Year-End Business Planning

Octavia Conner

By Octavia Conner

Tags: All, Virtual CFO, Accounting, Strategy

Annual financial planning is one of the most critical tasks a consultant should do.

The year-end business planning should take place well before December, and then in December, you want to finalize the plan.


In today's post, I will identify four essential items you should include in your year-end business plan.





Let's say it's December of next year, and you are looking back at the last year of your business, AND you are blown away. You are super happy about the success and accomplishments of your business. What does that look like? 


I want you to visualize that in great detail. 


Now that you have that image, ask yourself a few questions.


  1. What would have had to happen to make that type of success and accomplishment possible?
  2. Who would you have on your team?
  3. What service, product, or project would be your signature item?
  4. At what price point would you make everything possible?
  5. What would your monthly, quarterly, and revenue earnings be?
  6. How much money would remain in your bank account by the end of the year?
  7. What key metrics must you have reached to make that level of success possible?


When you answer those questions, you are reverse engineering your success. 


Create a three scenario budget 

The next step is to create a budget for your business that will clearly identify your business's money plan.


You should have at least three budget scenarios for next year, Optimistic, Pessimistic, and Realistic. 


Optimistic - you are reaching for the stars! Yes! What is the highest level of success regarding revenue, and ideally, what would your cost be at that level? 


Pessimistic - if nothing changes or things get worse, what will your revenue, cost, and profit be? What expenses must you cut to float your company during those times?


Realistic - based on your annual growth rate over at least the last two to three years, what will your revenue, cost, and profit be if your company continues to grow at that rate? 


The next step is to create a Sales Plan and Quota

Even if you are the salesperson for your consulting firm, you should still have a monthly quota that you desire to reach. For example, here at SYTP, I am the salesperson. Each month I write down the number of clients I desire to sign.


Because I'm also aware of my closing ratio, which as of the date of this video is 50%, if I desire to obtain three new clients, that means I must speak with six potential, ideal clients at a minimum. Therefore, my sales quota would be three, my desired discovery sessions booked would be six, and my desired closing ratio would be 50%.


Get Your Team Involved

If you have a team, make them aware of your annual financial plan. You can even involve your team in the planning process. I also recommend you incentive your team's efforts. If they bring new clients to your consulting firm, reward them and make it a competition amongst your team members. Team collaboration with planning and client acquisition gets everyone excited about the company's success and how they have contributed to that success. When your team begins to feel as if it's their company or they are essential to the company's overall success, they will work harder for you. 


Departmental & Team Key Performance Indicators

When building a consulting firm, you must understand one critical thing: "the numbers don't lie."


If you have departments or team members, everyone should have a metric they are striving to achieve. There should be key numbers that your teams are aware of that will impact your firm's overall success or failure. 


KPIs and metrics begin at the CEO level. What metrics and KPIs are essential to you?


Once you have this information, break them down into the smallest, most achievable parts and source them out to your team and each company department. For example, I desire to close three new clients each month. With this metric in mind, we need a minimum of six discovery sessions scheduled each month. (Shameless plug, you who have watched this far, go ahead and schedule your discovery session, your bottom line and bank balance will thank you.) Any who, with this goal in mind, my marketing department (or assistant) must inbox and connect with a specific amount of ideal clients per week. Because of her efforts alone, she receives an incentive or bonus for each ideal client that books a discovery session. 


That example included both metrics and KPI tracking together.


Another example could be for your HR department. Your HR department KPI might be to maintain an 85% or greater employee retention rate. To achieve this, a metric could be using team surveys to ensure happiness and job satisfaction within reason amongst your staff. 


The bottom line here is that year-end planning is critical for the overall success of your consulting firm. The success of your firm relies totally on your leadership capabilities. 


You must visualize, plan, implement, and track and improve along the way. Click here to use our free planner. 


What type of year-end planning have you used in your consulting firm? Leave me a comment and let me know!


If you need assistance creating your 2022 business plan, click the link below to download our free Profit Plan today.