Why MSPs Need to Adopt a Quarterly Business Planning Cycle

High-performing companies view the annual business planning cycle as something of a relic. It’s a slow, cumbersome process that fails to address the ever-changing business dynamics that MSPs face each day. If you haven’t done so yet, it’s probably time to adopt a quarterly cycle.

Shorter planning cycles can help MSPs of any size achieve the agility (here are a few tips on how to improve business agility) needed to quickly respond and adapt to the evolving market conditions that impact them and their clients. Quarterly cycles create a more responsive company that can readily adjust long-term forecasts based on the most current information and data culled from the day-to-day experiences of employees working in the trenches.

The transition shouldn’t be difficult, as long as you avoid boiling the ocean during the planning and review meetings. Prioritization is key. Focus on the quarter’s most important issues and include the main stakeholders closest to those issues.

The process of a successful quarterly planning cycle is actually rooted in the ageless principles John D. Rockefeller used to build  Standard Oil into one of the world’s most dominant empires (Verne Harnish’s “Mastering the Rockefeller Habits” is worth a read).  Some key practices to implement before starting the quarterly planning cycle include:

  • Align each team with all quarterly goals.
  • Continuously compile employee input to leverage opportunities and overcome obstacles.
  • Establish a communications system (experts call it a rhythm) to regularly distribute all pertinent information throughout the company.
  • Continuously collect, analyze and share pertinent data.

Once those processes are in place, you’ll be ready to establish a quarterly planning cycle. Once in place, here’s what it does for you:

  1. Creates a more accurate and timely assessment of the current business climate and how your business model fits into it.
  2. Identifies obstacles and provides solutions on how to overcome them. Quarterly issues to tackle could include profitability, operational efficiencies, customer acquisition/retention, new opportunities, and existing/future competitive threats.
  3. Clarifies marketing and technology trends.
  4. Ensures analysis and distribution of essential data/metrics and establishes new areas that should be tracked.
  5. Highlights goals achieved during the previous quarter, as well as the reasons any were missed.
  6. Sets priorities for the upcoming quarter.
  7. Establishes more accurate and timely budget forecasts. This will help your company respond to current conditions by freeing up funds (which may not be available toward year’s end under annual cycles) for unanticipated needs. David Parmenter, CEO of Waymark Solutions, offers strong insights into quarterly budget reviews in this article.

All of this probably sounds similar to the quarterly business reviews you conduct with customers (here’s a quick QBR tutorial if you’d like to start the practice with clients). By identifying, integrating and optimizing the solutions and processes that improve operational efficiencies, maximize revenue streams and capture new opportunities, you’ve become one of their most valuable partners. A quarterly business cycle allows you to bring that value to your own company.

To learn more on managed services best practices download our free guide, MSP Matters: A Roadmap to Enduring Business Success. 

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