Rhonda Abrams The Passionate Entrepreneur

While we have a fairly detailed, well-developed process, you can start your business planning with a few simple steps. Just set aside some time -- typically a few hours or a day.

Here's how to develop your 2007 Annual Plan:

• Look at the past: Before going in new directions, evaluate what works and what doesn't. in particular, identify which activities have been the most successful in terms of profit, not just income.

• List your goals: Begin by listing all your goals -- how much money you want to make, products or services you want to add, changes in work patterns or operations.

• Get specific: Now put details with each goal, especially numbers. Let's say one of your goals is to increase sales. Don't just say you'd like to double your income. Instead, list each product or service you offer, and set a goal of a specific number of customers and income for each.

• Develop steps: Identify the steps necessary to achieve each specific goal. For instance, to attract more customers, you'll need to increase marketing. List the ways you'll do this: advertising, trade shows, direct mail, and so on.

• Estimate money: Put a dollar figure next to each step. The more specific you've been with each step, the easier it will be to come up with a range of costs for every goal.

• Estimate time: Things don't just take money -- they take time, too. Next to each step, estimate how much time it might take. For instance, writing a newspaper ad may only take two hours, while exhibiting at a trade show might require five days.

• Estimate people: Figure out who will be responsible for each step and how many people are needed. This gives you an overall sense of the total "person-hours" necessary to achieve your goals.

• Prioritize: By now, you've got a list that would take much more money, time, and people than you have. So, prioritize your goals and steps. Rate highly the things you must do to survive. Next, choose those activities with the highest chance of success. Don't try to do everything; it's better to eliminate some goals altogether rather than attempting all of them part-way.

• Write an action plan: Based on your priorities, come up with an action plan. Schedule the month, week, or day you're going to take action on each step, and what that action will be.

• Do a reality check: Look over your action plan. Does it fit with how you and your employees truly behave? If you plan seems overly ambitious, it probably is. Go back and reprioritize.

• Get consensus: Discuss the plan with all affected parties (employees, subcontractors, family members, etc.). Are they willing to commit to it?

Once you've developed your annual business plan, you're on your way to achieving your goals and being a success in 2007!