Creating your 2010 Operating and Financial Plan

I spent much of my day today helping one of our portfolio companies approach the task of creating their 2010 operating plan. Being clear on your operating and financial plan is key when running any expansion stage technology company or trying to approach raising venture capital financing. There are a lot of moving parts that you need to take into account when doing this. Below are some basic tips:

1. Re-affirm your company aspirations. Spend time assessing your current mission, vision and values and determine whether any adjustments need to be made.
2. Be clear on your overall strategic themes for 2010. Overall, what direction are you working towards?
3. Establish clear goals and initiatives that align towards your strategic themes. They should be S.M.A.R.T. (Simple, Measurably, Attainable, Realistic, Timely)
4. Translate your goals and initiatives into an overall Operating Plan. Where you are at today and what you need to do to accomplish your 2010 goals and initiatives (staffing, capex investment, reorganization, capital infusion, etc.)?
5. Develop a financial plan that economically depicts how you will execute your overall operating plan. This is where you need to fully understand your economic model and manifest it into a full financial plan.
6. Get alignment amongst all your key decision makers and stakeholders on all the above (board and senior managers).

Obviously the above steps are very complex and lengthy. Many times companies will dive too quickly into trying to create a financial plan without understanding what it is they are trying to achieve with the business. The key is to envision how the business will look at the end of next year and determine what needs to happen to get there (and test whether this is realistic by assessing against current performance and discussing with key stakeholders). 

Good Luck!

Kobie