In this episode we dive into annual planning. All companies need annual plans, but most companies don't know how to build great plans. What does a great plan look like? How do you make sure your team believes in your plan? We are here to help! In this episode we answer questions including:

• What should be part of an annual plan?
• How do I get my team bought into my plan?
• How aggressive should our annual goals be?

All of these questions were submitted by listeners just like you. You can submit questions for us to answer on our website TheStartupHelpdesk.com or on X/Twitter @thestartuphd - we'd love to hear from you!

Your hosts:

• Sean Byrnes: General Partner, Near Horizon www.nearhorizon.vc
• Ash Rust: Managing Partner, Sterling Road www.sterlingroad.com
• Nic Meliones: CEO, Navi www.heynavi.com

Reminder: this is not legal advice or investment advice.

Q1: What should be part of an annual plan?
Revenue is the centerpiece of startup annual planning. Goals that directly tie to revenue include: Distribution, Engagement, and Churn.

Other goals that correspond to revenue include:
- Product milestones, particularly those that correspond to features customers want.
- Launch dates.
- Runway and budget.
- Hiring.

Most importantly – all these lower level goals should clearly impact the higher level goals like revenue – so don’t agree on a launch date for a new feature if you do not also expect it to drive a meaningful increase in revenue.

Before you start your annual planning, make sure to align your goals with the reality facing your startup.
- For a pre-revenue startup: the goal is to start growing.
- For a startup that has validated demand: the goal is to accelerate growth.
- For a startup that recognizes that something critical is not working: the goal is to validate that next major hypothesis.

Q2: How do I get my team bought into my plan?
Ambitious goals require better performance across multiple teams. You need them to work together instead of pointing fingers.

Start with an objective evaluation of your metrics. How’s your pipeline? How are your conversions? Anything that is not performing well enough needs to improve, regardless of function.

This is where great communication and leadership ability really shines. An ambitious goal requires that you convince others to do great work. Telling people to do the work is easy. However, motivating people to want to do the work is a different story entirely. You need to galvanize all teams around a big goal.

Consider different ways to deliver your motivating message. For example, if both teams need to improve performance in order to achieve your goal (which is likely), then craft a plan that focuses on ambitious targets where you are going to “test assumptions” about ways you can unlock even greater performance. Testing an assumption can unify folks around a common goal instead of pointing fingers.

Q3: How aggressive should our annual goals be?
Investors invest in growth. 3x growth is an accurate benchmark for what investors expect for a startup. However, the business needs to grow on its own; you can’t always push it. If that growth is not possible, you might just not be a venture-backable company. Depending on your industry, you might have different goals. Talk to your investors!

As an alternative, set a realistic goal: get profitable.
- Cut costs.
- Raise prices.
- Focus on your most engaged customers.

That way, you don’t need to raise or at least you won’t need to raise urgently.