How to build an annual plan
With 2021 finally here, now’s the time when people typically set New Year’s resolutions. I’ve never been one to make resolutions for the new year but this year I am inspired to create an annual plan for myself. The source of this inspiration is a video from Jack Conte, CEO of Patreon, outlining his method for building an annual plan:
Jack’s energy is awesome and it is worth a watch. But if you’d rather read about it, everything that follows is from the video with my own responses for 2021. Feel free to skip past my responses in italics. I only included them so that they are public and I feel more accountable to them.
Let’s get started!
Why build a plan?
- Focus. It is easy to lose focus without a plan.
- Know what you want. I think I know what I want. But any time I have ever sat down and forced myself to write and clarify it, I realize that it is not what I thought it was.
- Live your dream. It is satisfying to have a clear vision of your dream future and to make progress towards it.
An annual plan consists of a vision statement, key results, and areas of focus. When you are finished with this process, you will have a clear vision of what your desired future is one year from now and the actions you will need to take to get there.
There are 7 steps to building an annual plan.
Step 1: Ask questions
Ask yourself the following questions and answer them freely. Just brain dump answers to these questions. Do not filter or organize your thoughts until step 4. Below are some questions to ask and my responses to them as an example for how you might go about doing this exercise:
What do you want? What matters to you? What doesn’t matter to you?
I want a launchpad business. Something to get me started. Something that will make it possible for me to quit my day job and free up more time. String Theory is the launchpad business. We need at least $1M in revenue per year before I can quit. I care about creative control. I care about expressing my creativity. Making more money than I make now is not important to me. Time is most important. Let’s make String Theory successful. Worry about revenue now and profit later.
What are you best at as an individual?
I can code. I can design. I like to work. I can string well. I can cook well. I’m good at learning new skills. I enjoy it.
Why are you doing what you’re doing? Why does it matter?
I want to free up time to do more creative work. Creative work requires experimentation and doesn’t guarantee financial success. I need to be able to fail and still put food on the table. I want to create great products and services. I enjoy making things that are useful to others. I want to come up with better solutions to problems. String Theory is a better way for lacrosse players to get their stick strung. It is a better system for stringers and players.
What do you think attracts people to your work?
It is designed well. It has personality. It dares to do things differently. It is convenient. It is more reliable to know who is stringing your lacrosse stick. Stringers get paid more when it is direct-to-consumer.
What are your fans like? What do they get from your work?
My fans are open to trying new things. They get services and products that are designed with every detail of the experience considered, iterated on, and improved. They like the quality, reliability, and convenience of the String Theory service.
What do you want to be doing in 5 years?
I want to have a few businesses generating income. I want to become more ambitious with my business ideas as I have more capital to play with and more experience to pull from. I want my businesses to not require my physical presence anywhere specifically. I want to be able to live anywhere, making things that people love. I don’t want my businesses to be so formal. I want them to have a sense of humor while also offering kick-ass products and services.
Step 2: Do a retro
Think about and learn from your past year using three columns:
What worked? | What didn’t work? | What improvements do you want to make for next time?
Creators have to take a lot of swings and inevitably miss on many. But if you commit to learning after every swing, then 5 years from now you will be unstoppable. Retros ensure that you learn after every swing.
Use problem statements for the middle column. “I need ____” is not a problem. It’s a solution. What is the underlying problem? A need statement is not a problem statement. Why do you need it? Get behind the symptom. Find the problem.
Here’s my retro for 2020:
- Went from 183 pounds to 167 pounds in weight.
- Quit drinking.
- Ate more fruits and vegetables.
- Did physical rehab for my shoulder.
- Got an annual physical and bloodwork done for the first time in many years.
- Doubled savings in a year.
- String Theory was launched.
- We had over 10 customers and 2 repeat customers.
- We partnered with GLE to teach kids how to string at a lacrosse camp.
- Learned about e-commerce and using Shopify now to reduce our workload.
- We have over 170 followers on Instagram.
- Listened to/read at least 10 books.
- Spending quiet time free of distractions with myself daily.
- Learned about film editing.
- Built a pergola for my family.
- Setup a home gym.
- Bought a car.
- Bitcoin and Tesla were great investments.
What didn’t work?
- Not sleeping well. Falling asleep late and not getting enough sleep.
- Never got into a physical hobby like yoga or martial arts which are more functional forms of moving the body.
- Bad money management in the stock market by selling stocks in March when they were getting crushed and buying too much into SPY put options.
- Helmet shields were an unnecessary investment for String Theory.
- String Theory is not meeting its promises of transparency and trust.
- String Theory can be marketed better.
- String Theory needs to support and attract more stringers on the platform if we want to make more money.
- Living at home is stressful.
What improvements do you want to make for next time?
- Focus on getting to sleep earlier and at least 7 hours per night.
- Get a membership for yoga or martial arts classes so that I’m losing money if I don’t go.
- Only sell stock for liquidity. Don’t trust your assumptions about what the market is going to do in the near future.
- Find more living situations outside of home this year even if it costs you more money than you’d like to spend.
- Develop stringer pages and better support stringers on the platform to have their own brands and product offerings.
- Do giveaways on Instagram to grow String Theory awareness.
- Don’t worry about making profit in String Theory yet. Focus on getting more revenue.
Step 3: Visualize the future
Dream up the perfect year based on your questions and retro.
Imagine it is a year from now and you are absolutely stoked with the progress you’ve made in one year. What happened? What didn’t happen? What did you create? Did you collaborate with anyone? What makes you feel proud of your work? What’s your team like? How much money did you get?
Here’s my response:
I moved to Austin, TX. I am renting an apartment for the time being but planning to buy a duplex. I maintained my weight around 165 pounds and I am the fittest I’ve been since high school. For fun, I paddle board and joined a UFC gym for conditioning. I still don’t drink like I used to and I haven’t had a hangover in over a year. Creatively, String Theory has been my focus this past year. We have grown so much. From less than $1K in orders the year before, we made $50K in revenue this year. We have a platform with 50 individual stringers running their lacrosse stringing business through us. We have a few hundred customers subscribed to our String Theory Premier service. I still have the same job that I’m doing remotely because it is providing me a solid baseline of income while leaving me enough free time to pursue and improve String Theory. I am proud of how much we are paying our stringers and the quality of the work they are doing for our customers. Abdul and I have a Slack group with all of them and get great feedback on how we can continue to improve the service.
Step 4: Organize
Organize your answers into buckets.
Up until this point, your answers should just be a brain dump of unfiltered ideas. The key is to separate the organization from the brain dump.
Now, it’s time to organize.
Go through all of your responses from the previous three steps and find the themes.
Naturally, I sorted mine into three pillars of health, wealth, and wisdom since that’s how I plan my quarters:
- Health: Improve sleep, focus on functional movement (sports, yoga, martial arts, etc.), maintain progress in body composition from last year
- Wealth: String Theory is my launchpad business, focus on growth and revenue, don’t worry about profit yet
- Wisdom: Happier (and healthier) without alcohol, find less stressful living situation, keep reading books
Step 5: Write a vision statement
Use your organized answers and brainstorming to write a vision statement for an inspiring year.
Thought happens through writing.
When you write out your thoughts in a linear, logical fashion, it forces your intentions to be clear. Clarify your thoughts in writing.
A good vision statement…
- …gets you PUMPED.
- …is right when you think, “well if THAT happens, I won’t need anything else!”
- …should be specific and ambitious, but achievable. It should make you feel a little bit nervous.
- …should help you see the future. It should be as clear as a photo on your smartphone. If you can’t see the future, it’s not clear enough.
Here’s mine for 2021:
In 2021, I will be living an active, healthy lifestyle without alcohol. I will write everyday and read a book every month. String Theory will fulfill its promise of being the most convenient and personalized way to get your lacrosse stick strung by a high-quality professional. Our platform will have 50 individual stringers and over 100 subscribers to our String Theory Premier service. We’ll take in at least $50K in revenue while investing all profits back into growing the business. It will be insane and our most successful year yet!
Step 6: Choose key results
Brainstorm and decide on binary key results that tell you whether or not you’ve accomplished your vision.
A good key result…
- …is binary. You hit it, or you don’t.
- …is quantitative or qualitative.
- …makes you feel excited!
- …is a little bit of a stretch.
Know what you want. This is what I want for 2021:
- Write every day
- Read a book every month
- Have one weekly physical activity that isn’t weightlifting or cardio (yoga, martial arts, paddle board, sports, etc.)
- Average 7 hours of sleep per night
- No hangovers
- String Theory: 50 stringers, 100 Premier subscribers, $50K in revenue
Step 7: Choose areas of focus
Write two to three areas of focus you’ll need in order to hit your key results and achieve your vision. Think of an area of focus as a “swim lane” or a “sandbox” or a “playground”.
A good area of focus…
- …directs your day-to-day activities, pushing you closer to your vision and goals.
- …should be broad enough to work on for a year or more.
Imagine feeling stuck 3 months from now. Your areas of focus should help unblock you and inspire you to action.
The future is not inevitable. The future is CREATED by humans.
Here’s my areas of focus for 2021:
- Read, write, and exercise daily.
- Grow the String Theory Instagram through monthly giveaways. It attracts new stringers to our platform and gives our brand the necessary leverage to promote them.
- Promote and onboard great lacrosse stringers. The more great stringers we have on our team, the more revenue we will generate. We want at least 50 this year which puts us at a pace of one per week.
- String Theory is not the cheapest service and possibly not the fastest. Optimize design and development for convenience (make it so easy to order) and transparency (profiles, reviews, order status, etc.)
My vision of where I will be in a year is crystal clear now. I have a list of binary key results that need to be met in order to satisfy my vision and I have a few general areas of focus to help guide me along the way and move the needle towards the results I am seeking.
I am pumped! There’s so much to get done this year.
This exercise was worthwhile but I would do it slightly differently if I were to do it again. I should’ve done a separate annual plan from my personal one focused solely on my big project this year: String Theory. It often felt like I was context-switching between what I wanted to accomplish for myself and what I wanted to accomplish for String Theory.
If you know in advance that a particular venture will be important for the upcoming year, I think it deserves its own plan separate from your personal self-development goals.
I wish everyone a happy, healthy, and wealthy 2021. Go out and crush it!