one-pager and dig into how you can adapt them to cover all the details of your business—all on one page. 

Summary and overview

Start your one-page plan by sharing the name of your business, what you do, and your main value proposition.

The problem—and your solution

In a few sentences, share the problem that your business solves and how you solve it. This clarifies why your business should exist, so it’s an important section!

Depending on your business, you may also want to share a few of your team members to help readers put a face to your business. Great examples include the executive chef for a restaurant, or the lead veterinarian for your vet clinic.

Target market

Briefly describe who you expect to be a customer and their characteristics. This could be in the form of a short “ideal customer” profile.

Competitor overview

Here, you’ll touch on potential competitors and what makes your business stand out.

Business timeline

Share the key milestones for your business. For example, pitch when you’ll start marketing your business, when you’ll hire employees , and when you expect to open.

Sales and marketing plan

Here, you’ll quickly highlight the key marketing activities that you’ll use to drive new customers to your business. Try to stick to the most interesting or high-value stuff, like a website or social media .

Financial projections

Outline your expected revenue , expenses, and profits to give the reader an idea of your financial future.

Our tips for creating a one-page business plan.

If you’ve ever written something with a limited word count, you know that sometimes keeping things concise can be easier said than done.

As you get writing your one-page business plan, here are some of our top tips so you can make the most of that one page.

• Focus on the need-to-know information.
• Avoid fluff and keep your sentences short.
• Link out to additional resources and material if more information is necessary.
• Don’t be afraid to strategically incorporate visuals to emphasize the important points.
• Feel free to up sections or have different versions of your one-page business plan based on who’s reading it. 
• Get creative with formatting to keep information organized.

One-page business plan example.

If you’re skeptical that all that information can fit on one page—we have proof!  Here’s an example that you can use to start thinking about your business plan.

Download our free one-page business plan template.

A one-page business plan is one of the most important pages you’ll write for your business. While there’s a lot to think about, it’s worth the effort to give both you and your partners peace of mind.

The good news is that we’ve done the heavy lifting for you! If the above one-pager looks good to you, we’ve pulled it together as a download for you. All that’s left for you to customize it for your unique business, fill in the sections, and get ready to launch your business.

Download your one-page business plan template PDF

Get your team in sync with our easy-to-use, all-in-one employee app.

One-page business plan FAQs

Why should you create a business plan.

There are several reasons you should create a business plan, such as:

• Improving your decision-making as you start and grow your business.
• Setting realistic goals and timelines.
• Attracting top-notch suppliers, investors, and even employees.
• Keeping your business profitable and your financials in order.

What types of companies need a business plan?

From brand-new small businesses to established corporations, companies of all shapes and sizes need a business plan. It’s a key part of setting your business up for success and improving your business trajectory.

Even if you already have a business plan in place, revisiting it from time to time can help you stay on track with your goals and adapt as your business changes.

Can a business plan be one page?

Yes, in many cases a business page can be one page. The trick to creating an effective one-page business plan is making sure that you’re covering the most important pieces of information. 

Our top tips? Keep it as concise and organized as possible, so you can effectively communicate the value of your business to your audience.

Writing a one-page business plan is simple. You can create a business plan from scratch or use a free template like the one above to stay on track, but generally, the steps to writing a one-page business plan include:

• Start with a short executive summary and value proposition to introduce your business.
• Share the problem your business solves and your solution.
• Give an outline of top competitors and how your business compares.
• Create a timeline of key milestones.
• Outline your sales and marketing plan for attracting customers.
• Summarize your financial projections and funding plans.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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Importance of a 2024 Annual Plan: 9 Reasons Why Annual Planning Matters

By Cathy McCullough

Annual & Quarterly Planning

To do this, most leaders will still get together for ‘strategic planning.’ It’s a great day of conversation and diving into some tough subjects. Yet, as time passes the plan more or less seems to dissipate into thin air. Everyone simply goes back to doing what they’ve always done—because it’s what they know. 

Getting Clear on “Why Annual Planning Matters”  

If you want to build a performance culture, then   Annual Planning matters because…  

• Strategic annual planning clarifies your strategic  intent and empowers employees.   Correctly done, a strategic Annual Plan links directly to where the company wants to be three to five years down the road, and it defines what is critical to accomplish this year to increase chances of success in three to five years. People need to know your intent—which is a powerful concept. Before 1970, Honda (as one example) was a small player in the auto market. Leaders within Honda, then, began to share the bold vision of becoming a key player in the market. They clearly expressed their intent and became a dominant player in the market by the mid-1980s. Sharing your intent has business relevance.
• With strategic annual planning, decisions become justified vs rationalized.   There are two sides to this coin. First, having a plan is an outline of your core priorities for the year. Therefore, you give yourself a framework for saying ‘no’ to all those shiny objects that will pop up throughout the year. Secondly, decision-making, in general, is faster because you’ve given your leaders a framework to help guide their decision-making—whether about buying a new piece of equipment, hiring new people, investing in training, etc. Every decision should align with your strategic targets. Your people will learn to think toward your strategic intent vs. making one-off decisions (or simply making a decision with no framework). Decisions, then, can be justified vs. rationalized. 
• The strategic annual planning process forces you to focus on your core customer.   Don’t fall in love with your own plan.  What’s most important is that   your customers   fall in love with what your plan   generates for them.   How will what we’re doing better serve our customers ? What is the competitive advantage of doing what we think we want to do? What about this annual initiative will help improve the retention of our core customers? What about our plan will help us gain new customers? Does the potential 2024 recession impact your plans?
• Strategic annual planning forces you to take a conscious look externally and internally.  Maximizing revenue also means becoming efficient with the monetary resources that are gained. You can have a ton of revenue and no profit—so a good Annual Plan will emphasize both revenue and profit. It forces the conversations that are otherwise simply overlooked. Somehow, we think all these things will magically just work out (and they rarely do). Annual Planning invites deep-dive conversations that get people on the same page and turn the tide toward proactive vs. reactive thinking. For instance: If we generate all this revenue, then do we have the internal systems and processes to support that growth? What process(es) do we need to streamline today so we’re set to reach our strategic intent? How is our brand viewed outside the walls of our own company? Do we have the right culture for implementing our strategic intent?
• Annual planning generates efficiency.   Most people work hard to please those around them—their peers, their bosses, etc. They work hard—but without an Annual Plan , they’re working hard to execute something that’s relatively intangible. Can people really execute well on an intangible or ill-conceived strategy? Creating a clear annual plan for the next 365 days makes the entire workforce more productive.
• Strategic annual planning sets you and your people free!   Most leaders think a plan is ‘a plan.’ They think to themselves: “We can’t deviate from   the plan !” Well…yes, you can because life happens. With a well-intentioned plan, however, you at least give yourself the ability to know where you want to make adaptations as may be needed along the way. Without a plan, your only option is to shoot from the hip and hope for the best. An Annual Plan gives people a snapshot of what you need them to do and why. You won’t spend as much time redirecting well-intentioned people, and they won’t have to wonder what it is you want them to do. A plan gives definition, and everyone is freer to do what they do best…every single day. So don’t let a plan restrict you; let it feed the entrepreneurial spirit of your people. 
• Annual planning can enlighten, motivate, and engage people.   Communicating your plan  allows you to share your plan with people as well as the ‘why’ behind your plan. And how you share your plan (and your intent) matters. Steve Jobs spent countless hours mapping out his presentations to all employees because he understood that how he enlightened people had business significance. Doing this gives a line of sight to what you’re doing and why you’re doing it. Properly delivered, you set the stage for your people to be more engaged and curious about the journey that’s forthcoming and the role they play in the company’s longer-term success. That can be very motivating to the right people. They become engaged, then, to make decisions that are best for the company (vs. only thinking of themselves or of their own ‘silo’). Enlightenment, motivation, and engagement create a magical alchemy for any business culture.
• You begin to measure what matters with a clear annual plan.   Instead of pulling criteria out of thin air, your leaders will begin to focus on measuring what matters. As your plan cascades throughout your company, leader after leader also begins to measure what matters. Everything links back to your overall strategic intent. This also helps with engagement. So many times, leaders measure things that are indeed important (such as EBITDA or profit margins, etc.), but while most employees intellectually recognize that these are important measurements, they’re also somewhat boring to most people. So measure what matters by creating engaging metrics around customer retention, production cycle reduction, new product development (and/or time from development to delivery), etc. This way, your people can see the difference their work is making along the way.

If you want a performance culture, then a robust planning process should become a core part of how you run your business. Using a proven business methodology such as Rhythm can catapult your journey toward  p redictable results .   It’s easier said than done, but the core of a performance culture is providing a framework for the business, and part of that framework consists of healthy discussions (and conclusions) around your strategic intent (i.e., where you want the business to be longer-term, shorter-term, and at the end of this year). Simply half-creating an Annual Plan (or creating one and then not using it as a guide), or simply having an Annual Plan but only giving your people a boring snapshot of it simply isn’t effective. As   Hamel and Prahalad   pointed out, a snapshot by itself yields little information about “whether the driver is out for a quiet Sunday drive or warming up for the Grand Prix.”

Your Next Steps…

• Get a grip on your planning process.   Here’s a quick read that might help you understand your planning process.
• Make sure you share your renewed vision   for what the planning process is and what it can do for your company.
• Consider inviting in a seasoned facilitator.   To that end, here is another quick read on the value of having an outside facilitator for your planning sessions.

Don’t just survive;   thrive.   If you want a performance culture that honors your strategic intent, Rhythm Systems can help you continue the rewarding journey toward even higher levels of success.

Looking for more Annual Planning information to help get you started? Check out our additional resources:

How to Conduct an Annual Planning Meeting

Annual Planning: 9 Tips to Focus & Align Your Team with a Great Plan

Annual Planning Playbook: 5 Steps to Create a Winning Annual Plan

How CEOs Can Avoid High-Cost Mistakes in Annual Planning

Best Practices for Annual Planning

Rhythm Systems   Annual Planning Resource Center

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Cathy McCullough

Photo Credit: iStock by Getty Images

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Annual Planning: The Lifeline of Your Practice

Annual planning is like budget planning but on steroids.

It will help give you financial stability, plan your workdays, and set goals. It creates a blueprint to successfully manage the financial side of your practice, as having a profit/loss statement handed to you does not help you manage the office.

Every CEO knows their numbers and how they’re important to running a successful business.

I recently talked with another dental spouse who had just opened a practice. They were struggling to understand the business side of the office.

I remember being in her shoes 38 years ago. Every March, our accountant would hand us a profit and loss statement that said we made a profit. The funny thing was, our bank account didn’t show that. Then, he would tell us we owed the IRS money for making a profit.

After going through this cycle for a few years, I figured there had to be a different way. We thought we were successful until we went to the bank for a loan to pay the taxes. They made us feel like we were failing as a business.

It wasn’t until we switched to a local credit union and they looked at our numbers to tell us how great we were doing compared to other dental practices they worked with. I knew right then that I needed to understand the numbers.

Fortunately, I met a dental consultant who taught me about annual planning; it changed my business world.

Why Annual Planning is So Important

Making an annual plan allows me to know where our money goes and what our budget is .

It takes time to do, so we do ours during our annual corporate meeting.

You must have good information and categorize your expenses.

How Can a Dental Practice Start Annual Planning?

The first order of business is to have a chart of accounts . You need to know what you are spending on payroll, dental supplies, and office supplies.

Next is understanding what percentage of your production is being spent on each category and how it compares to the industry. This is important for making business decisions like what you are spending in payroll before you decide to give raises. By basing the numbers on production, you can account for increases in your lab and supply bills as your produce more.

Track your adjustments to production to understand how much dentistry you are giving away or what the cost of being in network with an insurance company is costing you.

How to Plan for Upcoming Expenses

The next step in the annual plan is to forecast next year’s expenses.

There needs to be a discussion on:

• purchasing new equipment
• office improvements
• benefits for staff
• marketing changes
• and adding an associate

There will be some variable expenses that change based on your production. If you do more crowns, your lab fees will increase.

We keep a “wish list” folder all year and add ideas of things we would like to do or add to our practice. It helps forecasting if we know what these ideas will cost. Once you have numbers, you need to figure out how much you need to produce to afford your forecasted expenses.

We create a worksheet to calculate a maximum pay raise percentage and then figure out how much this increase will cost us. Sometimes, we have to adjust the percentage we give, but we know how it will affect our expenses.

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Plan for Scheduled Days Off

Goal setting and determining workdays are my favorite parts.

Have this meeting with the staff to look at the upcoming year and plan when the doctor and staff will be taking days off. We look at holidays, dental meetings, and school schedules to lay out the calendar for the upcoming year.

The staff can plan days off when they know the doctor will be off, which helps them plan for their personal budgets and how they will use their PTO. It helps reduce stress when we know the plans for the upcoming year and can plan accordingly.

Take Time to Discuss Yearly Goals with Your Team

During this same meeting, we look at our production numbers for the previous year. We talk about how we can increase production and whether we will raise our fees, add new services, and add new staff or hours. The staff keeps track of their daily and monthly production numbers as they set new goals based on the decisions we make.

After the daily goal is set and number of workdays is determined, we can adjust next year’s production goal to see if our forecasted expenses will work. If not, we will go back through those forecasted expenses and make changes.

Adjust Your Budget Accordingly

We have “ numbers meetings ” each month to look at where we are with our expenses and meeting our goals. Sometimes we adjust our expenses to add things from our wish list folder that we had to cut.

Looking at these numbers each month helps the staff understand where the collections are going and if we are collecting enough to pay the bills.

How Our Dental Office Benefited from Creating an Annual Plan

The first year we created an annual plan, we had unexpected expenses like having to replace a broken sterilizer and handpiece. We went over our annual plan and decided to do less marketing and add to our new equipment.

When we understood we could handle the unexpected expenses, our stress levels went down.

We added our forecasted expenses in QuickBooks and ran a comparison each month to see how we were doing.

Don’t be afraid to start; ask for help.

You have to understand your numbers in order to make decisions like “Can we afford to hire a new hygienist?” and “Can we pay her what she is asking?”

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What is annual travel insurance?

Coverage options in annual travel insurance plans, how much does annual travel insurance cost, purchasing annual travel insurance, annual travel insurance frequently asked questions, how annual travel insurance works.

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

• Annual travel insurance offers multi-trip coverage for travelers taking several trips over a year.
• Annual travel insurance can be cheaper and more convenient but is less flexible than single trip insurance.
• A 30-year-old US resident can expect to pay between $125 to $700 for annual travel insurance.

The more you travel, the higher your chances are that something goes wrong. Fortunately, coverage is available that can soften the financial blow if you get sick, lose your luggage, or experience some other hiccup while abroad.

While single trip travel insurance can cover one-off trips, frequently travelers may want annual travel insurance, which covers all your trips throughout a year. Read on to learn what annual travel insurance covers, how much you can expect to pay, and when you should buy.

Annual travel insurance, also called multi-trip insurance, is a type of insurance policy that protects you from potential losses on all trips in a 12-month period.

An annual travel insurance plans is more expensive than one single trip policy, but annual travel insurance becomes increasingly cost-effective as you take more trips. Buying annual travel insurance is also more convenient than shopping for travel insurance every time you take a trip. As such, these policies are particularly good for people who travel for work.

While annual travel insurance offers more convenience over single trip policies, you forfeit some flexibility offered in single trip travel insurance. For one, annual travel insurance limits the maximum number of days it will cover in one trip . This threshold varies from provider to provider, but generally it's up to a maximum of 90 days.

"During the coverage period, a traveler can move between countries and remain covered on the same insurance policy," says Rajeev Shrivastava , chief executive officer at VisitorsCoverage , a travel insurance marketplace. "With 30-day coverage, the plan is no longer valid on day 31. The traveler needs to return to their home country, resetting the 30 days and allowing them to resume travel."

Additionally, some annual travel insurance policies only cover trips a certain distance (say, 100 miles) from your residence or farther. Make sure to note these limitations before purchasing your policy — particularly if most of your travel is domestic. 

Annual travel insurance coverage varies by plan and provider, but it is generally less comprehensive than a single trip policy.

Annual policies typically include coverage for emergency medical care, medical evacuations, trip delays, and lost or stolen baggage. Most basic plans do not cover trip cancellations (though a few more comprehensive ones do). If you're looking for cancellation reimbursement, you may want to purchase a single-trip plan with cancel for any reason coverage.

Here are just a few things a basic annual travel insurance plan might include:

• Trip cancellation for covered reasons
• Trip interruption
• Trip delays
• Missed connections
• Lost or stolen baggage
• Baggage delay
• Rental car damage or theft
• Emergency medical treatment
• Emergency medical evacuation
• Accidental death and dismemberment
• Repatriation of mortal remains

Limitations and exclusions to annual travel insurance

As we mentioned earlier, annual travel insurance plans are less flexible compared to single trip plans. While this affects how many days are covered in one trip, it'll also limit what you can cover. For one, coverage limits are usually lower throughout the policy.

Most notably, annual travel insurance plans do not offer cancel for any reason coverage . To receive reimbursement for a canceled trip, you must have canceled for a covered reason, such as illness or a disaster at your travel destination. 

Depending on your provider, you may be able to add coverage for adventure sports injuries or purchase an adventure sports-specific policy, as these are not covered by standard travel insurance. 

"Annual travel insurance doesn't cover losses that arise from expected or reasonably foreseeable events," says Daniel Durazo, director of external communications at Allianz Travel Insurance . "If your trips involve high-risk adventure — like skydiving, caving, mountain climbing, or participating in any athletic competition — your annual policy may not cover medical care if you sustain injuries."

Your age, the number of trips you plan to take, where you live, and other factors will figure into the cost of your coverage. For a 30-year-old US resident taking an estimated eight trips per year, all for fewer than 30 days each, annual travel insurance plans cost roughly between $125 and $700 , according to an analysis of plans on travel insurance comparison platform SquareMouth. 

For example, under Seven Corner's travel insurance , one of the companies listed in our guide on the best international travel insurance companies for its long-term coverage, a 30-year-old US resident taking trips to eight destinations (including the US) would pay $375.50 for the annual plan with the lowest annual cancellation limit ($2,500) and $648 for the highest ($10,000). 

"The per-trip length of coverage is usually a determining factor of the cost," Shrivastava says. "The longer the trip duration, the more expensive the policy can be."

Since annual travel insurance plans cover you for a full year, consider purchasing your policy right before your first trip. Strategic purchase dates could help you stretch your coverage period to cover more travels, but don't ignore the drawbacks of this approach.

First, you could forget. A lot goes into preparing for a trip, so leaving your travel insurance until the last minute could cause it to fall through the cracks. If you do opt to wait, make sure you set an alarm or calendar reminder.

Additionally, if you wait too long, your policy may not cover any pre-existing medical conditions. Some travel insurance companies will only cover pre-existing conditions if you buy your policy within 14 days of making your first trip payment.

As Durazo puts it, "Whether you're choosing an individual or annual policy, the best time to purchase insurance is always at the same time as you book your travel."

Assess your travel needs

Annual travel insurance isn't right for everyone, but if you travel often, it might be a good fit. Before you take out your policy, have an idea of what travels you'll take in the next year, and use the following chart to help guide your decision.

"These plans are ideal for frequent travelers such as business travelers, digital nomads, or other avid travelers," Shrivastava says. "They aren't a fit for travelers who are only taking one or two trips per year or someone looking for a more comprehensive range of benefits."

Yes, many policies include an option to add family members when you buy your policy, though. However, terms will vary depending on the insurance provider.

Some insurers allow you to automatically renew your annual travel insurance when it expires, though you can also wait until you're going on another trip to re-purchase. You can cancel annual travel insurance at any time, but you will only receive a refund if you cancel within your policy's money-back guarantee period and your trip hasn't started yet.

Pre-existing conditions can be covered under an annual travel insurance plan as long as you meet certain requirements. Policies often require that you buy travel insurance within a certain number of days from when you placed a deposit on your trip, usually two to three weeks. Additionally, many travel insurance providers require that your condition is stable. 

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What Is Benefits Administration? (2024 Guide)

Updated: Apr 17, 2024, 11:50am

Table of Contents

What is benefits administration, benefits of benefits administration, steps in benefits administration, benefits administration technology, frequently asked questions (faqs).

Companies that offer benefits attract and retain better and more loyal employees. This is because benefits show your employees that you care about them and their goals and well-being on top of their performance. If you have a benefits package for employees, you’ll need benefits administration to ensure that it is maintained properly and used appropriately.

Benefits administration is how a company manages and implements the employee benefits program. Benefits administration usually falls under the responsibility of the human resources (HR) department or a hired professional employer organization (PEO) company . Benefits include things, such as health insurance, retirement plans, vacation time and paid time off (PTO).

The benefits administrator will roll out benefits to employees, often during hiring periods and enrollment periods. Additionally, the benefits administrator manages these programs. For example, the benefits administrator will track vacation time accumulated and used by employees. A benefits administrator must have a good eye for details and be extremely organized, too, especially for larger companies with more than 50 employees.

United Insurance reports that 78% of employees are more likely to remain with their employers because of their benefits plan. This is a critical benefit of having an employee benefits plan. Less turnover means fewer interruptions to business operations, fewer costs of hiring, onboarding and training new people and a consistent staff for consumers.

On top of loyalty, employers are able to find better employees because they offer a benefits program. Prospective employees consider the benefits package to see if it meets their needs. In some cases, prospects will take a position with a slightly lower wage if it has a better benefits package compared to other companies.

Because health insurance is fundamental to most benefits programs, employers also benefit from healthier employees. Employees will go to the doctor more frequently and be able to better care for themselves, reducing the number of sick days taken that can disrupt operations.

Benefits administrators spend their time getting employees enrolled in benefits packages, shopping for better plans and managing the accounts. Here’s what you need to know about the steps involved in benefits administration:

• Shop for plans: Benefits administrators must look to the market for health insurance plans, retirement plans, and more to find the plans that meet employees’ needs for a cost that the company (and employees) can bear.
• Roll out the plan: New plans are usually rolled out in a comprehensive enrollment period. Benefits, such as health insurance, will also have an annual enrollment period. Rolling out the plan involves letting employees know about the benefits and sharing how to sign up with them.
• Manage the plan: Once you have a plan in place, the benefits administrator will manage it. This means that they answer questions that employees may have regarding enrollment in benefits and track things, such as PTO. Benefits administrators may use software to manage this plan. In the management of benefits, each payroll processed would make the proper deductions and credits to the appropriate benefits accounts.
• Maintain compliance tasks: Benefits administrators will help keep the company in compliance with various regulations, whether this is maintaining an appropriate health insurance plan or limiting contributions to retirement plans.

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Benefits administration software can significantly assist a benefits administrator in the daily tasks required to manage the benefits program. This is especially true if the benefits plan is for more than 25 employees. There are different ways to access software. Administrators may get solutions from major software companies, such as Oracle or SAP, or they may have platforms offered by the benefits technology companies, such as Benefitfocus or Zenefits.

The benefits software platform provides a benefits administrator with a resource that tracks each employee and where they are at with enrollment, contribution and use of benefits. Some solutions actually help to match employees with certain benefits selections by assessing their usage of benefits. This is a powerful tool to help benefits administrators help employees get the most out of their benefits packages and keep employees happy.

What are the four types of benefits?

The four major types of benefits are medical, life, disability and retirement packages.

Is it hard to be a benefits specialist?

A benefits specialist is a person who handles compensation benefits packages, such as health and retirement accounts. Though paying attention to details is essential, this is not considered a difficult position.

What are the top three most sought-after employee benefits?

The top three employee benefits are healthcare, PTO and a retirement savings plan.

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Kimberlee Leonard has 22 years of experience as a freelance writer. Her work has been featured on US News and World Report, Business.com and Fit Small Business. She brings practical experience as a business owner and insurance agent to her role as a small business writer.

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Supreme Court halts enforcement of the EPA’s plan to limit downwind pollution from power plants

The Associated Press

June 27, 2024, 11:16 AM

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WASHINGTON (AP) — The Supreme Court is putting the Environmental Protection Agency’s air pollution-fighting “good neighbor” plan on hold while legal challenges continue, the conservative-led court’s latest blow to federal regulations.

The justices in a 5-4 vote on Thursday rejected arguments by the Biden administration and Democratic-controlled states that the plan was cutting air pollution and saving lives in 11 states where it was being enforced and that the high court’s intervention was unwarranted.

The rule is intended to restrict smokestack emissions from power plants and other industrial sources that burden downwind areas with smog-causing pollution. It will remain on hold while the federal appeals court in Washington considers a challenge to the plan from industry and Republican-led states.

Writing for the court, Justice Neil Gorsuch said the states are likely to win in the end, among the factors justifying the court’s decision to block the plan for now.

In dissent, Justice Amy Coney Barrett was joined by her three liberal colleagues. Barrett said she doubted the states and industry would ultimately prevail.

Yet the high court’s order, “leaves large swaths of upwind States free to keep contributing significantly to their downwind neighbors’ ozone problems for the next several years,” she wrote.

In a statement, the EPA noted that court’s action was not a final decision. “The EPA is disappointed in today’s ruling, which will postpone the benefits that the Good Neighbor Plan is already achieving in many states and communities,” the EPA said.

The Supreme Court, with a 6-3 conservative majority, has increasingly reined in the powers of federal agencies, including the EPA, in recent years. The justices have restricted the EPA’s authority to fight air and water pollution — including a landmark 2022 ruling that limited the EPA’s authority to regulate carbon dioxide emissions from power plants that contribute to global warming. The court also shot down a vaccine mandate and blocked President Joe Biden’s student loan forgiveness program .

The court is currently weighing whether to overturn its 40-year-old Chevron decision , which has been the basis for upholding a wide range of regulations on public health, workplace safety and consumer protections.

Three energy-producing states — Ohio, Indiana and West Virginia — have challenged the air pollution rule, along with the steel industry and other groups, calling it costly and ineffective. They had asked the high court to put it on hold while their challenge makes it way through the courts.

The challengers pointed to decisions in courts around the country that have paused the rule in a dozen states, arguing that those decisions have undermined the EPA’s aim of providing a national solution to the problem of ozone pollution because the agency relied on the assumption that all 23 states targeted by the rule would participate.

The issue came to the court on an emergency basis, which almost always results in an order from the court without arguments before the justices.

But not this time. The court heard arguments in late February, when a majority of the court seemed skeptical of arguments from the administration and New York, representing Democratic states, that the “good neighbor” rule was important to protect downwind states that receive unwanted air pollution from other states.

The EPA has said power plant emissions dropped by 18% last year in the 10 states where it has been allowed to enforce its rule, which was finalized a year ago . Those states are Illinois, Indiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and Wisconsin. In California, limits on emissions from industrial sources other than power plants are supposed to take effect in 2026.

The rule is on hold in another dozen states because of separate legal challenges. Those states are Alabama, Arkansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nevada, Oklahoma, Texas, Utah and West Virginia.

States that contribute to ground-level ozone, or smog, are required to submit plans ensuring that coal-fired power plants and other industrial sites don’t add significantly to air pollution in other states. In cases in which a state has not submitted a “good neighbor” plan — or in which the EPA disapproves a state plan — the federal plan was supposed to ensure that downwind states are protected.

Ground-level ozone, which forms when industrial pollutants chemically react in the presence of sunlight, can cause respiratory problems, including asthma and chronic bronchitis. People with compromised immune systems, the elderly and children playing outdoors are particularly vulnerable.

Copyright © 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

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