As we approach the end of summer, my mind turns to the annual plan.  I have begun to formulate strategies and consider the best approach for this year’s budget; there are a few things that really jump to mind:

1.       Revenue Growth: A few years ago, we used to think that estimating customer behavior was challenging.  Today, we are dealing with economic issues that can swing perception and behavior in a much more material way.  Customers are starting to open their wallets again, but in fits and starts, and unpredictably.  Business customers are delaying spend decisions where possible and negotiating tougher deals.  Consumers, too, are seeking the best, smartest use of their available funds.  Nearly everyone is seeking to set something aside for a rainy day.  These shifts make determining reasonable revenue growth (or decline) projections challenging.  Strategies to address this in planning:

a.       Scenario Plans – consider developing a business as usual, best, and worst case plan.  Once developed, evaluate your current infrastructure against the worst case plan and consider whether adjustments are necessary.

b.      Pipeline – evaluate options to reduce churn and/or turn more of your leads into paying customers.  How specifically has your sales strategy been communicated to your team?  Do your reps have a script or a set of bullet points to convey to potential customers?

c.       New sales & marketing strategies – look at the way you spend your advertising dollars and calculate the return on each item.  If you can’t calculate it, consider an alternative form of marketing that you CAN track.

2.       Update, Review, and Reforecast: I typically prepare an updated forecast for the remainder of the year (or the next 12-18 months) at least quarterly.  Preparing an annual plan and leaving that document to stagnate will result in challenges later in the year.  It’s a good idea to keep a close eye on how current conditions are impacting your strategic plan.  Resist the urge to take an entirely short term focus, though.  It’s important to keep one eye down the road a bit so that you aren’t making short term decisions which will result in long term problems.

3.       Assess your agreements: If you haven’t gotten a bid recently on your insurance, merchant processing, cell phone plans, or any other negotiated cost, consider requesting vendor quotes.  You may be surprised.  Sometimes simply asking the question will result in material, immediate savings.