Create your 2024 Business Plan
Nov 14, 2023
We are in the fourth quarter of 2023. By this time of the year, you should be preparing your business and financial plan for 2024 and how you will fulfill your next year's goals.
- When January 1st comes around, you and your team have to know exactly what you need to do every day, every week, and every month, so that by December 31st, you can achieve the profitability you want and deserve.
If you have not started your business plan for 2024, take note of the elements you should consider in your annual planning and use them as a guide to accomplish your business and financial objectives.
1. Team plan
The first element you should be planning for is your team. You have to calculate what will be the needs of your team in 2024, and the starting point is knowing what is your turnover by month and by unit.
By doing so, you’ll be able to know how many people you'll need to hire every month.
Even though you're permanently hiring and investing money in recruiting all the time, knowing this will allow you to proactively plan how to have those hires done when you need them and at the lowest possible cost.
If you want to grow in a multi-unit franchise mode in 2024, another thing you should estimate is when will you open the new units. That will tell you how many people you’ll have to add to your current team and what will be your leadership needs.
This is critical to help you develop the future leaders of your organization on time to have them ready. If you go back from those opening dates, you can determine when you need to hire or promote them, and how much time you need to train them.
2. Revenue plan
Your business plan for 2024 must also include your sales projections and targets, both from the transaction count and the average ticket perspectives since each has different drivers.
- Start by looking at where you were last year and then think of where you want to be next year.
But be realistic because whatever goals you set won’t happen by magic. That means that, along with your revenue plan, you'll have to create your local store marketing plan so you can execute the activities that would allow you to achieve those numbers throughout the year.
3. Income plan
The next element is your profitability. To calculate this you’ll have to make your profit and loss projections for 2024, by month, and for all of your units and at an enterprise level, based on your prior year financial statements.
This will take the most amount of time when preparing your business plan. But if you do it carefully, unit by unit, month by month, I promise your effort will bring you results tenfold.
Think about it! Not only will you be able to understand your business with a high level of detail and accuracy, but you will also identify opportunities that will allow you to achieve the financial goals you want.
When you do your profitability analysis you’ll see where your net profit might be at the end of the year if you accomplish this plan. That number should be exciting! And fuel you to accomplish your business plan so you can actually have that money in the bank.
4. Growth plan
Your business financial plan has to include how you will grow your organization and when you plan to open more units in 2024.
While some of these will be a guess, try to be as accurate as possible and include not only whatever new build units you want to add, but also acquisitions and even relocations.
Your opening plan must include the locations or build-outs, the people and leadership you’ll require, and the capital you’ll need, which is the last element of your business plan for 2024.
Mini tip: How many units would it take to have financial freedom?
5. Capital plan
You need to know when you will either open, acquire, remodel, or relocate existing units and how much these movements will cost.
This part of the financial plan should be conservative. For example: you shouldn’t commit to do something in March when, realistically, you know it won't happen until July. Maybe it’s even best to plan it for August. If you can do it sooner, you’ll have added revenue to your business. But if you put it for March and do it until July, then you won’t have that expected income or you'll have an extra capital you don't really need until later in the year.
The recommendation is to be as accurate as possible on your capital plan so you can support your growth plan, ensure what you’ll bring to the bank, and make those crucial financial decisions.
Those are the elements you have to put together for your business financial plan for 2024. It is easier said than done, and something definitely challenging, especially if you have never done it before.
Our experts at the American Franchise Academy can accompany you to effectively create your business plan for 2024 with our Command Program. This intensive program helps franchisees define, document, and implement systems and have proactive financial and business planning in the organization.
Get more tips on what you can do to thrive and operate a successful franchise by following us on all social platforms, including our YouTube channel and podcast.
Reflections:
- How many units are you planning to open in 2024?
- Do you have enough staff and leaders to operate those openings?
- Have you set your revenue and profit goals and how you’ll achieve them?
- Are you financially able to support all the investments within your growth plan?
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