Yes, it’s that time of the year again – you’re not far from the 4th quarter and perhaps feeling the pressure of annual revenue and profitability targets that are not assured to be a done deal. Now next year’s budget is already looming on your To Do list. What’s going to make next year’s numbers look different from this year’s results? If you want something bigger and better next year, you need to do your plan before you set your budget.

If you are getting ready to establish a financial plan for next year and you have not yet developed short and longer-term goals for your business, you are missing some key input sources for your budget. Without an overall plan, how do you know the proper allocation of your resources? Do you need to move funds toward marketing or toward capital investments? How much more cash will you need to retain to fund growth or research and development? If you only clone and then tweak last year’s budget you’ll wind up with next year a clone (perhaps tweaked) of this year. At best.

First, are last year’s results good enough to earn a do-over? Second, is that even possible for you to do? The market is changing, your competitors are gaining ground, technology and workers are changing. If you think your business is going to chug along the same track as though nothing has happened, you’re probably deluding yourself.

A full-blown strategy incorporates information from inside and outside your business. Some of that information might warrant some fairly significant departures from your current practices, perhaps even a change in your business model. You will wind up with a better plan if you have some outside resource (like a coach) to help you through it. Not that you don’t know what you’re doing in your business – the outside resource is to be the keeper of the planning process. They help you participate fully with your team in the construction of your plan, and along the way help to make sure you’re not missing any important components.

Keeping it simple

If you want to stay the same path overall, but with incremental improvement, here’s what you need:

  • Big picture – What’s your vision 10-30 years out? Your guiding purpose?
  • Nearer picture – What’s your 3-year target? What moves to you need to make to get there?
  • What has to happen next year to take you closer to the 3-year target?
  • How will you execute?
  • How will you measure progress?

THEN you develop a budget, and sales and marketing plans to support the overall plan.

No time to plan?

Stephen Covey calls planning a Quadrant 2 activity – it is not urgent (pulling at you) but it is important. If you don’t plan now you will be more likely to be reacting later. Reaction is more expensive than prevention. If you don’t plan first – and we know you don’t have a bunch of extra time floating around – you’ll spend more time downstream making decisions because you don’t have research and resources at the ready.

Who’s in on it?

Savvy CEOs involve their senior teams. Even smarter CEOs find ways to incorporate input from additional stakeholders like mid-managers, key customers, or other constituencies. This is important because people are motivated to pursue their own ideas. The more the plan shows evidence of their input, the more excited they are about helping it happen.

You don’t have to do this by yourself. We can help.