As we enter the final quarter of the year one thing that starts to get on a founders mind is strategic planning for the upcoming year. You want to maintain your focus as an entrepreneur on what matters most. You want to keep your board and investors aligned on your approach and guiding principles. More tactically, you need to keep your organization and teams aligned on the mission and focus as you (hopefully) have another great year. At the early stage of a company’s life, strategic planning can be incredibly hard given how early the business is. A lack of repeatability abounds without much by way of process, framework, or true foundation. For those in this phase of growth, below is some key consideration points closing out your final quarter of the year and thinking about strategic planning for the next twelve month.
1. Too Many Goals Kills Companies. Often times in a early stage company there are so many “hair on fire” problems you don’t know which ones to put out. Compounding this is usually a lack of capital and resources. We generally find founders going though strategic planning exercises picking too many things to focus on. Five Objectives with ten Key Results. A Mission statement but a laundry list of twenty things that input into that. It all makes it challenging for both you and your employees. Through strategic planning, arrive at the three or four main goals for the next year and be OK with that.
2. Remember The Inputs To Revenue. For business software companies we invest in, one of the easiest key strategic planning outputs is achievement of some quantitative numbers. These are usually revenue or customer numbers. What should be paid attention to through your strategic planning process is how you are going to achieve those numbers. Think about the sales velocity equation and the inputs that matter. Think about pipeline coverage and how you are going to keep a large enough funnel through the year. Being honest with yourself and making this a large part of strategic planning should help you accurately forecast and manage the business for the next year.
3. Motivation & Honesty Give You Leverage. As a founder, one thing we see consistently discounted is how motivating a strategic planning process (and accompanying sessions) can be. For your managers and individual contributors, this process is enlightening, helps with collaboration, and really can supercharge an organization. The honesty piece will help founders and executives see what can really be done on an annual basis and serves as a great learning exercise around collaboration and cross functional strategic planning.
Strategic planning is one of the forgotten keys in early stage companies (a lot of folks fall back on “we don’t have product/market fit yet so can’t plan”) and can benefit you and your business in material ways. We hope you value these lessons and thoughts.
If you liked “Strategic Planning For Early Stage Companies” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog.
Below we have compiled a list of metrics that could be relevant for most B2B marketplaces and hope that it serves as a framework for tracking KPIs for success.