The real cost of believing “I can’t plan that far ahead”

As a business strategist who specialises in helping micro business owners with annual planning, I’ve lost count of the times someone has turned around to me and says, “I can’t plan that far ahead”. I understand why people say it, if you’ve never created a plan for the year ahead, it can feel like a long time, and in a world where things change so fast in business, you might feel justified in thinking it doesn’t even make sense to plan that far ahead. But I also know that if you believe you can’t plan that far ahead and therefore decide not to bother creating an annual plan, then your business, and you, will pay the price. Keep on reading to find out what the real cost of believing “I can’t plan that far ahead” is.

 

 

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THE REAL COST OF BELIEVING “I CAN’T PLAN THAT FAR AHEAD”

 

 

Planning a year ahead is normal for lots of businesses

Before going into detail about the real cost of believing “I can’t plan that far ahead”, I want to first make it clear that lots of businesses are planning a year or multiple years ahead. Businesses, both for-profit and not-for-profit, are required to create plans and projections that show the intended future of the business for the upcoming year or years. If you are looking for external funding, whether it be from investors or a bank giving you a loan, then it is standard to have a plan to show what difference that money will make. If you are bootstrapping your business (aka not taking money from external sources), then there isn’t a requirement to plan in advance, but that doesn’t mean it isn’t a smart thing to do, and if you don’t, it will cost your business.

 

Cost 1: You can’t budget properly, so you don’t know how much you can spend growing the business, what profit you expect to make and how much you’ll be able to pay yourself.

If you don’t have a plan for the year ahead, then you can’t create a financial forecast for the year ahead either. This creates issues for multiple reasons.

1 – Without a financial forecast, you don’t properly know how much you can spend to grow your business. You might be considering growing your team, investing in tech or hiring a mentor, but without a financial forecast you can’t properly assess the financial implications of those investments.

2 – Looking at your income and expenditure on a monthly basis isn’t the best way to do it if you’re tax on an annual basis. If your business is taxed on annual profit, then it makes to do your financial forecasting for that year. This means the highs and lows of different months can be taken into consideration and you’ll actually have an idea of at the end of the year what income has been generated and what expenditure there has been. This will mean you can estimate your gross profit and your expected tax bill. This will enable you to understand what your potential net profit figure would be. And knowing that might mean you make changes throughout the year (spending a bit more as you are confident you’ll be able to) or that you are building healthy reserves that extend your business runway.

3 – If you haven’t done financial forecasting for the business, then it will make it very difficult to estimate what you are going to be able to pay yourself and when. This could put unnecessary extra stress on you personally that can be avoided. When you’ve taken the time to do a budget for the year, you can be more confident about what the business should be able to pay you (or the money you can take out) and when.

When you have a plan for the year ahead, you can map out a budget to go alongside that. Obviously, the year might not follow that exact plan and budget. But you’ll have clear financial goals and an understanding of what you can spend, what profit that should leave the business with and what you personally are going to be able to take out of the business.

Cost 2: You treat each month the same and don’t make the most of seasonal fluctuations

If you don’t have a plan for the year ahead, then it’s easy to treat each month the same. At the start of every month, you have the same financial goal as you had last month, you do the same things month after month and expect the same results. The reality for most businesses is that there are seasonal fluctuations. For example, you could be a B2B marketer who knows that in August things quiet down as people are on holiday. Or you could be a fitness coach who knows in January lots of people have set a New Year’s Resolution to ‘improve their health’. If you ignore these seasonal fluctations, or don’t consider them far enough in advance, your business, and you, will pay the price.

1 – If you don’t look more than a month ahead, then you aren’t going to be prepared for a quiet month. When you plan a year ahead, you can identify in advance what are your quiet months and plan strategically around them. This can look like redesigning your offer suite and pricing so that you have offers that last a longer period of time (and mean you are still working during a slower period) and/or you could decide to offer a pricing structure where people pay multiple times so that the cash comes in over an extended period of time. Another option is when you know a slow month is coming you decide to use that as time to take off, or time to prioritise other areas fo the business. For example, a slow period may be the time you decide is perfect for onboarding new team members or changing your tech stack.

2 – On the reverse, by not looking more than a month ahead, it might also be that you aren’t prepared to make the most of a peak month. In a peak month, if you reach max capacity, then your income is capped by capacity. If you are aware of peaks, and plan in advance, you can make changes to increase capacity. This could be hiring, minimialising all non-timely tasks during that period or time, or even deciding to work more.

Looking at the year as a whole allows you to focus on the yearly rhythm of your business, and the longer you’re in business and the more you look at your data, the more you’ll see it. A record-breaking year doesn’t mean every single month needs to have year-on-year growth. Looking at your year can enable you to choose a few key moments where you know there is more money to be made and ensure you have the marketing to build demand and capacity to deliver. And when done right, it can mean you can work out how to take off even more time than you took this year.

 

 

CREATE A STRATEGIC PLAN FOR YOUR BUSINESS OVER THE NEXT YEAR – IN JUST ONE DAY! I’m the Annual Planning Queen and I specialise in helping micro service-based business owners plan for the year ahead. By booking a Strategy Day with me, I’ll ensure you have a powerful and productive annual planning experience where we consider all the major elements to ensure you can achieve your goals for the year ahead. All you have to do is secure your date, block it out in your diary and get ready to be guided through my signature annual planning framework that guarantees that, by the end of the end of our time together, you’ll have a clear roadmap to achieve your goals and be excited for the year ahead. For all the information and to book a Strategy Day click here.

 

 

 

Cost 3: You take longer making decisions because you have no clear direction

 

A key part of creating an annual plan is setting goals for the year ahead and that gives the business a clear direction, which makes decision-making easier and faster.

 

When you don’t have a clear direction for the business making decision can take a lot longer than necessary. As a business owner, you are constantly having to make decisions. Every day there will be numerous things you could do in your business. Opportunities are bound to be coming your way all the time. But you have to make a decisions, based on the limited resources you have, about what to say yes to and what to say no. Without a goal and a plan those decisions are either going to be made based on how you feel, or to properly consider they are going to take more time.

 

When you have a plan for the year ahead it’s easy when making decisions to see if this is support everything else in the business and moving the business forward in the right direction, or whether it is actually a distraction that will moving the business in another direction and likely to dilute the impact.

 

Cost 4: The business stays exactly the same for another year

Having the intention for your business to grow, or change, and that actually happening are two very different stories. This is especially true the more established, and busy, your business is.

 

You set the intention for something to change. To increase revenue. To make more profit so you can personally take home more. To do more of the work you love. To get rid of the nightmare clients. But then you didn’t have a plan for how that would actually happen. Instead, you kept doing the work. The money kept coming in. The diary kept being busy. You might have kept the clients you don’t really like. You might still be getting referred for a service you don’t particularly like delivering anymore. You end the year in the same place as last year. And that might not sound like bad, but what is that costing you?

 

Does it mean you are questioning whether you really have the ability to change your business and make it better?

 

Does it mean you’ve paid yourself the same two years in a row when the cost of living has gone up?

 

Does it mean you are building more resentment to a specific offer, a client or even your business in general?

 

Change doesn’t happen by accident. Especially not if you are established, are known for something, get referred and are busy. In that situation, you need a plan, otherwise, each month will roll by and you’ll keep doing the exact same thing and getting the exact same results.

 

CREATE A STRATEGIC PLAN FOR YOUR BUSINESS OVER THE NEXT YEAR – IN JUST ONE DAY! I’m the Annual Planning Queen and I specialise in helping micro service-based business owners plan for the year ahead.   By booking a Strategy Day with me, I’ll ensure you have a powerful and productive annual planning experience where we consider all the major elements to ensure you can achieve your goals for the year ahead. All you have to do is secure your date, block it out in your diary and get ready to be guided through my signature annual planning framework that guarantees that, by the end of the end of our time together, you’ll have a clear roadmap to achieve your goals and be excited for the year ahead. For all the information and to book a Strategy Day click here.

 

 

That’s it. You now know the real cost of believing “I can’t plan that far ahead”.

 

Creating an annual plan won’t mean that you have no problems in business and that the year will happen exactly as per the plan. But it can make a huge difference

 

It can help you to financially plan for the future so you feel more confident about your business financial situation, making investments in the business and paying yourself.

 

It can help you to ensure you think about the year as a whole and the seasonality of your business. That will mean you can mean you are prepared for the busy and the quiet periods, and ensure you take sufficient time off.

 

It can help you to make decisions faster and better as you can understand how it fits in with the direction you are moving towards and the current approach.

 

It can help to ensure your business actually changes over the next 12 months. So that rather than wishing it was better, it actually gets better.

 

As you can see not planning a year ahead is costing you in multiple ways, but the great news is I’ve made it super easy for you to be able to create a plan for the year ahead in just one day.

 

I’m the Annual Planning Queen that has helped hundreds of business owners with annual planning and I have a proven process that means you can create your plan for the year ahead in just one day.

 

You can do it one-by-one with me, or multiple times a year I run group planning days. For all the information click here.

 

 

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