After meet­ing with thou­sands of small-busi­ness own­ers in my career, my expe­ri­ence is that less than 2% of them have an annu­al plan. Yet when I ask clients what stands out about our work togeth­er, while each has a dif­fer­ent laun­dry list, they all include the annu­al plan­ning process as one of the most trans­for­ma­tive elements.
They say things like the following:

— I can’t believe I lived with­out a plan for so many years. I don’t wor­ry about large equip­ment pur­chas­es any­more because they are in the plan.

— Because I’ve done the work of build­ing an annu­al plan with my team, I hire with confidence.

— Every­one in our com­pa­ny is clear about where we are going. The ener­gy has nev­er been high­er. It’s in the plan!

I am not alone in my love of plan­ning. Here are a few of my favorite quotes:

“You can’t build a rep­u­ta­tion on what you’re going to do.” — Confucius

“A goal with­out a plan is just a wish.” — Anonymous

“Suc­cess doesn’t just hap­pen. It’s planned for.” — Anonymous

“For tomor­row belongs to the peo­ple who pre­pare for it today.” — African Proverb

“An hour of plan­ning can save you ten hours of doing.” — Dale Carnegie

“The long way is the short way.” — Ryder Carroll

On aver­age, I find that our annu­al plan­ning process takes ten to twen­ty hours of a busi­ness owner’s time. In return for this invest­ment, he or she receives three sig­nif­i­cant returns: team engage­ment, ener­getic focus, and time savings—in oth­er words, a lot! Any one of these three is worth ten to twen­ty hours of a busi­ness owner’s year. Plan­ning is a huge time saver and lays a foun­da­tion for success.

Here is how annu­al plan­ning saves time and keeps you focused. By tak­ing the time to lay out exact­ly how you expect the year to go, your month­ly finan­cial review is about com­par­ing results rel­a­tive to your plan. If you are “on plan” or bet­ter, super! Keep doing what you are doing. Serve up a “Way to go!” and get back to your per­son­al pri­or­i­ties. If you are “off plan,” go direct­ly to the per­son who is respon­si­ble for that sec­tion of your plan and talk with him or her about course cor­rec­tion. Mutu­al­ly agree on what is need­ed, whether it’s more dig­ging into the issue, tak­ing imme­di­ate action, or some mix­ture these two things, along with a time line. Each month you’ll see if the changes you made are work­ing rel­a­tive to your plan.

Busi­ness own­ers with­out a plan com­pare their progress to last month or last year. Was last month or last year so fan­tas­tic you can’t imag­ine doing better?

Last year is a ter­ri­ble mea­sure by which to gauge your suc­cess. If your indus­try is grow­ing at 15%, then you must grow at 15% or more just to keep your cur­rent mar­ket share. With­out a plan, you and your team are high-fiv­ing your­self over keep­ing pace with the econ­o­my. With plan­ning, you’d expect a min­i­mum of 15% growth, and you’d mea­sure the busi­ness against that yard­stick. On the con­trary, if your indus­try is con­tract­ing, with­out a new strat­e­gy, you are going to find your­self in down­size mode was well. Plan­ning may very well be your key to survival.
A busi­ness is a dynam­ic organ­ism, and, as such, it is always evolv­ing. There is no such thing as a busi­ness that doesn’t need improve­ment some­where! Even if last year was your best ever, there’s some part of your busi­ness that is lag­ging. By mak­ing a time invest­ment in a plan, you can quick­ly and eas­i­ly iden­ti­fy and course cor­rect for the lag.
Don’t be one of the 2%. Low­er your stress, engage your team, focus your ener­gy, and save time by begin­ning each year with clear goals and a plan to achieve them.