This week, Dan and I sat down and talked about what went well in 2018, and what was challenging.
We call this our “Year-End Planning” meeting, and do it every December to align on our priorities and goals for the year ahead. We talk about Lionheart Software (our consulting & app business), new ventures / partnerships, and our family.
Well, except for last December. And that was a BIG mistake (or the best thing ever, given what we learned from it).
Usually, our year-end planning gives us a set of guidelines we can use to make decisions in the new year.
There are two components to this: 1) Priorities, and 2) Goals (TLDR: scroll down to the bottom for how-to’s).
This is particularly important for us since we’re partners in business and life. As entrepreneurs, it can be hard to set boundaries – and since we don’t see divorce in our future, we need to be on the same page to make trade-offs between relationships, health and work.
But last December, our whole family got the flu. And by the time we recovered, we were back in the swing of work and just couldn’t seem to fit in our planning session.
Lack of planning yields mixed results, and a lot of wasted energy.
In a nutshell, 2018 was rather stressful, despite ending on a high note. And the happy ending was primarily because we finally did our planning session in Q3. But we learned a lot, and will definitely be handling 2019 differently as a result.
So, without further ado…
Q1: Built new tools, interviewed with Y Combinator, but missed the mark with income.
While we had talked about our financial goals for the year at a high-level, Dan and I never aligned on how we’d balance internal projects with billable work for clients. So without much forethought, we spent the bulk of Q1 building a tool called Nucleus to automate dev-ops and infrastructure.
Initially, the tool was designed for 100% internal use, but we decided to apply to Y Combinator on a whim and actually got an interview.
It ended up not being the right fit for us, which we should have known from the get-go (and would have, had we planned appropriately – our goal has never been to grow a $1B company). And while we grew a lot as business-people just by going through the process, by the time we figured that out, it was April.
The positive? We now have a rockin’ tool that saves us 10-15 hours of work on every project.
The negative? We spent A LOT of time on a venture that we decided not to pursue – and got behind in our client work as a result.
Q2: Severe burnout + heavy client workload = mental health challenges.
Not surprisingly, Q2 was a tough one.
We had already worked our butts off to get Nucleus to a point of usability, and now we had to put pedal to the medal to ship a few products for clients (because paying bills? Unfortunately not optional :().
It didn’t take Dan long to get majorly burnt out, and he had a pretty severe brush with depression / adrenal burnout. It’s something most entrepreneurs (and a lot of developers) are familiar with, and while it’s being talked about a lot these days, it really snuck up on us.
Normally, when we plan out our year, we try to build in some balance – and that’s something we really didn’t address well in early 2018.
Q3: More balance, but still some clean-up.
Thankfully, by Q3 we were doing much better, but we still had to wrap up some client projects from earlier in the year.
The upside of our mental health scare? We were forced to re-evaluate the way we want to generate income.
We’ve done really well consulting over the past 10 years, and there are a lot of things we love about it: direct ROI for the time we put in, the freedom to work on a lot of interesting projects, and the ability to really specialize in our niche.
The downside? Consulting doesn’t generate passive income (which is exactly what you need when you need to take time for your health).
So when we finally did our 2018 planning meeting (yes, in Q3), we decided that we’d start shifting our focus to some of our other ventures.
Q4: Kicked off 2 new partnerships, secured new business for 2019.
I think the most surprising part of this year was how quickly we righted the ship once we took just 2 hours to re-focus.
We decided that our priorities for the remainder of 2018 would be: Health, Starting new ventures / partnerships, and shipping 1 new SaaS or app.
And within a month, we had laid the groundwork for 2 new partnerships, plus a large client project for 2019.
Granted, the relationship-building and lead-gen we did in Q3 made this possible, but our year-end goals gave us the direction to pick the right partners.
Net-net for 2018: Late planning is better than no planning.
All in all, we’re excited about how we’re heading in 2019. We’ll talk more about our new ventures next year (one is a revenue-share partnership, and the other is a joint venture into the SaaS space).
Because this time, we have a new set of clear priorities and goals.
Now, if you want to try some year-end planning for yourself, it’s pretty simple…
How to do Year-End Planning
1) Understand your priorities before you establish any goals.
Over the years, we’ve seen that unless we lay out our priorities at a high level, it’s really hard to come up with actionable goals. By laying out your priorities first, you can create smart goals without over-burdening yourself (because the reality is, you just can’t do everything).
So what counts as a priority?
We think of priorities as spheres of influence, or broad parts of our lives that don’t necessarily overlap.
And the magic number is….3.
In our experience as parents, we’ve seen that at any given time, we can have about 3 of the following: A relationship with your spouse, Sleep, Time with your kids, A successful career, and Health / Fitness. Try to prioritize any more than that, and they’ll all suffer a bit.
To pick our top 3 priorities, we have to ask ourselves: What’s important to us this year?
Is it bringing our fitness to a new level? Is it building passive income? Is it taking a more active role in our son’s extra curricular activities?
Now, prioritizing doesn’t mean that you get to ignore the rest of your life. It might just mean that you establish fewer goals, or less ambitious goals within that sphere.
2) Set realistic (but ambitious) goals.
Once we know our priorities, we like to come up with 3-5 goals for each sphere of our life.
Goals should be ambitious, but attainable. You don’t want to set a goal for yourself that you have no hope of hitting. It’s better to exceed your goals and celebrate at the end of the year!
They should also be measurable (so think about incorporating something tangible, like numbers).
It might look something like this:
- Grow passive income from internal apps to $5k / month.
- Start one new venture / partnership that will be revenue-positive by EOY.
- Automate our accounting processes (aim to save 10 hours of time).
- Transition from consulting to recurring revenue from products within 2 years (need to be 25% of the way there by EOY).
- Have one date night / month.
- Go to one mommy / daddy & me activity / week.
- Take one family trip this year.
- Spend more time outside – aim for 1 family hike / 2 weeks.
- Dan: Train for Austin half-marathon in February.
- Rachel: Meditate daily.
- Dan: Improve guitar skills to play favorite Metallica songs.
- Rachel: Learn how to ferment so we don’t have to buy sauerkraut anymore.
Note that the business goals are pretty ambitious, followed by health – family and self-improvement are a little more low-key. We’re not ignoring our family or selves by any means, but this isn’t the year for Dan to do 8 triathlons (that was 2016), or for me to take time off to have another baby.
3) Figure out blockers & life hacks to make it all happen.
Now, it’s great to set all these ambitious goals for yourself – but what if you don’t have the means to make them happen yet?
Dan and I almost always have to put new support systems into place in order to hit our goals at the start of the year.
For example, if we want to have a date night once a month, I’d better make sure we have enough babysitters on rotation.
If we want to start a new partnership, we need to set some goals around number of new contacts we need to make in order to meet that person or company.
If it’s looking like our workload is going to be too much for the two of us, we’ll talk about whether we need to outsource or automate something.
And the priorities might cross-over as well. If we know we’re going to have a lot of billable work in Q1, I might arrange for a babysitter on the weekends to give us some more working time.
Remember, you don’t have to do it all alone – and often the cost of asking for / hiring help ends up being less than what it would cost you personally (not to mention opportunity cost).
Net-net: When you figure out your priorities and goals up front, it’s much easier to structure your life and business in a way that’ll help you achieve them.
What kinds of year-end planning have you done? What works / doesn’t work? We’d love to hear about how you hit your goals! You can email me at email@example.com.