The Step-by-Step Annual Planning Guide for Overachievers

I use to be a horrible annual planner. Then I read everything I could find on planning, spent thousands on workshops, and iterated my process over ten years. Now, I’m badass at this.
I’m going to teach you everything I know about annual planning. This won’t be easy. This is designed for overachievers. I’ve held nothing back.
So, why go through this process? It’s a major time commitment. I’m investing four days into mine.
First, it lets me zoom out and see the bigger picture.  It’s hard for you to see the bigger picture when you’re stuck in an endless loop of emails and zoom meetings.
I reached a crossroads last year. I was no longer excited about running affiliate marketing campaigns or creating courses. The feeling was lingering for years. So last year, I spent a significant amount of time confronting this feeling.
And then I realized I needed to move on from this industry. I wanted to move on to projects that I could be obsessed about.
Second, it helps you connect the dots. There was a lot of pain this year. None of our years went according to plan. What lessons can you learn so you don’t repeat the same mistakes again?
Finally, you’re infinitely more likely to achieve your desired outcomes. I believe that a successful life comes from doing hard things.
Talking about teamwork is easy. Firing your employee because you realize they’re not a great culture fit anymore is hard.
Declaring your goals on Facebook is easy. It’s hard to think, analyze, and reverse engineer how you’re going to achieve your goals.
That’s my mantra for 2021 – “Do hard things.” Everyone wants to take the path of least resistance. You won’t have much competition when you choose the harder path.
Many people won’t bother with annual planning because life’s too unpredictable. Look at how 2020 went for everyone. I get it.
But here’s the thing: the discipline of planning means you’ll react better. 
“You know the business plan won’t survive its first encounters with reality,” he says. “But the discipline of writing the plan forces you to think through some of the issues and to get sort of mentally comfortable in the space. Then you start to understand, if you push on this knob, this will move over here and so on. So, that’s the first step.” – Jeff Bezos
Life is like jazz. There’s a score you could follow exactly, but you have permission to riff and make the music bolder.
I don’t know what 2021 has in store for us. But I promise you that your year will be better if you invest the time into annual planning.
You bring the energy – I’ll give you my exact blueprint.

Some Notes Before You Start

There are a few things you should do before you get started.

0.1 Be in the Right Environment

Don’t do this in your home office. You’re too close to the trenches. You need an environment that inspires you.
Look at how Muhammad Ali trained for his fights. His original training camps were in Miami. He had to leave Miami. Too distracting. He built a new training facility in Deer Lake, Pennsylvania. It was called “Fighter’s Heaven.”
It gave him complete focus to train for his big fights.
You need to find your “Fighter’s Heaven.”
Here’s my formula:

• Rent an Airbnb that’s within driving distance. Around one or two hours away is good. Don’t deal with the stress of airports.
• Be close to nature.  I want you to be able to open your door and see a forest, a mountain, or a lake. This makes a difference.
• Don’t be too far from civilization. I like to still be 30 minutes from a town. Going out for dinner each night is my reward.
• No outside work. You’re here for the annual planning. No meetings. No checking email. Be disciplined.

 An example of the vibes I want. Just make sure it has WIFI. Photo credit: Pixabay.

Here’s my schedule this year.
Sunday: Leave at 4pm. Settle into town.
Monday: Day 1 Reflections. Go into town for dinner.
Tuesday: Day 2 Planning. Go into town for dinner.
Wednesday: Drive home at 11am.
I know it’s tempting to try and shorten your trip to save money. But you don’t want the check-in, and check-out processes to interrupt you.

0.2. Adapting This to a Team

This guideline is for individuals doing their personal planning, but you can easily adapt this to a team.
If you have a team, then I recommend doing two separate annual plans.
For the company version,  I recommend doing this in person with your employees. It also doubles as facetime if you’re remote.
(Note: This article is meant to be evergreen. If you’re reading this in the middle of the pandemic, you can do this via Zoom)
Do your personal annual planning the weekend after. Don’t do it back to back.
I tried it once. It sucked. I had no energy after the company one.

0.3. Sweep Your Digital Dust

It’s important for Chinese people to clear their houses for the New Year. It symbolizes a wish to put the past behind, say goodbye to the past year, and welcome in the New Year.
We’re going to do a digital version of this. I want you to inbox zero everything.

• Answer all outstanding emails.
• Go through your Task Manager and clear out tasks.
• Clear your laptop. I love doing a reformat of my laptop!

0.4. Do Your Homework

Annual planning can be mentally and emotionally draining. Take some time to go through this article.
Is there anything that you’re missing? You might not have a list of core values yet, or a life’s mission statement written. That’s OK. You can work on it now.
Create a checklist. Gather all your financials and documents in one place. Make everything frictionless for yourself.
You want most of your energy during the retreat to be spent on thinking.
This framework will be intimidating if it’s your first time doing it. Give it your best shot. Don’t skip any sections. It’ll get easier with practice.
And don’t feel the pressure to do all this in a few days. It’s fine if you’re still working on this after January. Focus on progress, not perfection.

Day 1: Looking Back

Ray Dalio is the most successful hedge fund manager in the world. His favorite principle is “Pain + Reflection = Progress.”
He believes that every pain we go through in life contains a “gem.” But we have to spend time reflecting to uncover those gems.
We’re going to spend the entire day reflecting. I’ll give you some frameworks and questions to guide you.

1.1 What Happened This Year?

It’s been a long year. Take a walk down memory lane. Go through this year month by month.
Write down all the major events that happened each month. It can be hard to remember. Go through your calendar, emails, and task managers to help refresh your memory.
January:
February:
March:
This is easy if you have a system of doing a monthly review.

1.2 Deep Dive into the Different Departments

Life and work can be organized into departments. This helps us see in detail how we’re performing in different areas.
Your company is generating record profits. If you look at your company as a whole, you’d think that nothing’s wrong. But analyze each department. You might notice that the customer service department is lacking.
It’s taking five days on average for customers to get a response. They’re starting to leave bad reviews everywhere. Influencers are starting to trash your products. These are leading indicators. If you don’t improve this department, then it’ll affect the future of your whole company.
This applies to life, too. I’ve seen many people go “all in” on their businesses for years. Their wealth and career might be a 10/10. But what happens if their health or relationships go down to a 3?
I don’t believe someone’s life can truly be “balanced.” We’re looking out for “danger zones.” We’re making sure no areas of our lives are weak enough to hold us back.
Let’s look into the departments.
I categorize my personal life into these buckets:

1. Work
2. Financials
3. Fun/Enjoyment
4. Skills/Learning
5. Health
6. Relationships

You can get more granular with each area.

Health -> Mental Health, Exercise, Diet
Relationships -> Family, Significant Other, Friends, Children
Financials -> Budget, Retirement, Investing, Taxes, Robustness
Adjust accordingly for your life.

A few things that I’m looking for:

1. Am I balanced in the way that I want? I spent too much time playing video games this year. I spent too little time studying Spanish. Seeing this lets me think about how I can adjust my systems and environment next year.
2. Are there any areas of my life that are underperforming? I’m not doing as well in the friendship subcategory this year. Quarantine made it tough, but I could’ve called more people. I’m going to make an effort to improve next year.
3. Did I achieve what I wanted in these areas this year? Why or why not? Identify the obstacles in your way.
   
4. Give yourself a score in each area. Rank yourself out of 10. If you’re scoring high in an area, that’s a signal to keep doing whatever you’re doing. Scored low? That’s a signal you need to make some changes.
5. What systems can I build? I didn’t understand the importance of mental health in my 20’s. So my solution is to create different systems to maintain this area. Some of these include daily meditation, journaling, seeking therapy whenever I needed it.

Let’s look at the departments in a business.

1. Product
2. Marketing
3. Finance
4. Operations

If you’re a bigger company, then you can add in departments like customer service, project management, etc.
I recommend keeping it simple. Too many departments mean you’ll start losing focus on what matters.
If you’re doing an annual review with a team, then every department head should prepare a report. Let them own it.
Here’s an example for Finance:

• Show the numbers. Income statement, balance sheets, cash flow forecasting. Make charts and graphs where necessary.
• Explain the numbers. Not everyone understands finances. Their job is to make it easy for the rest of us.
• What happened this year? “I don’t think Charles spending $3,000 at Spearmint Rhino in Las Vegas was the best use of our funds.”
• Recommendations for next year. “Our monthly software and subscriptions expenses are at $6,000 a month on average. Here’s how we can bring it down to $4,000 a month.”

Analyzing a department is simple if you’re already using a framework such as Objective and Key Results.
Compare this year’s results to what was planned. How did the Key Performance Indicators line up?

1.3 Reflect on the Year

Now you have a clearer picture of what 2020 was like. Now it’s time to make sense of what happened.
Here are a series of questions to help you reflect.

• What Were My Big Wins This Year?
• What Were My Losses This Year?
• What Happened This Year That Surprised Me?
• What Were the Biggest Lessons I Learned?
• If I had a time machine and could go back to one year ago, what would I have done differently?

DO NOT BREEZE THROUGH THIS QUESTIONS.
I go into thinking time mode in this section. You’ll see that the first few answers you have will come easily. Then you’ll be “stuck” for a few minutes. The next answers? That’s where the gold is.
You have to be honest with yourself. Let’s say you set a goal to lose 15lbs this year, and you gained 15lbs instead.
It’s easy to blame quarantine. The gyms were closed, and it was easy to stress eat. It’s bullshit and we both know it.
If someone had a gun to your head, you would’ve found a way to exercise. You could’ve run outside. But you didn’t. This is where you have to go deeper to understand what happened.
You can’t make improvements if you’re not aware. If you have trouble with self-awareness, then it can be helpful to ask for constructive feedback from others.

1.4 Evaluate Your Mission and Core Values

We need purpose in our lives to feel fulfilled. We need a reason to wake up in the morning besides collecting a paycheck.
This is the part where I ask myself, am I living up to my mission? Am I living according to my values?
One of my core values is to “push my comfort zone.” Everything that I want in life comes from pushing it. It’s what encouraged me to move to Asia, start speaking publicly, and even start this blog.
I didn’t do a great job this year of pushing my comfort zone. Some of my original plans weren’t possible due to quarantine.
I hold myself accountable, though. I could’ve made adjustments on a quarterly or a monthly basis. There are plenty of ways to live up this value even if I’m stuck at home.
That’s it for Day 1. It’s time to recover. I’ll go for a jog in the area. Go into town to grab some dinner. And then I’ll watch something on Netflix.
Go to bed early. Make sure to get plenty of rest for the next day.

Day 2: Planning Next Year

We did a thorough analysis of 2020. You understand what happened this year.
Now it’s time to look forward.

2.1 Review Your Long Term Goals

Before I start planning the year, I want to do a quick refresher on the bigger picture of my life. You need to know where you’re going before you start planning your trip.
Steps:

• Review Your Life Mission
• Review Your Core Values
• Review Any 3- or 10-year Goals You’ve Set

You also need to evaluate if these long term goals are still relevant to you.
At one point, I wanted to write a book. Now? I have zero interest in it. The desire is still there to teach and help people. But maybe a book’s not the best method for me.
Starting a podcast sounds more fun and interesting to me than writing a book.
Don’t be afraid to change your goals if they’re no longer relevant to you. My destination is the same, I’m just taking a different road to get there.

2.2 Write Out Your One Year Vision

Most people start listing out their goals. There’s a valuable step before that called the Vision Story.
You write out what you want your life to be like a year from now.
I’ll write an imaginary example:
“I will quit my job. My affiliate marketing side hustle will grow to a profit of over six figures a year. This freedom will allow me to travel the world. I’ll explore living in Asia, Eastern Europe, and South America.
I will take my fitness more seriously. I’ll drop down to 185lbs and 10{57b8cc37fd24bce1cf64c8b05d9407ce9171516056c1f5e762677747187a0de4} body fat. I’ll do this through a combination of CrossFit and dieting. In order to perform at my best, I will be completely sober. I won’t drink any alcohol, smoke any weed, or do any drugs.
I am single now and am fine being single next year. However, I’ll definitely date a bit when I’m in different countries.
I don’t have a great social circle where I’m at right now. I want to network with more affiliates and entrepreneurs next year. I’ll go to several conferences.”
Do you see how much easier it is to plan your future if you just write it in story format? If reading your story doesn’t excite you, then you need to think bigger.
I suggest writing out an entire page’s worth. The more detail you give, the better. The details and emotion you put in the story is what gets you excited.

2.3 Prioritizing Your Outcomes

The story was a brainstorming tool.
Chances are that you have plenty of things you want to achieve for this year. Unfortunately, your time, energy, and attention are limited.
I only set three outcomes for the entire year. 3 is easy enough to remember and keeps you focused.
Your average person is too ambitious and sets a ton of outcomes. Here’s what happens after a year.

• Earn six figures in profit from affiliate marketing  – NOT ACHIEVED
• Spend at least a month in three different continents – NOT ACHIEVED
• Reach 185lbs and 10{57b8cc37fd24bce1cf64c8b05d9407ce9171516056c1f5e762677747187a0de4} body fat – NOT ACHIEVED
• Read 20 books – ACHIEVED
• Journal every day – NOT ACHIEVED
• Get scuba diving license – ACHIEVED

Note: Notice how specific and measurable each outcome is. It holds you accountable.
Your resources are too spread out. Our brain tends to focus on doing what’s easiest. You’ve achieved two of your outcomes but they are the least impactful ones.
You read 20 books this year and got a scuba diving license. How much of a difference does that make to your life? Not much.
Instead, constrain yourself to the most impactful outcomes.

• Earn six figures in profit from affiliate marketing – ACHIEVED
• Spend at least a month in three different continents – NOT ACHIEVED
• Reach 185lbs and 10{57b8cc37fd24bce1cf64c8b05d9407ce9171516056c1f5e762677747187a0de4} body fat – ACHIEVED

Now imagine how much different your life would be when you achieve these.
You know who else sets their outcomes in 3’s? Lululemon. Here is Lululemon’s strategic growth plan.
The Company’s three priorities to drive revenue growth over the next five years are: