An annual work plan identifies your goals for the next year and strategies for achieving them. The importance of a work plan is that rather than a big, expansive vision statement, it focuses on attainable goals and sets a deadline for achieving them. It gives you a concrete foundation on which to build the coming year.
The Annual Plan Definition
An annual work plan is different from a vision statement or a five-year plan. The annual plan definition is that it sets specific goals for the company, or company project teams, to be accomplished over the next 12 months. The plan can be ambitious, but it should be down to earth, as summed up in the SMART acronym:
- Goals are specific. "Boost sales revenue" is general, but "Double the revenue from online sales" is specific.
- Objectives are measurable. It's hard to measure employee loyalty but "Reduce staff turnover" is a measurable goal.
- The annual work plan's goals are achievable. For an aerospace company, "Begin offering private space flights" might be achievable in a year; "Start lunar colony" would be overly ambitious even for a stretch goal.
- The objectives are also realistic. Even if it's achievable, is it one you're really willing to work toward? Some SMART gurus suggest relevant as the R-word: Will achieving the goal accomplish anything that matters?
- The goals are time-related. Any goal that doesn't have a deadline attached is likely to sink to the bottom of your to-do pile.
Before drafting your annual work plan, review the company's mission statement, vision statement and multi-year strategic plan. Draw up a list of achievable, measurable goals with deadlines that fit the higher-level documents. Then, detail strategies for accomplishing them.
Build on Your Vision
You shouldn't start your work plan from scratch. Instead, look at your company's big-picture documents, such as the vision statement or the five-year strategic plan. The importance of the work plan for next year is that it meshes with the rest of your vision.
For example, a restaurant's vision statement might say something about offering the finest French cuisine in the tri-state area. The five-year strategic plan has goals that include sourcing the best ingredients, training your chefs and drawing enough customers to turn a profit.
The annual work plan chooses goals that fit with the vision or that advance the strategic plan. Even if your five-year plan breaks goals down year by year, it's a mistake to just cut and paste from the bigger plan. Depending on your past performance, the goals in the five-year document may no longer be attainable or may have been achieved already.
Objectives and Strategies
Once you've reviewed the big-picture documents, you and your team can set some SMART goals. The plan should be SMART too: Even if every goal is realistic and attainable, you may not have the resources or people to accomplish them all in the next 12 months.
Then comes the strategies. Suppose you've set an attainable goal to double sales revenue in the next 12 months. Are you going to offer new products? Cut prices? Spend more on marketing? Set higher quotas for your sales force or offer them bigger commissions?
Once you have a strategy, consider what might go wrong:
- Your largest competitor undercuts your prices.
- A recession begins and saving money becomes a priority.
- How stressed is your sales team? If you push them to increase revenue, will they deliver or start looking for jobs elsewhere?
A good annual work plan considers backup strategies to deal with whatever risks you see ahead.
- If you have a current work plan, schedule a new work plan meeting a few months prior to the present one's expiration. Work with the group to see if the current plan needs modification.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com