Tips on developing your annual company plan

It is important to develop a culture of putting down exactly where your company or business should be headed at the beginning of every year. After analyzing the previous years performance indicators in terms of actual sales, percentage of sales conversions vis a vis sales pitches made, cost of sales, company expenses, and actual profits. This process will help you see whether your business is actually growing and making money.

A very good friend of mine who is also a financial consultant once described a typical company situation to me that I thought was impossible. You can be running a business with a consistent cash flow and debt repayment and yet still be making substantial loses. One of the reasons this could happen can be explained by the product/service pricing strategy. You must always be aware of direct and indirect cost of sales when pricing in order to ensure each sale converts into profit.

So how do you go about developing a company plan?


1.Begin by an economic analysis of the market you are in, global trends, and economic forecasts. If you are In Kenya this information is available on the central bank website in great detail.

2.Analyze the particular industry you operate in, the trends and forecasts for the year and where your business is positioned against your competition. This can be done through a SWOT analysis of your business.

3.Analyze each of the departments or business units in terms of performance and a SWOT analysis.

4.Develop specific SMART goals for each of the business units that you want to achieve in the coming year. Limit these to 5 for each business segment to avoid being unrealistic. The number could vary depending on the size of the business.


5.Determine what assets and manpower are necessary to achieve the objectives for the next year.

6.To develop financial objectives create an excel sheet illustrating sales leads, current client portfolio, and the predicted monthly income. Indicate what percentage of sales you want to raise from new business.


7.The most crucial step. Make sure that you include your key employees in this process in order to get buy-in into the vision from them because they are the ones to help the business achieve the overall financial objectives.

For more information or extra help with this process. Please contact Edwin on 0722 763 360 or visit www.bizresource.co.ke