Visions3.amazonaws.com/.../2015/07/Life_Business_Planning.docx · Web viewYour net worth is the...

VISION

Use this worksheet to form the vision of your life and business.

LIFE

What is your vision for your life? Where do you see yourself on 3, 5, 10 or 15 years from now?

Necessity tends to make us look at the short term. A good business plan starts with a long term view

of your life and your business. What does the picture of your life like years from now? Think about

some of questions below to help determine your vision.

WHAT IS IMPORTANT TO YOU?

What is really important to you in your life? How do you set priorities? How would you set priorities

differently if you had more time and money? Would you spend more time on things outside your

business that are meaningful? How do your priorities factor into your life’s vision?

Don’t rush through this section to get to the numbers in the next section. Take some time to do

some soul searching. Goals need to have deep meaning to you in order for you to persevere through

setbacks and failures. Think about how some of the items below impact your vision.

o Family & Friends

o Children College Tuition

o Weddings

o Parental Care

o Retirement or vacation home

o Health / Medical

Copyright 2013 TruMethods, LLC. All Rights Reserved. www.trumethods.com

WHAT DO YOU LIKE TO DO?

What are you passionate about? If you could do anything, what would it be?


FINANCIAL GOALS

Your vision has a price tag. In order for your life’s vision to become a reality you will need to set

financial goals. There are two primary financial goals to consider; net worth and annual earnings.

Your net worth is the value of your assets minus your liabilities. For our purposes we will focus on

your net worth outside of the value of your business and primary residence. You don’t really know

what your business will be worth 5 or 10 years from now or if you would be able to sell it.

Also, we don’t want to include your primary residence. You need to live somewhere and the value

of your residence is not a liquid asset. For this exercise we’re just going to focus on the after-tax

cash you want to accumulate to reach your goals and live the life you envision. We will call this your

Liquid Net Worth.

LIQUID NET WORTH GOAL

A Liquid Net Worth Goal

B Cost of Life Events

ex. Children College Tuition, Weddings, Vacation Home, Parental Care, Health / Medical, Other

CTotal “After Tax Net Worth Goal”

(Row A plus Row B)

DTime Horizon (in years)How long until you reach your goal?

EAnnual “After Tax Savings Goal”

(Divide Row C by Row D)


Note: In reality, your Annual “After Tax Savings Goal” would be a little less if you factor in the

interest earned on savings. Example: to save $1,000,000 over 10 years assuming 5% annual

interest you would need to save $79,000 a year.

ANNUAL EARNINGS GOAL

How much money do you need to earn to reach your annual after tax saving goal? You will need to

earn enough to pay taxes and pay all of your personal living expenses. The goal of this section is to

determine the annual net profit required for you to achieve your financial goals.

FAnnual “After Tax Savings Goal”

(Row E from previous table)

GAnnual “Personal Living Expenses”What does it cost to run your household? This

is the total of all of your personal expenses.

HTotal “After Tax Income” required

(Row F plus Row G)

I

Annual “Pre-Tax Income Goal”

(Divide Row H by 0.65)What your share of the business needs to

generate in for you to reach your goals.

Dividing by 0.65 is an estimate of the income taxes based on your effective tax rate. For our

example we used an effective tax rate of 35%. Your tax rate will vary by locale and tax bracket.


J Your Current Annual Salary

KAnnual “Net Profit Goal”

(Row I minus Row J)

This is the profit you need to generate over and above your salary to reach your “Pre-Tax Income

Goal” (Row I)

NOTE: If you have partners in your business, you need to factor in your combined goals for the

Annual “Net Profit Goal” (Row K)


BUSINESS GOALS

Now that you have an idea of what you want your life to look like over your time horizon, you need

to think about the role your business will play in your life’s vision. Your business impacts both your

financial situation and your work/life balance. What does your business need to produce and how

does it need to behave for you to reach you goals. The difference between where your business is

today and where it needs to be in order for you to reach your long term goals is the basis of your

business plan.

WHAT IS THE PURPOSE OF YOUR COMPANY?

Think back to when you got in this business. Think about your hopes and dreams. Why did you

want to take on the risk and responsibility of owning a business? Do you have the same sense of

purpose today that you did at the beginning? What does your company mean to you?


WHAT ARE YOUR COMPANY’S CORE BELIEFS?

What are the cores beliefs you want to build your company on? This involves your company’s

relationship with your employees, customers, the industry and the community. How do you want to

impact every customers business or every employee’s life? Are you goals bigger than just you or

bigger than just money? Goals are more powerful when they impact others. Your goals need to

involve more than just money.

WHAT ROLE DOES YOUR BUSINESS PLAY IN YOUR VISION?

Your business needs to generate enough income and net worth for you to achieve your life’s vision.

In addition to funding your vision your business must allow you to have some control over you time.

How many hours do you need to work? Can you spend your time in the business doing what you

like to do? What relationship do you need to have with your business to live the life you envision?

The size and profitability of your company as well as the structure of your team will determine your

relationship with the business.


BUSINESS TARGETS (3 YEAR)

Now that you have determined the annual net profit goal required to fuel your life’s vision the next

step is to create a business plan to reach you goals.

You will begin by developing three year business targets. Three years is a good time frame to ramp

your business to the required level of income. You can achieve dramatic changes in results over this

time frame. You should be able to reach your three year goal even if you encounter unforeseen

setbacks or frustrations. Your primary goal is to determine the amount of MRR you will need to add

over three years to reach your goal. Your recurring revenue base will drive your margins. Your sales

and marketing plan will be geared around your MRR goal.


Date Ending:

L Annual “Net Profit Goal”(Row K from previous section)

M Projected Net Profit Percentage

N Annual Revenue Required(Divide Row L by Row M)

O

Projected Revenue from Recurring Services (%)

What percentage of revenue will come from recurring services?

P Annual “Recurring Services Goal”(Multiply Row N by Row O)

Q

3 Year MRR Target(Divide Row P by 12)

This is the MRR you want to achieve at the end of 3 years.

RCurrent MRR

This is the amount of Monthly Recurring Revenue you have.

S

Net MRR Sales Goal(Subtract Row R from Row Q)

This is the amount of Monthly Recurring Revenue you need to add over the next 3 years.


ONE YEAR PLAN

This section will turn your 3 Year Targets into a One Year Plan. Based on your three years targets you

know how much Total Annual Revenue and MRR you will need to add. You also have set a target for

the percentage of Total Revenue that will come from Recurring Services. Using this information and

the knowledge you have of your current financials you will develop your One Year Plan.

First, determine your goal for each revenue category. Your revenue categories include Recurring

Services, Non-Recurring Services, Product Revenue and any other revenue sources. Use your current

revenue level for each category as a baseline to determine your annual goal. For recurring services

project your annual revenue based on your current MRR and then add the addition revenue you will

recognize based on your sales plan.

Next, fill in the Smart Numbers section. These are key numbers to track over the next year. You will

monitor your Smart Numbers during each FormulaWon Quarterly Business Review (QBR).

Finally, list the 5 most important things you need to do to make your One Year plan a reality.


Date Ending:

T

Annual MRR Sales Goal(Divide Row S by 3)

This is the amount of Total MRR you need to add this year.

START WITH YOUR CURRENT ANNUAL REVENUE AND ADD THE

PROJECTED ANNUAL REVENUE BASED ON YOUR PLAN. THINK ABOUT

EACH OF YOUR REVENUE CATEGORIES:

Recurring Service Revenue

What will your Recurring Services Revenue be in 12 months based on your current revenue and new MRR you plan to add?

Non-Recurring Service Revenue

How much Non-Recurring Service Revenue do you plan on doing in the next 12 months?

Product Revenue

How much hardware and software will you sell in the next 12 months?

Other Revenue

Do you have any other sources of revenue?

Total Revenue


SMART NUMBERS

Current Target

MRR

Monthly Recurring Revenue

Average MRR

This is the amount of MRR billed per client. Divide your total MRR by the number of client agreements.

AISP

This is the price you charge on average per seat. Divide your total MRR by the number of end users you support.

Net Profit (%)

Recurring Services Revenue (%)

Service Revenue / Employee

This is the amount of total revenue per employee. Divide your total service revenue by your number of employees.

Service Revenue / Tech

This is the amount of total revenue per technician. Divide your total service revenue by your number of technicians.


WHAT INITIATIVES DO YOU NEED TO FOCUS ON OVER THE NEXT 12

MONTHS TO REACH YOUR GOALS?

1

2

3

4

5


QUARTERLY ACTION

Set your quarterly revenue targets for each revenue category. This should be easy since you already

have your One Year Plan. Then calculate your sales goals for the quarter. Your Quarterly Sales Goals

will be used to build your Inside & Outside Sales Playbooks. Finally, list the 5 most important things

you need to do to reach your quarterly goals. By completing this section you will have set short

term goals that align with your business plan and your life’s vision.

Date Ending:

REVENUE (QUARTER)

Current Target

MRR ($)

Monthly Recurring Revenue

Non-Recurring Services Revenue ($)

Revenue from projects, break / fix and T&M.

Product Revenue ($)

Revenue from hardware and software licensing

sales.

Other Revenue ($)


SALES GOALS

VQuarterly MRR Services Sales Goal

(Divide Row T by 4)

W# of new Managed Services Agreements

(Divide Row V by your Average MRR Target)

# of Sales Appointments Required

(Divide Row W by your Projected Close Ratio)

A good projected close ratio is about 20%.


WHAT INITIATIVES DO YOU NEED TO FOCUS ON OVER THE NEXT

QUARTER TO ACHIEVE YOUR GOALS?

1

2

3

4

5


DAILY, WEEKLY AND MONTHLY ACTIONS

BUILD YOUR PLAYBOOK

Use the information from the Sales Goal Calculator (located in the members portal) to build your

Sales Playbooks. Determine the process you will use to manage your sales engine. Set up your

weekly sales meeting. Our “Sales Meeting Structure” video was on the topic of how to run your

sales meeting. Remember, you need to have a weekly sales meeting even if you are the only

attendee. Be sure to attend every FormulaWon “Virtual Sales Meeting”. The monthly “Virtual Sales

Meeting” is designed to provide training, perspective and discipline.

TRUMETHODS QUARTERLY BUSINESS REVIEWS (QBR)

The TruMethods QBR’s are the discipline you need to put in place to track your results each quarter.

Tracking activities and results is critical to achieving your goals. You should complete the QBR,

review your business plan and update each quarter. You should also complete a new quarterly plan

each quarter.

OTHER ITEMS TO CONSIDER

OPERATIONAL PLAN

What people, process and technology do you need to deliver quality support based on your business

plan? If you’re planning to add operational staff you should tie your hiring to revenue and the

number accounts you manage. Also, watch our Service Delivery webinars including “Finding the

hold in the bucket” to align your delivery teams with revenue.


VARIABLES

Take some time to think through all of the variables that could impact your plan like:

Capital

Human Resources

Technology

Sales Engine

SHARE YOUR PLAN

Let everyone in company know your plan and the role they will play in its success. If you don’t have

any employees, share your plan with your spouse or a business mentor. Sharing your plan with

others will make you more accountable!

FINALLY…

SCHNIZZ!You have done the hard work; now add this final ingredient to ensure you will have the self-

discipline to go the distance.

Visions3.amazonaws.com/.../2015/07/Life_Business_Planning.docx · Web viewYour net worth is the...

Documents

Transcript of Visions3.amazonaws.com/.../2015/07/Life_Business_Planning.docx · Web viewYour net worth is the...