Year end, a time for reflection and the time to move forward.  The new year business plan will be different at every business—but yes, when the clock strikes midnight on December 31, it is high time to have a game plan on paper for the coming year.  Were the tough questions about last years performance asked and answered for the 2014 plan?  Revisit the plan regularly by asking these questions:

Are performance measures in place? It’s fine to say that the company will have “X” dollars of profit this year, but that doesn’t help leaders figure out why they are missing plan. A business plan depends, in its simplest form, on a sales plan and a production plan. They, in turn, require more specific plans. For each plan (for example, the plan for sales through wholesalers in the southeast division) there should be performance measures in place. Without measurement of the details, your  business plan is more a dream than a tool for hitting goals.

Do your people have the resources to get their jobs done? Some people may need more training, some managers may need to staff up, some divisions may need better equipment. There’s often a reluctance to shift resources out of weak divisions into high-growth divisions, but that’s usually the shift needed to maximize profitability.

Do you have the right people in the right positions? Managers are very reluctant to demote or fire people, but sometimes that’s the best action. Be honest with yourself, will these staff members help us achieve our profit goals?

What if you’re exceeding goal? There’s still a need to change plans. I’ve seen too many managers start sandbagging in the fall. Confident that they will hit this year’s plan, they pre-pay expenses and defer revenue until next year, so as to push earnings from the current year into the next. This is intended to help meet this year’s goals. It’s just a game, and one that slows down profit growth at the company. So when you’re exceeding plan, it’s time to raise the plan goals.

Your ideal business plan will be a “living document,” something that you can revisit during the course of your business’ lifecycle.  The best way to make a living business plan is to have a set of integrated assumptions for your financial model (a table you can tweak at the touch of a button) and to use research resources that are updated frequently. That way, as your roadmap changes and your business matures, it will be a simple matter to make the adjustments required for any coming year. Remember that a good business plan needs to show:

• The market opportunity for the coming few years
• The main competitors to your business and their strengths/weaknesses
• The market need as you see it for the projected period
• A complete list and description of your company’s products/services
• A personnel plan that will have the company adequately staffed year-round

“The one who adapts his business to the times prospers, and likewise the one whose business clashes with the demands of the times does not.”