Why Reviewing Your Business Plan is Critical.

Why do annual reviews matter? Well, you need to adapt to market changes. Economic conditions, technology trends, competitive moves can impact on last year's plan. I'm Mike Harris and I help businesses to successfully grow their turnover and profit. In the last year alone, I have helped dozens of businesses at least double in size. And I work with small, medium and large businesses, including startups and multinationals. Imagine driving across the country without ever checking your map. You might start strong with eventually your drift off course. The same is true for your business. Today, we're diving into why reviewing your business plan at the start of every year and setting clear objectives is not just a good idea but a strategic necessity. Hello and happy new year to all you leaders and strategy. And welcome to season four. Yes, that's right. Season four where we're going to focus on the best advice for business leaders. And starting with this episode, as we enter a new year, I always think it's a great time to stop and take stock and see how we're doing against our business plan. So in this episode, I'm going to take you through a practical example of how to carry out an effective review of your business plan. But before we do that, just a quick reminder of what a business plan is and why it's important. Now, we've covered this in previous episodes, particularly at the start of season three. So your business plan is your game plan for the next three to five years. It sets out your future objectives and the strategies for achieving growth in your business. So why review it? Well, many leaders create a business plan and then they put it in the draw. So why do annual reviews matter where you need to adapt to market changes? For instance, think about how AI has disrupted entire industries in just 12 months. You also need to measure progress and accountability. Reviewing the plan helps you see what's worked, what didn't, and understand why. Without this reflection, you run the risk of repeating mistakes or missing opportunities. You need to realign with your vision and your mission. Businesses evolve, but your vision stays the same. So your strategies need recalibration. Ask yourself, are we still on track to achieve our long-term goals? So I'm going to take you through the process I use with customers in workshops with their leadership team. When we look at the year that's just ended. So the first thing I focus on is the highlights. And we picked 10 highlights of the previous year. And these can be anything. They can be marketing, financial, operational, HR, anything. But it just gets you focusing on what's been achieved. Then we look at what's worked and what's not. And that's exactly what it says. What's worked in the business and why. This gets you thinking about what's helped you be successful. And then you look at what hasn't worked. In other words, what's not gone to plan. And again, look at the reasons why. This gets you looking at the corrective actions you need to take to get your business back on course. After that, we look at the numbers, the budget, the figures of the business. It's a simple review to see how you've done against your budgets. When you look at turnover, overheads, profit, cash flow, orders, that kind of thing. How have you done against them? Have you achieved them? If not, why not? Again, what are the actions you need to take this year ahead of you in order to correct it? Or maybe you've exceeded those budgets. And if you have, can you repeat it? But more importantly, if you're trading above your budgets, what impact does that have on the business ahead? Does it mean you've got to change your plan? Do you need more resources? Do you have the cash flow, etc? The fourth thing I look at is, are we getting closer to the business plan? So this is a index with your gains the business plan itself. Go through each line of the plan, ask the question, have we made the expected progress to achieve the overall business plan? You've heard me speak previously on podcast about Steve Redgrave and the strategy he had for winning the Olympics. And he had this question, is it making the boat go faster? And effectively, that's what you're doing here. Are you getting closer to achieving your plan? In particular, one of the things we cover is a review of the SWOT analysis. Has this been properly managed? Has anything changed? And when I go through the business plan, we score each item out of 10. Where one to five is read. In other words, you're not achieving the plan. Six to seven is amber. In other words, you're doing reasonably well. And eight to 10 is greed. In other words, you are meeting the plan or exceeding the plan. Then we review the progress. Are you making the expected progress against your action plans? And again, I review that using a simple system. Red means you're making a slow progress or you've not started at all. Amber means it's in progress and roughly where you would expect to be. And green means really good progress. Or you've completed that action. I have a full colour that I use, which is purple. Because sometimes when I do the workshops and we look at an item, they don't actually know the progress that they're making. And they have to go off and have a look at it. So I use purple, but I don't actually know the progress. And then lastly, we look at the key takeaways from the year we've just reviewed. And these can be good takeaways or they can be bad takeaways. But these are the things that are going to influence your thinking on the new year that you're coming into. As I stated earlier, carrying out this review is really important. So I thought I'd provide a real live example of an end-of-year business review. Now we're really lucky that one of my customers has given me the green light that I can use extra from a recent review that I did with them just before Christmas. To be honest, though, I have changed things a bit in order not to breach confidentiality and to protect the innocent. But this is a real example. So let's look at a real year-end review. This episode is sponsored by Strategist Consulting, expert business and leadership consultancy for everyday businesses and professionals. What if the key to your business's next growth phase isn't a mystery by the proven process? Is your business at the ceiling with Croffits flat, daily cares and scaling up feeling like a risky leap? You're not alone and you don't have to solve it alone. Strategist Consulting is your partner for structured transformative growth. Led by my carus, a proven strategist and project manager with expertise in scaling businesses, bid management and delivering results. We provide clarity through our call service, the business review workshop. This isn't just advice. It's a deep dive analysis that delivers a clear, actionable roadmap. We identify your bottlenecks, uncover hidden opportunities and give you the precise steps to move from stuck to strategic execution. Visit www.strategistconsulting.co.uk now and transform your business trajectory. So here I am with my trusted flip chart with my marker pen in hand. So let's start with a real-life year-end review. Now I've got lots of items to go through but I'm not going to cover them all. We haven't got time so I'm just going to pick four or five items from each of the sections that we mentioned earlier. So starting with the highlights. These are the highlights from that business for last year. So firstly they saw a highlight as the new branding and logo. They spend a lot of money on rebranding the business, coming up with new logo, making it much more relevant to the market. Second highlight is that they have a full order book going into this year, coming ahead. The third one I'm going to pick from here is their new customer care team. They saw that as a highlight. One of the things we identified when we put the business plan together was they felt that they were not customer focused enough. They set up a customer care team and a year later it seemed to be bearing a lot of good results. Linking to that was the amount of repeat business. Coming into the year they had probably about 30% repeat business. Coming out of the year they had over 70% repeat business which just underpinned the success of that customer care team. So what else shall I pick? The new structure. As always when we do this apologise. for my handwriting. They put a new structure in place because of the growth of the business, they were doubling in size, they had to put a new structure, bringing new people, they felt that was jelling working well and we'll come back to that a bit later. And then the last item I'm going to go with is a highlight was they moved into new offices because of the growth, because of the new image, they moved out of offices, they had been in for nearly 20 years into a brand new offices on a business park and they felt that was a real success, that move had gone well and the impact it was having on the culture and the morale of the people in the company was fantastic. So they're just six of what were 15 highlights that they identified for last year. So the next item is what's worked and what's not. So as I said earlier, this is literally what it says in the tin is reviewing the things that have gone well and the things that haven't gone well. So let's start with some of the items that they felt that worked. The top of their list was teen spirit and working together. So the team had grown substantially to reflect the increase in turnover, lots of new people in, that new structure I mentioned earlier, the customer service team and they felt that that was working really well and there was a great morale and team spirit. We mentioned it already but something that worked was repeat business. They started implementing customer satisfaction questionnaires at the beginning of the year and the scores were pretty poor but at the end of the year the scores were really good. So one of the things they felt had worked was that customer satisfaction questionnaire and the scores. It helped them be able to identify the things they had to correct. Something else they felt that worked was the scaling of the business. Not only had they hit the growth targets, they had actually exceeded the growth targets and lastly social media was something that they felt had worked. So they had done very little on social media to publicise and push the company. So they took their clients and potential clients through the journey that they were on, scaling the business growing and they put that on social media. And in particular on LinkedIn and TikTok. So there you go, five things that worked well for them in the year just finished. But not everything was rosy. Some things hadn't worked and these were the things they identified. So the first one was the new software that they brought in, particularly to support the customer care team. They felt that they had a lot of teething issues and had to rewrite quite a lot of the software. The next one that we're going to look at is recruitment to key staff. Now they did find the people they needed but it took them longer than they anticipated. So they effectively didn't start early enough and probably brought the people in a bit later than they would like to. Next one, which was about the leadership team, was freeing up time. So in other words, freeing up the time to focus on work, winning in order to grow the business and also to actually spend more time on the business than just in the business. They struggled with that. Luckily they employed me to come to their offices once a month and I helped to refocus. And in the end, you can see from the things we're talking about, they've had a good year but they've still struggled. There's lots of businesses do to actually focus on the business plan. Next one, despite the growth, they have struggled on converting orders. And the reason for that is it's taken a lot longer than they anticipated. A lot of the orders have come on stream much later. So the growth, even though it's been really good and they exceeded the target, nonetheless, it could have gone a lot better. And one of the things they concluded was they hadn't really focused on it enough. They thought it would just happen. Once they had been told that they were going to get the order, they just assumed it would come. They hadn't put that focus on conversion, having conversion plans. And lastly, I'm going to pick this one as the thing that hasn't worked. And that was the launch event. So the middle of last year, looking at that new branding, they set up a launch event for new customers, existing customers, for focus on that new brand. They didn't plan it very well. They probably picked the wrong time to do it in the middle of the summer, people on holiday, and it just hadn't gone well enough. So there you go. Five things that worked for them, and five things that didn't. So the next thing we look at, as I said earlier, is looking at the position against your numbers. So I'm not going to write any of that down, as I say, for obvious reasons, I can't share those actual numbers. So the next thing that we look at is, are we getting closer to the business plan? In other words, are we making the boat go faster? And as I said earlier, when I do this, I score the business items on the business plan out of 10, one to five is red, six to seven is amber, and eight to 10 is green. So what we're going to do is just pick a few of their items off their business plan, and I'm going to show you how that got scored at the end. So the things I'm going to pick is profitable growth, new customers, right structure, differentiating through their competitive advantage. So number five, let's go with strong integrated brand. And as I say, these are just items off their executive summary. So how did they do? How did they score themselves against these? Well, against profitable growth, they scored themselves an eight. They were ahead of the business plan and ahead of target, not a 10, because they'd had some teething problems in achieving that growth, particularly with the overhead overspend. So against new customers, they gave that a six. And the reason they gave themselves a six is because whilst they got a lot of repeat business, and that really did drive the growth, they struggled with getting new customers at the same time. So against the right structure, they gave themselves a 10. They'd identified the staff that they needed, went and got them, and they felt that structure was playing dividends in delivering the quality of service to their customers, differentiating through competitive advantage. And competitive advantage was something we identified in detail at the beginning of the business planning session. They gave themselves a seven against that. On the basis that they still were struggling with a little bit, it was working, they were picking up work, customers liked it, but it wasn't yet in the muscle memory. It wasn't instinctive throughout the business. And lastly, strong integrated brand, again, they gave themselves a seven. And the reason for that was they felt it generated, gone very well, the brochures, the updated website, the LinkedIn, that had all gone well. The bit that failed on, as we mentioned earlier, was that launch program and launch event that hadn't gone as well as it should have done. So lastly, the key takeaways, these are the things that are going to be important to them going into 2026. So firstly, they're ahead of the plan. And actually, they're almost a year in, they're nearly six months ahead of the business plan. So therefore, they've got to reflect on that. What does that mean in 2026? Are they going to keep that same level of growth or they're going to bring it back to what the plan was for this year coming? So the next key takeaway they had is that the management team must find the time to grow the business. And in particular, because they've invested in bringing people in, they've got the structure that that leadership team can now focus on the growth of the business. Another key takeaway they had was that the staff was working well. And the reason that's important coming into this year is they're going to be growing further, they're going to be growing and bringing more people in and they've got to maintain that culture, they've got to maintain that team spirit that they've identified. The next key takeaway that they had is they've got to focus on new markets. The reality is with the growth that they were having with repeat business and the sectors they were in, it was probably getting to the upper limit of what they could get. And if they needed to make the next step on growth, they had to move into new markets. And then lastly, a key takeaway that they had was not to be complacent. In other words, they'd had a good first year on the business plan, easy to just pat themselves on the back, think it's all going well, take the foot off the accelerator. And that was a big risk for them. I've seen it happen with other businesses. So it's really important that they realize that they were only at the start of the journey, they weren't at the end of the journey. So that was five of 10 key takeaways that they had for the year coming in. So there you go, there's an example that I did with a company in December, review of 2025 and how it's going to impact on their business plan for 2026. So there you have it, hopefully that all made sense. So in summary, your business plan isn't a one-time document, it's a living strategy. Reviewing it annually ensures that you stay agile, focused and ready for growth. And this is how I carry out end of year reviews with my customers. One, look at the highlights, that should 10 highlights of the year. These can be anything, marketing, finance, operational, AHR, et cetera. Two, what's worked, what's not? What's worked in the business and what hasn't worked in both cases, why? Three, position against the numbers, a review of how you've done against the business's budget, turn over overheads, cash flow, et cetera. What impact does this have on the year ahead? Four, are we getting closer to the business plan? Go through each line of the plan, ask yourself the question, have we made the expected progress to achieve the overall plan? Five, review progress, are you making expected progress against your action plans? And lastly, six key takeaways. These are the takeaways from the review you've just undertaken, good or bad, that are going to influence the year ahead. I've suggested that this is done at the start of a new calendar year for obvious reasons, which is coming into 2026, but many businesses do this review at the end of their financial year. Also, they often carry out this review more often than annually, maybe once a quarter, maybe once every six months, because waiting until the end of the year might just be too late. As you know, I like to set some homework, and this is the homework for today, schedule, a strategy review workshop involve key members of the team, including finance, operations, marketing, HR, et cetera, where you can use real data from the business, financial performance, customer feedback, market research, and carrying out the year end review, as I've just described. You might consider using an external facilitator, and if you do, of course, you can come and let me know, I have a lot of experience in this, and I'd love to be able to help you. Document the updated plan and communicate it clearly across your organization. Then the next step is how do you use this for the year ahead? And we'll cover that in a future episode. Leave a comment if you're watching this on YouTube, or you can message me on LinkedIn. Don't forget to like, subscribe, and share your experience on social media, tagging this podcast. And just a quick reminder of where you can find us, you can watch us on the leaders in strategy YouTube channel, listen to us and Spotify, Apple Podcast, Amazon Music, Podbean, and PodJacer. And of course, we upload every episode onto my LinkedIn page, and also onto the Strategies Consulting website. So that's it for today. Hopefully you enjoyed it, and you found it of use, and you come back to us next time when we have another great episode with a special guest, who will be giving you more best advice for business leaders. I'll see you then. [BLANK_AUDIO]