Annual Strategic Planning and Projection Development
Annual Strategic Planning and Projection Development
The year is coming to an end and Andrew and Damon are here to discuss the annual strategic planning for next year.
In this week’s Exit Your Way Roundtable episode, Andrew Cross and Damon Pistulka covered the steps business executive teams can use to perform their strategi planning for the upcoming year. This episode is the first of a 3-part series where Andre and Damon will cover strategic planning, projection development for variable costs, and projection development for fixed costs to project the net income.
The conversation of the episode started with Damon and Andrew sharing the annual strategic planning and how people should plan it out already. After this, Andrew shared a presentation with the audience.
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Moving on, Damon mentioned that annual strategic planning and projection development is something that every business owner doesn’t look forward to. Adding to this, he also said that without this planning you usually don’t know where you are going and if you don’t know that, your team also doesn’t know that.
After this, Damon also said that usually, business owners look forward to 10% to 15% growth per year. However, if you plan ahead, 30% to 50% growth is also not that hard. Andrew added to this and said that when you don’t have your planning done right, you won’t be able to sell your business at the right value as well.
According to Andrew, being the head, CEO, or visionary of the company, you always have to reassess the situation around you and your company. With this Andrew also shared an analogy of a person climbing a mountain. He said that the person doing the annual strategic planning actually climbs a mountain and assesses his progress every step of the way.
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The conversation ended with Damon thanking Andrew and the audience for their presence.
people, business, andrew, team, talking, understand, planning, destination, brad, year, results, thinking, projections, sales, goals, mark, linkedin, process, timing, refine
Damon Pistulka, Andrew Cross
Damon Pistulka 00:00
You can tell you got a new camera on yours. That’s awesome.
Andrew Cross 00:02
Yeah. Is it better?
Damon Pistulka 00:04
much clearer, much clearer. All right, I’m gonna get us live on LinkedIn here, and we’re going to get started All right, everyone, welcome once again, we are back with another round of the zero, a business roundtable on Thursday. I’m Damon Pistulka, my co partner in crime. Andrew Krause and I are going to talk today a little bit about annual strategic planning and projection development. I hope that if you have not been doing this, you’ve been thinking about it, because it’s something that well, we think is pretty important. And we know it helps a lot. So, Andrew, thoughts for the day so far?
Andrew Cross 00:49
Now? Yeah. You know, I mean, it’s that time of year, right? Yeah. How did we do? We’re closing in on 2021. What are we going to do for next year? What went right? What went wrong? Yeah. And so fail this, is this a little chance to talk about that, and how we do it. And and we’re doing this for our clients, and helping them develop their strategy? Yeah. Yeah. I’m excited about this. I like this topic. Um, you know, and I think, in David, and I, you know, as partners, we’re small business, but we’re doing this for ourselves, you know, right at this time. So this is this is real time and love to share, share what? What we’re into?
Damon Pistulka 01:36
Yeah, yeah, we geek out over this stuff. It’s fun. But more importantly, it really, really helps. So I want to bring up a presentation here, we’re gonna get talking about this thing. I just want to say if you’re listening to us on on LinkedIn, go ahead and drop in the comments where you’re listening from, if you get any questions, go ahead there. And we are going to get started.
So I’m going to share the screen now. And we will get going. So now I am going to hopefully, there were sharing there, and I’m seeing it there as it looked good, Andrew. Yep. All right. Okay. Not necessarily good, but Right. All right. Well, as we as we are talking, you know, strategic planning and projections development is something that every business owner, I think not every but most business owners don’t necessarily look forward to. But they often understand the importance of win. Do you agree with that? Andrew?
Andrew Cross 02:40
I would, but I do think it’s, it’s often overlooked and maybe even bypassed or put off? Yeah. So and, you know, I think here, this is it. Why is that too? Because I think that, you know, going through this too, we want to see away it’s this isn’t something necessarily to, to, to put off or procrastinate against. If it’s done right, you can, it can be also fulfilling?
Damon Pistulka 03:08
Yeah. It’s not that hard. That’s the thing that we hopefully by showing the simple steps today. And in the next couple of these that we’re going to do before the end of the year, we’re going to walk through today we’re going to talk about basically the strategic planning and kind of what that’s going to look like. The next one we’re going to talk about the the part about, okay, we’re actually going to start putting our projections together.
And and then in the final one, we’re going to refine them, and we’re going to get get down and dirty and lay them out. And so we can communicate them with the rest of our teams. So, alright, let’s get going. So have you read good strategy? Bad strategy by Brad? No, I haven’t. But that’s what I’m going to write down. That’s for sure. Good, thanks. Yeah. Thanks for sharing that, Brad. All right, it’s
Andrew Cross 04:01
bad strategy. Brad Smith recommends that sounds great.
Damon Pistulka 04:05
Good strategy, bad strategy. Brad’s recommending that. That’s good. So why the heck are we gonna do this planning that and I liken this, people go, Oh, yeah, this is a lot of work and things like that. But the one thing about strategic planning. Do you go somewhere in your car without knowing where you’re gonna go? I ask that, you
Andrew Cross 04:31
know, somebody is gonna say yes to somebody.
Damon Pistulka 04:35
Just go out for a leisurely drive. But most of the times you’re not right. You know where you’re going. So why are you running a business? Like driving your car, not knowing where you’re going? I mean, you got lots of times, there’s millions of dollars at stake, but we’re driving it like you don’t know where you’re going. And if you don’t know where you’re going, your team certainly doesn’t know where they’re going. There’s no right Andrew
Andrew Cross 05:00
That’s absolutely right. That’s the other question that needs to be answered. But why? I understand I think it’s overwhelming, you know, especially because, you know, going through this process with many, many companies, yeah. You know, when people try to do it, you know, I mean, a strategic plan a properly done, you know, well put it on paper well done, kind of thing that you understand and everything else. And you’re looking ahead five to 10 years. That’s the overwhelm, right? There’s, you know, but that’s, you know, we’ll go on here a little bit. Yeah. How do you back off a little bit? Simplify? It doesn’t, it’s not as bad as it looks?
Damon Pistulka 05:45
Exactly, exactly. Take the simple steps. It’s and, and you will see that if you lay out the plan, you will go much farther than if you didn’t, even if you don’t reach your goals, you’re going to get much further than you would have without them. But it is it is like driving a car without knowing where you’re going. I just want to
Andrew Cross 06:08
Well, I think too, it’s we got to acknowledge there is an end. And you know, there’s again, we will come back to that. That’s the exit. Everybody, at some point is going to be out of their business. Yeah. You know, like it or not 100% 100%
Damon Pistulka 06:25
rate, that’s for sure. Yep. Auto welcome. Everyone else has joined us Aaron, Marburg Mark strumenti, Pete Alexander, also Brad and Troy and and David for being here. If I missed somebody, sorry, speak up in the chat. I want to also thank everyone that’s listening. John, who’s listening to us over on LinkedIn live. A John John works with hop tests. If you if you are in a company that needs a high quality, I shouldn’t say high caliber planning and scheduling man that are Tesla’s got a crazy, crazy good tool for that button we’re moving on. So
Andrew Cross 07:06
hey, I think to a good audience today, anybody who raise your hand, if you want to jump up here? And yeah, you’ve got a lecture here. So have you if you’ve got some input on this particular subject? We do? We’d love to hear it.
Damon Pistulka 07:21
Yeah, yeah, this is great. And Brad said something, I think that that is really pertinent. He said, If and the planning is done, well, you can double your growth rate in a year, there’s no doubt about that. A lot of people lump all lump along without a plan, they’re going to grow 10 15% a year, but growing 30 50% is not that much harder. If you plan and do it, execute it, right? That’s for sure. And Mark said, most people have a hard time visualizing 10 years in the future, that’s for sure. When we look at our plans, it’s usually this year, next year, it gets fuzzier, the third year gets fuzzier. But really, when you’re looking at this planning work, what are you going to get from this?
What are you getting from this, you’ll you’ll get? You’re going to get a clearer picture of what what you’re going to be doing. When you’re going to do it? How will they? How will this affect our finances? What are the results we should see? And when should we see those results? And don’t you think Andrew that that helps a little bit when you’re trying to figure out the the overall, you know, goal for your business or the projection for your life in the business? And those kind of things?
Andrew Cross 08:37
Oh, absolutely. You know, and I got to say, two of the one of the things you get out of this is if you don’t have this many, many businesses don’t. You know, it’s gonna be very difficult to sell your business as well. And it’s not only having a strategic plan, it’s also it this is a working, that the plan is a living animal. It’s it’s yeah, it’s got to be updated. It’s got to be checked back into and then readjusted.
Yeah. And really what you get out of it, too, is because you’ll, you when you sit back and really look at the picture from a high level will say, wow, we really wasted maybe we turn these resources into this effort. We spent 80% of our resources on this one and we’re banging our head against the wall, you know, you can make those kinds of strategic decisions that will completely change your life.
Damon Pistulka 09:29
Yeah, yeah, that’s for sure. That’s for sure. And and you bring up a great point. And as we get into our last part of this three part series, we are going to talk about how you work through this throughout the year because if you’re not taking your annual projections and putting your actuals in when the month is finished, and seeing Hey, how did I do compared to what I thought and going over that with your team, you’re missing a huge opportunity in in the overall process. It’s gonna be fun when we get to that point as well.
So this is pretty self explanatory. But it’s this simple. It is, you got to start thinking about what’s going to happen. You got to think about when it’s going to happen, what are some of the things that that you’ve seen that that you want to do next year? But it starts with thinking about where do you want to be? Where do you want to be? Where does the business need to be? If you’re the CEO, if you’re the owner, if you’re the executive, the highest level executive in the business, where do you want it to be? Andrew, how do you think helps by starting at this point?
Andrew Cross 10:38
I think this is the intimidating, you know, factor, you know. And it shouldn’t be. And I think if you pull it back, and Damon’s absolutely right, you start thinking about the year ahead, we’ll pull it back a little further. Think about the next 90 days first, that’s the clearest about what’s right in front of you. And it chunks up this really massive, kind of undertaking to find out where you want to be and start with those goals. But yeah, you know, and after you’ve done it, you first you start from the end, and then work your way back. How
Damon Pistulka 11:13
do we exactly we’re going to go through that process that you start with thinking, it’s like, hey, could be as simple as we’re at 10 million in revenue this year, I want to be at 12,500,000 Next year, or I want to add 10 new customers, and that’s going to generate this amount of revenue. But it starts with thinking about that thinking about where you want to be. And in this process again, and there’s some great people on on here that Brad was just asking it. What is possible, don’t think about how don’t think about limitations at this point.
Think about where could we be? What is possible? If we did all the right things, and the wind blew the right way? How? Where could we get to start there? Brad is great about this, where can the business reach? Then we work on how but it starts with thinking. So again, we’re planning the destination, hours love putting mountains in these in any presentation. Because when you consider the sheer difficulty of climbing a mountain, and the fact that so many people do it, even though it’s it’s literally, they don’t know how they’re going to make the next step.
Most of the time when you get near the top, that I always love this because you have to think of that destination like where are we going? It really has to think about what’s it going to be like when we get there. And then you can work backwards, as Andrew said. So when you think about this, Andrew, what are some of the things that you see people doing? When they look at the destination? Is it they shoot too far? Not enough? They don’t think clearly enough about it? What are some of the things?
Andrew Cross 13:04
Yeah, well, I think this is a, you know, this comes back to vision, you know, and, and as a leader in the company, the owner, or the CEO, or the top level guy, even the visionary. You know, it’s it’s really important to to on a consistent basis to reassess this. Yeah, you know, so many, there’s so many things involved in your there’s so many other roads that you’re heading down.
That, you know, next thing, you know, you went around the mountain you didn’t. Yeah, you know, it’s it’s doing that because you got to get it, you got to get it straight in your own head. And, and, and be able to make sure that your organization and your team behind you understands what this is. Sounds simple. It’s not. It’s not Yeah, instantly relooked at reinforced, because because of all the other shiny objects that are distracting you with. Yeah, yeah.
Damon Pistulka 14:09
I just love the comments coming in here. They’re so great. You know, Aaron, they’re in love as a mountain. That analogy because Aaron’s been up in here a few times, Mark talks about focus, which is awesome. It does help you focus figuring out where we’re going. And then this is great from Ron, if you don’t know where you’re going, then any path will get you there.
Andrew Cross 14:29
Yeah, well, I think I think too, a lot of people, you know, think that, you know, know what their vision is, and they assume everybody else does. And they actually assume they know and when you sit down and actually go through this exercise to reassess that. You realize, wow, you know, it’s not really what I thought it was. But I think one of the most interesting things you can do is go ask, go ask your your your wife, what the vision is, what their opinion is, go ask your you know, somebody you trust or your employees, your your partners, get on the same page, you’ll be really interesting go through the exercise and understand what the answers to those questions.
Damon Pistulka 15:11
Yeah, we’ve got Dwight Smith on on. LinkedIn also says the best way to predict the future is to create it. And it’s right if you don’t need it, if you don’t see where you’re going, you won’t get there more. It’s so and the other thing that I’ve seen too, and we’ve had a couple clients that that were kind of hesitant and doing this over the years, because they’re like, Well, what if we don’t get there? Well, if you lay the goal out, and you said that, hey, I want to be an Olympic athlete, I want to be a, you know, elite level triathlete.
And you get to the point that you can run a marathon, that’s, that might be 10 times farther than you ever want to get without putting that goal out there and trying to get their Android mark. So we’re gonna continue on. But Mark says another good point about this is everyone in the company needs to know. Which speaks to communication, you need to say it 1000 times exactly right. In the end, in the last March, we’re going to talk about this. But this is a process where you’re going to start as the highest level executive with the destination and reflection. But then it’s time to start bringing your team in, isn’t it right, Andrew?
Andrew Cross 16:27
Absolutely. And I think too, there’s a, you know, a good book, The Art of the Start, Kawasaki and he’s getting that because they’re working with startup companies at the beginning to really understand, you know, it’s not a tagline. It’s the mantra, you know, what, what is it that we do? You know, not the tagline for those people, you know, and that’s really interesting. If you can get there and everybody, you know, the first things out of their mouth, you ask what they do is the mantra, then, then, you know, you’re you’re down the road, you’re really I mean, you’re going that you’re going there.
Damon Pistulka 17:03
Yeah. So once you’ve once you’ve figured out your destination, you laid it out, we’re going to be a $12,500,000 company this year, we’re going 25%, we’re going to add this many new clients to do that, then you start to reflect on what worked well, this year. What didn’t work? Well, where are we at now. And this is this is sped up a lot if you’re doing good KPIs and having good, good meetings with the teams, but this is something that you really need to understand is where the heck are we now?
What was working well, and what wasn’t? Because it’s going to start to show you where I can accelerate faster. And what I need to shore up potentially this to keep going with what we want to do. But this reflection step is very good. And when I’m talking about this stuff, when you set your destination, write it, write it
Andrew Cross 17:57
down. say that’s it. You got to it’s got to be written down. Yep. Gotta be memorialized. Yeah, we got it back ago. What was I thinking? Last year?
Damon Pistulka 18:09
Yeah. When we’re at the end to I’m going to show you an example that we use, it’s really pared down. But But it’s easy and simple to use. But this reflection point is something that you need to have, and you need to document this is what worked well, this is what didn’t, and because that’s those are some of the things that you’re going to be able to use or address you need to address moving forward.
Andrew Cross 18:31
Yeah. Well, I think too, that one of the things about this, that makes it work is what’s really hard about this is that the owner that we’re talking about this specifically for owners, business owners, and and they’re, you know, I think in your mind is a really disciplined business owner, if you can get out of your head, you know, it treat it like I’m accountable to somebody like if you know, in big companies have very well documented and discipline strategic plans, they have to otherwise their investors, but treat this business, even though I’m, I’m in the CEO chair, but I’m answering to my stakeholders. So I’m eternal.
So I’m, you know, looking at what we planned for last year, and I’m, I’m going to talk about it this year and make a good assessment for it. Because in actuality, that’s really what it is. You’re, it’s not just you, you are accountable to your employees, to your family, in all those things. So
Damon Pistulka 19:30
yeah, I like Brad’s comment here is is is it a hobby or a commitment? That’s, that is the issue. And in the the fact that matter is there’s a lot of the probably the vast majority of businesses don’t even do annual planning.
Andrew Cross 19:46
Yeah, no, and I’m not talking about, you know, a one, you know, you know, one person or two person or solopreneur or five employee. I mean, this happens with, you know, people at 5060 employees, you know, Running up 60 million a year. facilities all over the place. You know, if you did, why do it? You know, one of the they don’t do it. One of the reasons to do it is though that accountability part two is if your people see that you hold yourself accountable to the stakeholders, then then they that’s their motivated. Yep. Get some my there behind you that.
Damon Pistulka 20:23
Yep. Yep. Good stuff there, Andrew. So once you’ve done the reflections, and you, you know, where you’re going, you’re like, Okay, what’s working? Well, what’s not, you got to figure out? What the heck are we going to have to do to get to our destination?
Andrew Cross 20:37
That That’s actually me there? That’s you working out there? That 100 Push up there? Yeah. Yeah, you can see it, yeah. picture of you from the other day. But it does take
Damon Pistulka 20:52
action, you’re gonna have to figure out what’s gonna, what’s gonna happen. And again, you you’ve done the you’ve done the you set the destination, you’ve been reflecting on it, you brought your team and at this point, and now we’re going to say, this is where we’re going to go? What do we need to do? We have to think about how many customers are we going to need that? What kind of operational changes do we have?
What are you know, we’re getting people process equipment, going through those things? And then, if we’re doing this, what if we’re going to take this action? What kind of results should we see? And when? And you’re getting your team involved in this? You’re going? Because if we’re going to grow by this much, how are we going to do it? Yeah, with your salespeople, if your your demand is going to grow this much? How are you going to accommodate that in your operations?
Andrew Cross 21:41
How much is it going to cost? You know, there, you know,
Damon Pistulka 21:46
yeah, into the finance part of it.
Andrew Cross 21:48
But this is training, you know, this is a great metaphor, you know, right here. I mean, it is it is it is physical training, that you need to do on your business. Yeah, I will add, I would like to say that, this seems like a lot, you know, and there, but you’re there are trainers, there are people who can help you do this, Brad Smith in the audience is one of them, you know, and, you know, you’re not alone.
Damon Pistulka 22:15
When you do this, getting your team involved involved is critical. Because they will buy into this, if they have a say in what will happen and how it will happen. Yo, and as a leader in this, we have to be sure that we are not allowing self imposed limitations to be slowing us down. We can’t do that is not something that we want our team or us to be saying. We have to say, how do we do that? How can we do that?
We have to keep everything in that light, because we can stop ourselves tomorrow if we want to. Or we can go to tremendously different levels if we if we take the right actions and work on them in the right ways. So awesome stuff. Andrew, let’s go to the next one. Then it’s pretty simple. What do we need to do that? We need? And it comes down to the big three, doesn’t it? Andrew?
Yeah, yep. The people. People process.
Damon Pistulka 23:21
Whitman. What do we need there? Yeah. The
Andrew Cross 23:25
people the process? Yep. And the and the tools? Yeah. Yep. People, the people need their tools, you know, and even in service businesses, everything else every week, we come back to the manufacturing, you know, is where we’re coming from, you know, and you learn how that you know, everything processes through their people, that people, you know, show up to do their work that they have to have the right tools that takes investment and time. Yeah. Yeah, you got to go.
Damon Pistulka 23:55
And this is gonna happen in any business. It’s like this in any business. It really is. It’s it’s not necessarily just manufacturing, you know, because we’ve got equipment and inventory and other things. And in a law firm, and in any other kind of medical clinic, it’s all the same. It’s people process equipment, and it works through there and understanding what’s going to take to do that when, and then the resources, you’re going to need to get to where you want to go.
Andrew Cross 24:23
Yeah, I think one of the reasons we know this too, because in the business we’re in, we sell businesses, so the buyers come in, and this is when they go to they do their own valuation of the company. They come in and assess and they kick the tires, they want to look what they’re buying. These are the areas they focus on. And it’s Yep, it’s not just a financial decision for them.
Damon Pistulka 24:46
Yeah, definitely, definitely. And Marx said something about fractional CEOs or Eos, integrators can help with this kind of stuff. He’s exactly right. You know, integrators are key in a business because there’s a lot of businesses with visionaries that started them that brought them to a certain point. And they don’t understand that, that why they can’t go to the next level. And a lot of times is because they’re lacking in in at an integrator in their business that can execute on their vision.
And this is what we’re talking about. The first part of this is, is the vision. And then the rest of this really in the planning is, how are we going to execute on that vision? Knowing what we know, knowing figuring out the resources we need? And then ultimately, now, when when are we going to do stuff? Just laying it out over the year? What are we going to do in the first quarter? What are we going to do in the second quarter? And what should the results be on all these things? That’s we’ve seen that a lot, Andrew, and how the importance of laying that out and and then measuring the results, haven’t we?
Andrew Cross 25:53
Yeah, absolutely. And, you know, no, no leader, I haven’t run into one yet who started a company, they usually end up doing everything themselves at the beginning. And then they start to leverage and become a general manager sort of up the business. So they’re getting four or five people to do it. But then they understand the vision. They know what they want, and where they want to go. But very rarely do they get there. They start and they drop in there on to the next thing, that another great idea that they had, and this can happen in a matter of 24 hours. But you need those people behind you that can see that plan through.
Damon Pistulka 26:33
Yep, yep. And then of course, behind all this, we have to understand what the costs are, what the costs are. And, and and the resulting benefits to if it’s going to drive revenue, reduce costs, increase costs, because we got to buy equipment, we’ve got to invest in systems, technology, whatever. But you have to get to this detail level, because we talked about what actions are we going to take? When are we going to take them?
What financial impact is that going to have? Because this all helps us to build these projections for for the year, both showing revenue, increased cost decreases or investments we need to make. It’s it’s a critical step again, actions when we’re going to do them. And then the the cost forum. And this is where you get involved a lot, Andrew, isn’t it? Because when you when you look at this, you can really if you want to you can actually model your cash flow for the entire year on this.
Andrew Cross 27:28
Yeah. Yeah. And and it’s it’s a blueprint, you know, that’s why, you know, I like it. It was, you know, it’s the finance part, of course, the cost, but you also, you have to look deeper into that behind the numbers too. And, you know, the real cost, the time that it takes, you know, for you, as well. And you have to you have to have some way to do it cheap that because that’s the hidden things behind the numbers that will that will be one of the reasons you don’t get there.
Yeah, right. What’s missing? Yeah, but I loved it. I just that’s you. To me, it was an eye opener, in my experience, as I took finance, but I was working at at Ford Motor Company. But what after that one, that level of, you know, detail, not the accounting level, but at the finance level, and relate to me, the light bulb went off, I really understand how the big picture is and everything works.
Damon Pistulka 28:23
Yeah, yeah. And as I said before, we’ll go through this quickly, but you need to consider the results. Because if you’re going to put in place, if you’re going to put a new piece of equipment in and it should increase your efficiency, when are you going to start to see the results? How much you’re going to add a new salesperson, how much should that increase your sales? When should it start? So you’re going to see this stuff, you’re going to understand this and you’ll see how you can put it together easily in the simple spreadsheet we use. But you always got to consider the results in of your actions.
What are the results of your actions, this is what your team should be doing. This is where this buy in comes in place and people make been making awesome comments about this. It get this to get your management team involved in this they need to own this onus they need to develop what you’re really trying to do here in your planning. Strategic planning process is getting all the brains working together like one you get everyone in your company working together like one brain, you’re going to go a lot farther a lot faster.
Andrew Cross 29:31
Yeah, yeah. And we talked about it too. It’s like start out where you want to be work your way back. This is now we’re also going to then we’re going to start a partner segment this into this area so that your people can but they got to know the results or what their numbers are or you know, however, we’re going to do that to get to the end result and so we have somebody really working that that product. Yeah, again, yeah, so divide and conquer. Yeah. It is not a plus these things, these things need to add up together and they don’t work.
Damon Pistulka 30:07
Yep. Yep. Yeah. So, so then you’ve got all this stuff. And I always like to talk about this. And I want to say, Yeah, Professor P talked about factor in the time savings in any investment. Exactly. That’s what you need to do. And the more specific the plan better, Mark says, Yeah, I think, Mark, you’re speaking our language, because as we go forward in this, we’re going to, we’re going to start talking about how you take this from quarterly, to monthly to weekly. And when you get it to there, you can drive tremendous change. So we’re gonna test
Andrew Cross 30:47
an important part is you’re shooting yourself in the foot, if you say, like, you know, you’re you’re doing, you know, a million and a half in sales, and I want to be 20 million sales. That’s our goal, you know, so, think about it. Yeah, it’s gotta be, it’s got to be the smell test, too. Because that’s, you’ve already failed, you know, you know, and you can start there, work your way back. But, you know, the plan has to, you know, it’s okay, you can get to 20 million, it’s got to be able to get past the smell test. Otherwise, if you won’t have buy in, yeah, you know, and it’s people disregard it, you know, we’re just talking, you know, that’s just Daymond talking out of his butt.
Damon Pistulka 31:29
You know, anyway, but, but, but I like the smell test part, because you’re setting here, now you’ve gone through this, you’ve walked through it with your team? And they’ve said, Yes, we can do these things. And you’re going to go back again. And you’re going to start asking more details. Because this takes it from the annual into the quarterly, into maybe even the monthly buckets, we’re starting to break things down in more details. It’s like you said, you’re going to raise sales by 10%. In this quarter, how are we going to do that you have the specifics behind it, let’s write them down.
What are the results that you’re going to need to see across that quarter in sales? What are the actions you’re going to need, because as Mark said, we need to break this down from annual to quarterly, to monthly to weekly. And you go by going through this smell test. And looking at the critical steps to go in to achieving the goals? First of all, understanding what are the critical things that we have to do this year. And then engaging your team in making sure each one of those steps along the critical path is is detailed enough.
So the whole team, not just the part person that’s responsible for it understands and buys into this. So if the sales says that they they’re going to by doing this, they’re going to create these results, your operations, your finance, everybody should be in there and asking questions and learning about it and providing input. Because I guarantee you, they will refine this in ways that the salespeople didn’t think about you as the highest level executive didn’t think about, and it will come out better than anyone did it.
Andrew Cross 33:11
Yeah, I you know, and I think that they come back, they will, you know, it’ll it’ll not come from you. It will come from your people, but I can, what can I do here in this first 90 days? If I can get that? How am I going to get that to okay, I can get that done. And a chunk along like that. And then they realize when you circle back, they go, Oh, this plan will get to 20 million, because if we can do this 9090 days, third, second quarter 30 thing chunking it up like that, at the end, the lightbulb goes off? Yeah, we’re on our path. No, no, we just execute.
Damon Pistulka 33:45
Yeah, yeah, that’s that’s awesome. Awesome input there, Andrew. Because it is it is you could break it down. You keep breaking it down. Because when you say that someone says, Hey, we’re going to grow 50%. Everybody goes, Oh, man. But when you start to break it down, and you go, Well, if we do this, we can do this, those results, we do that? Well, then 50% might not be nearly as bad as you think about when you first see it. It’s a series of steps. It’s a series of steps.
And again, as we work through these critical steps, there’s going to be things that are difficult challenges that need to be overcome. It’s not we can’t do that, because how can we do that? And what are the things we need to solve? You need to keep that conversation moving in that direction. So once we know the critical path, and the we need to think Hey, what are the initial steps and Andrew brought that up very well. What’s What are we doing the next 90 days? What are the things that we have to get done? And keep going through that? So
coming into this town and check the boxes,
Damon Pistulka 34:51
yep, lay it down, check the boxes. And and then when we look at challenges, think ahead of the challenges again, we got a picture of Andrew here On the left, he was in one of his, his is one of those things he was out working in there. So I got a picture of him one of those and put it up here. But have him think about the challenges. Think about the challenges. What? Okay, you need to grow the sales by 30%? What is the biggest challenge in that? And how are we going to overcome that challenge? Yeah, hit them head on.
Gotta do five chin ups? Yeah. It’s just five.
Damon Pistulka 35:37
Yep. And it just keep going like that. And you think about these and hit these challenges head on. Now we’ve gone all the way from the destination into the critical steps. Now we’re talking about, okay, what’s gonna, what could derail us? And how are we going to prepare for those things as we go? Because it’s it’s get your team thinking about it, getting them planted about it? It’s not we can’t do this, it’s how can we make it happen? And you know, you’ll find that they’ll go a lot farther.
Andrew Cross 36:02
And I think, too, we circle back, because we talked a little bit about fractional, you know, and resources. And, you know, we’re talking to the business owner, it’s like, you’re not alone, right? These are fabulous resources that you could tap. But you also need to make sure that your people understand that they’re not alone. In this tool, there are outside resources, right? It’s not, it’s not on them to come up with all the answers and solve all the problems. It’s, you know, again, getting them the right tools, as a, as a good business owner to is like, yeah, you know, if do you have the right tools to do your job and get this, get this project done?
Damon Pistulka 36:40
Yeah, Mark, Mark’s got a great comment there. The how we get there as the operational focus. That’s right. And that’s what we’re talking about in this part. At the visionary part, they’re setting the goals. And they’re going to that a lot of visionaries confused, as Mark says, Here, they confuse setting goals with planning. This planning is where you take those visions, and bring them to reality and create reality, as someone said, on LinkedIn. And I know Brad mentioned that too.
But you’re right Mark, this is where you’re going to make sure that you’ve thought through this laid out the steps you need to take, and the timing and the costs and everything to do this and really execute on it. And as we’re saying here is if you go back again, and you’re getting a more and more more intimate knowledge of your what you’re going to do at each level in this, and that really uncovers a lot of stuff, doesn’t it? Andrew as
Andrew Cross 37:36
we get deeper into this, yeah, yep. It’s it’s a it’s a process. And it’s it’s a improvement process that is continually circling back reassessing it and adjusting it again, that we’ll get to, but it’s like our old buddy, Jeff Graham, you know, it’s like, and he taught, he really got in there help sales teams, not? He it’s not, you know, teach them how to fish, you know, don’t fish for them.
Damon Pistulka 38:04
Don’t give them actually, for the day teach someone to fish, though. They’ll live a lifetime,
you know, basic, basic block. And
Damon Pistulka 38:13
then again, I said refined cost, refined timing, it kind of goes hand in hand. And Mark, you’re right, that’s planning, this is planning, this is going back and read, you know, we’re giving it the smell test, we’re going through and say, if you really think you can do this, what are the steps it’s going to take to do it? When do we need to have them done? And what results should we see? When you know what’s it going to cost?
First? Sure, you really can do it that much, you’re going to take more, it’s going to take less? These are the conversations that you get everyone involved in because ultimately you’re you’re you’re building that team camaraderie, they’re the buy in them thinking about it, because they know, often better times than anyone else. What what really is going to take and what they’re going to need to do, and by being the leaders can help them move in the direction the right way, isn’t it, Andrew?
Andrew Cross 39:03
Now, in timing, this is forecasting, you know that everything else is fairly easy to do in a plan. We know what things cost, you know, we know we know what it’s gonna cost. We know we can all add up those numbers. But the Voodoo is, you know, what are the sales going to be next month, the month after that the next 90 days, the next year? The next 10 years? I’m forecasting to timing is the same thing as forecasting sales, because time is money. Yep. All right. Well, you know, we had our objective from our strategic plan last year, it was supposed to you know, we put down that timing six months come swing forward this year, we’re going back why did it take eight months?
What happened? And so that when we forecast in project, you know, our timing is the most critical thing because it is that the dollars and the time our most valuable resource, and so going and we look at next year, so we get better. at forecasting, and that’s the only way you can do it is if you can forecast accurately, you know, when this projects, that timing is going to end, and you can consistently hit it, and you do it with the sales, you’re gonna, you know, that’s you’re gonna win.
Damon Pistulka 40:15
Yeah. And when you talk about this process overall, the annual planning process I was I was introduced to it many years ago.
And we actually would start in September, the meetings would start, we’re thinking about all these things, and working through this process, the more you can let this kind of marinate in people’s minds in the beginning, you know, if that if that destination is there early, and you let them marinate, and let them refine their thoughts around it, you can really go and it’s like, the first month, if you’re starting out early, you might have one, maybe two meetings, but then you get more frequent as we come into the end of the year to have things done. But finding this timing, again, is critical.
Andrew Cross 40:57
Well, it’s also, it’s also the most important thing to think if you really, you know, it’s it’s a tool to use with your team, if you’re collaborating to, here’s the problem, here’s what we want, how long is it going to take? The answer to that question from your team will tell you, whether you think this is going to get you know, whether this is really a viable thing, or you know, yeah, is it is it realize, you know, can we realize this? Yeah.
Damon Pistulka 41:24
And Brad says, yeah, exactly under it, can we really get used to it that smell test again? Can you really do it? Look, everyone could look each other in the eye says, Can you really do that data? And while there’s
Andrew Cross 41:36
two answers to the question, too, when it comes in how, you know, how long do you think it’s gonna be? You know, ones will say we’ll have it done in a couple of weeks. And you know, they haven’t really thought about this, and what it’s going to take to get it there, or we’re going to have it done in six months. Well, that’s just you know, it shouldn’t take that long. We know this. So let’s go back and be a keep asking the questions, the timing, you know, that really runs the whole thing. You got to keep coming to look at it.
Damon Pistulka 42:02
Yep. So we’ve started with the process, we laid down the initial we refine that process with a smell test, and we’re going to give it the final review. And I like what Brad says, design the process, test the process and the dollars show up. They do. And he also his last comment is the experiment of business. And the fun, this is fun in business.
If you if you do this, right, it can be fun for you and your team, you’re going to do one more review, you’re going to go back through it again, you’re going to say listen, listen, people, we’re ready now to turn this into our our financial projections for next year. And it’s it’s time to go through that with them one more time. Ask them about the details. Again, as Mark mentioned along a few comments ago, we’re taking this now from that annual to the quarterly to the monthly so that people can really get behind the details of what are we doing in January?
What are we doing in April? What are we doing? May, you know, so they understand this stuff? You’re given one more review? And then ultimately, what do you get? What do you get from this, and you should get a pretty, pretty decent document now. That’s, so what you’re doing in this whole thing, is you’re getting the information that you can plug into your projections. And that that is that is the gold in this part of the process is in an Andrew?
Andrew Cross 43:26
Yeah. And this doesn’t have to be, you know, it, it shouldn’t be, you know, 150 page document.
Damon Pistulka 43:34
Andrew Cross 43:36
And they’re also, you know, we all talk about executive summaries. And there’s a reason executives like that in the business owners, you know, it’s in you have to, they want to know what they need to know, in where we’re at on one page.
But you also have to jump that down, because, you know, they’re your, your team, they’re the executives of their world. And they have to have the same kind of reporting out. Yeah, you go through that, if you can get it on one page and explain to your, your upper management, you know, everything that they need to know, it takes time to get it cuz it’s taking that data and getting it to them in that way you then you’ve got a very good tool, you really are on top of where you are. Yeah.
Damon Pistulka 44:21
So we’re gonna, we’re going to share this real quick and then we’re gonna wrap this up. Yeah, this is it simple as it can be. I mean, you’re gonna have more lines in this. This is just a blank one that we we’ve we’ve laid out here, but you know, I’ve got sales, operations, finance, you know, people and miscellaneous you put your categories in there. What am I going to do in the quarter, break it down into months if you want from there, but this is just gonna be your tab in your annual projections.
You just build out your tabs so that you can use this in your annual projections. When we when we look at this in the next weeks, we’ll show you the spreadsheet He says you can use we’ll give you the templates to use if you want to it to be able to do this, because you lay this out, it will turn into the financials for your projections for the next year, and will then turn into the your monthly and weekly goals for your, for your entire business.
Andrew Cross 45:18
Yeah. And in the power of this is when when this is fully implemented, well, it looks simple enough and a one page thing, but there’s a lot going on behind this. It’s it’s when that it’s when your team starts, your people are back to it. Number one, your people are starting to actually to develop what these points are that we are tracking and what we’re looking at here.
They’re their ideas, they’re starting to think. And they’re coming up with the their problem solving. They’re the ones coming up with the ideas. Yeah, again, because you know, you’re not alone. And again, if you start at the beginning, it’s overwhelming. Yeah. But you know, you don’t do this. Hello, this. Yes.
Damon Pistulka 45:59
No, this is your team. Yeah. Yeah, it is your entire team. It’s not one person that that does. This is your entire team. And and that’s the end, folks. That’s the end air you know, then we’re going to next time, we’re going to talk about building projections. We’re going to shut it down here. I know we got people that need to go for their nine o’clock meetings. We are getting done on time today. Thanks so much.
If you’re on LinkedIn live on a thank Sam and John and Adam and everyone else that was that was watching us on on LinkedIn live. We’re going to shut down there. We’re going to finish up in a few minutes on remote and we’re going to be done. But thanks so much for joining us today, folks. We we hope that we see you back again for the next one. And we are going to be out on LinkedIn for now. I’m going to shut that down and we’re going to go back to the tables. Thanks so much
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