What is Your 2019 Strategy

14! Do you realize that in 14 days, 2019 will be here? The next two weeks are going to be some of the busiest and most joyful in the entire year – a time to gather with friends and loved ones, to celebrate Christmas and New Year’s. But you are an entrepreneur, and while the carols and parties are wonderful, you know that 2019 waits for no one.

Many of the entrepreneurs that I work with have already conducted their strategic planning, laying out a roadmap for the next 12 months. If you have not completed yours, don’t worry, as we are going to discuss some of the key areas of focus that a good strategic plan covers.

First off, let’s talk about what strategic planning is and what it is not. Strategic planning is your high-level roadmap to success. It is an honest assessment of your current capabilities and a vision that will ensure your company’s survival. It is not a big, fancy, 18 volume novel that you and your key staff labors through every year and never looks at again until 2020. Neither is, strategic planning tactical planning, since day to day activities (or tactics) may change over the next year, but where you are headed (or strategy) will not change.

Businesses activity can be classified into four major areas:

1. Strategic Vision
2. Financial and Administrative
3. Sales and Marketing
4. Operational

I will define what I mean by strategic vision below and then provide questions for the other areas. Before you start developing your 2019 plan, you should take a few minutes and honestly assess where you are in each of these areas, as you cannot develop a plan to improve or grow if you don’t have an understanding of where you currently are.

Strategic Vision

Your strategic vision is what you dream your company will be like in 10 years. The reason it is critical that you start there because you must always start with the end in mind. As you work through the other three areas, you must always keep in mind where you want to be in 10 years. That way you can align the short term (2019) strategy with your long-term strategic vision. When you are developing your strategic vision, don’t cheat yourself. By that I mean, don’t set pie-in-the-sky goals. Set clear, specific, and quantifiable goals. A bad example of a strategic vision goal would be “to be a financially strong company.” A better example would be “to have sufficient financial strength to weather unexpected economic or business challenges, defined by having at least 6 months’ worth of total annual expenses set aside in cash reserve and a shareholder equity to debt ratio of at least 2:1.” (Sorry for the nerdy bank term usage.)

Financial and Administrative

• What is the PROFIT (in cold hard cash) that your company produced in 2018?
• What do you project this being on 12/31/19?
• What expenses can you reduce/ eliminate in order to increase profitability?
• Where do your cashflow projections show the biggest constraint, and what is your plan to deal with it?
• How are you investing in your workforce to make them better qualified to do their job and satisfied with you as an employer? Are there critical positions that need to be filled in 2019? Do you have back-up staff trained on all critical tasks?
• What is your equipment and machinery replacement or refresh plan for 2019
• What are the three Key Performance Indicators (KPIs) in the financial and administrative activities? Compare 2018 to projected 2019.

Sales and Marketing

• What were the total sales in 2018?
• What was the amount of returns/ refunds you gave in 2018?
• What do you project this to be in 2019?
• What is your current backlog of work?
• What is your current sales pipeline?
• What is your pull-through rate for projects in the pipeline?
• How well does your sales force understand your operational capacity?
• Is your sales compensation plan in sync with your profitability model?
• What are the three Key Performance Indicators in the sales and marketing activities? Compare 2018 to projected 2019.

 Operational

• Where is the bottleneck in your process? How do you move it to the place that hurts you the least?
• What is the most critical piece of equipment (manufacturing) or critical activity (service)? How much profit does that equipment/ service provide you? How much down time did that equipment/ service have last year? How do you reduce or eliminate this downtime?
• If you are a service company, how do you eliminate non-billable hours from the revenue producer’s day? How do you shift those activities to the lowest cost employee that is skilled enough to accomplish the task?
• How efficient was your workforce last year? How was this tracked? How can you get 10% better this year? Compare 2018 to projected 2019.
• How do you ensure that you are able to meet the commitments that your sales team has brought to the company?
• Is there a way to increase operational efficiency by 10%?
• What are the three Key Performance Indicators in the operations activities? Compare 2018 to projected 2019.

Any goal or objective that you established must be clear, measurable, and assignable to a single individual. I also recommend that you establish a rhythm to assess and review your progress at least quarterly. If you don’t review and assess your progress throughout the year, then you are wasting everyone’s time.

Strategic goal setting is a lot like riding a motorcycle. When I learned to ride my motorcycle, I was taught that the bike will follow your eyes. This means that when you want to guide your motorcycle, you simply have to look at where you want to go. Focus on where you want to be and your hands will automatically guide the bike, making small adjustments all along the way, and you will end up where you are looking.

Focus on your goals and you will be firmly on the path to achieving them.

Being an entrepreneur is one of the most difficult and demanding things you can do. The good news is that entrepreneurship today is a team sport. Let’s connect on LinkedIn or Facebook and together we will start taking control of your business finances which will lead to peace, fulfillment and achievement of your strategic goals. When we connect, I would love to learn your #1 KPI for each of the three areas.

Greg Martin is an entrepreneur’s insider to the banking industry and passionately believes that every person was uniquely designed for a higher purpose and calling. Greg guides entrepreneurs in defining and achieving their purpose and calling. His deepest passion is living life with his wife of 17 years and their wonderful son.