Prioritize Your Business Model for Annual Planning
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You’ve probably gotten the message by now that it’s annual planning season. (If not, see here, here, and here.)
But if you’re getting caught up on all the things you could be doing in the business and not sure which things you should be doing, here’s a tip:
Focus on your business model.
Your business model is based on a few key inputs that determine whether the company wins or loses. There are dozens, even hundreds of things to measure in your business. Your job is to narrow your focus to the ones that matter most.
Here’s an example. In Crews & co., the key numbers that drive our business model are:
- Client retention: number of months that clients stay with us
- Client lifetime value (LTV): total dollars that clients spend with us
- Cost of acquisition for clients (CAC): dollars we spend to get a new client
*One other key number is gross margin, but we’re able to control that effectively in our company. So it’s baked in as part of the targets we set for these three measurables.
For each number, we have a target metric. If we achieve or outperform that metric, we’re in good shape.
If not….that’s where the work lies.
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To make this abundantly clear: if your business model doesn’t work, no amount of sales success can save your business.
I’ve learned this lesson firsthand. Ended up $2 million in debt because every project I delivered cost me more than I made selling it (this was a case where I didn’t have gross margin figured out, and it took me a decade to dig myself out of the resulting hole).
The primary goal for the entrepreneurs and CEOs I work with is usually one thing: growth.
And I love helping them achieve growth. But growth is separate from having a well-functioning business model.
You can have one or both problems inside your company. They are separate problems, though, and you need to know how to tell the difference.
As a client of mine who recently sold to a Fortune 500 company likes to say, “You can’t sell your way out of every problem.”
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If you don’t know the key inputs for your own business model, that’s the first order of business. You can’t evaluate your model until you figure out what it is.
Talk to your CFO, run a search on Google or your AI model of choice, or contact our consulting team. There are probably standard inputs for your industry that can serve as a good starting point.
Then, as your reflect on your goals for 2026, think about OKRs that might fill any gaps or shortcomings in your model.
Suppose the model I described above for Crews & co. was completely broken. (Luckily, it isn’t.)
Here are a few goals we might set to address our gaps:
Objective:
Improve client retention
Key Results:
- Add consultant touchpoints
- Incorporate 6-month pulse surveys
- Establish plan for client roundtables
Objective:
Increase client lifetime value
Key Results:
- Focus on improved client retention (see above)
- Transition 3 smaller clients into expanded engagements
- Acquire 3 new recruiting contracts for internal HR services
Objective:
Decrease cost of client acquisition
Key Results:
- Audit all marketing spend
- Double down on top-performing channels
- Pause channels not delivering sufficient ROI
As you can see, there could be quite a lot to do, generated from tweaking your business model alone.
Maybe add one more growth-focused OKR, and you are set.
Remember to Keep It Simple: if you were able to optimize your business model, how much better off would you be? Far better than if you set too many goals and only get 40-60% of the way there on all of them.
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If you need help, now is the time to ask for it. You’ve got 2.5 months left to prep for a killer 2026. I want that for you, and I want you to have support if you need it.
