Planning for 2025: How to Create, and Communicate Your Startup's Plan

Tips for Mastering Your Annual Planning Process

DEAR STAGE 2: We usually do our planning process in December, but as the company has gotten larger and more people have input, we’re worried it is going to take longer. What does this process look like for most series A companies? How long does it take and what are the steps? ~Planning for ‘25

DEAR PLANNING FOR ‘25: Ah, the joys of planning season! The planning process definitely extends and increases in complexity as you grow the leadership team, but there’s a lot you can do to proactively manage it. We like to see our portfolio companies kick this off as early as possible and have at least a first draft ready in November with plenty of time to tweak and finalize before the start of the year. Getting ahead of this process allows you to get a jump start on hiring, ensure you have your quotas and comp plans rolled out on time and kick off the new year on the right foot! 

In order to bring this advice to life, we called on Zach Garippa and his team at Order to share what has worked for them over the last few years:

1. Start with a Clear Goal in Mind

“No surprises” is the theme. Before you dive into the nitty-gritty, you need to align on your north star. Where do you think you'll end 2024, and where can you realistically get to in 2025? 

Are you gearing up for another funding round, or is profitability your endgame? These aren't decisions you make in a vacuum. Your CEO, executive team, and board need to come together and agree on these guideposts. For example, if you're aiming for profitability by December 2025, that needs to be clearly communicated and memorialized at the start of your planning process.

2. Rely on Actuals and a Bottoms-Up Model

Now that you have a goal, go back to basics and look at your actual data. Take the time to review your historical performance data and build the first version of your plan. This isn't the time for wishful thinking or pie-in-the-sky projections. Use our bottoms-up template as a starting point and check out this advice from my Partner, Mandy Cole as you dig in. 

As tempting as it might be to plan based on what you want your payback rate to be, or what you think your conversion rates should be, resist that urge. If your reps are closing 2.5 deals a month at a certain ACV, don't assume those numbers are going to jump to 3.5 and increase by 50% in January. Yes, you'll want to make assumptions and need strategies to improve, but start with where you are, not where you wish you were.

This doesn't mean you can't be ambitious. But your ambitions should be grounded in reality. Once you have your bottoms-up complete you can start layering in hiring plans and assumptions.

3. Project Manage the Building of the Plan

Annual planning is a project, and you have to treat it like one. Build a timeline, publish it, and manage your team to the various deadlines. And build in buffer time - you'll need it.

Start with a schedule. For example, if you want a first draft of the plan complete by November 6th then you can start working backwards. By one week earlier, X needs to be done and 2 days before that Y should be complete. Don't let a cascade of scheduling and delays be the problem. There will be more iteration than you expect, so build that in. Generally that first plan is going to be reviewed by your board, so the Q3 board meeting can create a good deadline to work towards. You can then fine-tune between November and January to ensure you are locked and loaded going into Q1. Here’s an example from Zach to get you started:

• 7 weeks out: 

  • CEO finalizes OKRs and overall strategy. 

  • Draft a concise summary of goals and rationale. 

  • Collaborate closely with the Chief of Staff and Head of Finance. 

  • Consult with co-founders for input and alignment.

• 6 weeks out: Socialize strategy and OKRs with executive team to ensure buy-in.

• 5 weeks out: Distribute strategy and OKRs to executives. They begin engaging their individual team leaders.

• 3-4 weeks out: Executives (functional business leaders) develop their departmental plans, working closely with Finance.

• 1-2 weeks out: Present holistic view to the Board and allow executive team to review each other's assumptions. Expect burn rate and costs to be high at this stage. Consider sharing the detailed plan with 1-2 board members for preliminary feedback.

• Board Meeting week: Present the plan! (aim for 95% completion with room to adjust).

Communication is critical during this process. Designate someone (Finance, Chief of Staff or maybe a founder) to own the process, project manage and ensure every leader is kept in the loop - this all starts with sharing the top line goal AND bottoms-up financial info early so you are working with the same info. 

As you iterate on the place, we recommend starting with GTM. You need to nail down the growth plan before you start building hiring plans and layering costs from other departments. 

4. The Plan is the Plan is the Plan

Once your board approves the plan, that's your plan for the period (usually a year, sometimes six months at a time). But here's where it can get confusing - your sales team will have a quota, and it's usually higher than the board plan. Often 10-20% higher to allow for hiring delays, team turnover, and underperformance. 

Throughout the period, you should track progress and predict how you are "pacing to the plan", but the plan doesn’t change. But here's a crucial caveat: if you're far off the growth plan, monitor burn closely and be prepared to scale back.

One final tip from Zach: In October 2024, Zach will write his year-end 2025 quarterly update. You read that right - he is literally writing the one pager in present tense reflecting on and celebrating a great 2025 and sharing it with his exec team. What better way to kick off this planning season!

Until next week!