Since the very beginning of Digux we have created a business plan. Each year our business planning process has improved dramatically (This is an understatement). For 2015’s business plan we spent triple the amount of time and the result of this effort has made our vision for the future far more attainable and realistic than before. To be respectful of everyone’s time today we will not outline all of the steps we take to develop our business plan, but we will share several important aspects to give our readers a basic idea of our process then share some of the initiatives we have set for 2015.
Before we start creating our 2015 plan we will dive into the prior year’s plan (2014) and compare it to our actual results on a monthly and quarterly basis. Then we look into our operational/financial metrics and smart numbers to gauge how the year changed over time. Then we evaluate our gross margins for each particular role such as our support desk coordinator, network administrator, internal tools manager, project managers, virtual CIO, etc. so we can see how much it costs to deliver each role based on a per-seat basis. More importantly we calculate our leverage and current run rate which is our current monthly reoccurring revenue plus the average of all other revenue to get a general idea of our financial situation which helps us make assumptions quickly for the New Year.
The next phase of our planning process is creating our 2015 budget. We use our 1 year run-rate and look at revenue, expenses, profitability, and head count by month (example: Jan 2015, Feb, 2015, etc.). Then we do this for our 3 year plan as well. This forecasting process helps us translate our goals into what actions need to be taken with our sales/operations team. Essentially, we now have the ability to figure out how many dials, emails, appointments, contacts, etc. (All the sales stuff we do) we need to complete based on our overall close ratio to achieve our financial goals.
As a way to describe the full scope of the process from a 30,000ft vantage point we create a 10, 3, and 1 year plan to measure where we want to be financially. For example, if in 10 years we wanted to be generating 10 million in annual revenue at a 20-30% profit margin we would then work backwards to figure out what we need to do to get there. We essentially break things down all the way into quarters so we can focus on specific initiatives.
Other things we keep in mind when performing our business planning process is our personal goals and vision. Our company vision, our core values, purpose, and our culture; and most importantly — our customers. Creating a business plan is time consuming and has many different components to consider, but we have learned to make it fun and appreciate the results we get out of putting in all the hard work in advance. There is nothing more rewarding each year when we start our planning process again and look back over the prior year and we achieved our goals.
Our 2015 Initiatives:
• Continue to stay sales focused. We will spend another year in the trenches and improve our inside/outside sales process, warm lead generation, center of influences (COI), and add more MRR each quarter at the right price! We have spent hours on end everyday working on this goal and we are all fired up about our new goals this quarter.
• Continue to improve the hiring process. We need to keep learning awesome ways on to how to attract and bring on A players. We also build Aptitude tests for each role and labs to perform a “working” interview.
• Continue to focus on the traits of becoming a world class MSP. These are known as business planning, know what we sell, sales focus, be process driven, and command!
• Improve our strategy process by using our awesome health assessment tool each week & improving our baseline requirements. We need to keep creating reports and communicating with our customers in addition to driving more documentation, best practices, and processes in our knowledge-base.
• Continue to improve our knowledge-base, best practices, and processes to support our SUPER POWER! Our SUPER POWER is our network administration role which helps our customers improve their I.T. environment every month. That is powerful!