May 1, 2026
An effective restoration company annual planning process includes a frank assessment of the prior year’s performance against goals, financial target-setting for the coming year (by service line and margin), strategic priorities and the decisions that enable them, a people plan, and a 90-day priority queue for Q1 — all developed with the management team, not by the owner alone.
Most restoration owners do something resembling annual planning — a conversation with their accountant about last year’s taxes and a vague mental commitment to grow revenue by some percentage this year. That’s not a plan. That’s an aspiration. A genuine annual planning process produces something specific: a written document that drives daily decisions for the next twelve months.
Before planning the future, tell the truth about the past. Pull out whatever goals you set last year and measure actual performance against them — financial performance (revenue, gross margin, overhead, net margin), operational performance (systems implemented, quality targets), and people performance (hires made, turnover and why). The honest question for each gap: Was this a goal that wasn’t truly prioritized, outside your control, or simply not achievable as stated?
Set specific, achievable financial targets built from the bottom up — not from “let’s grow 20%” applied to last year’s number. Build the model by service line: what is your current run rate, what specific actions will change it, what is a realistic target given those actions? If the model produces a net margin you can’t sustain, revise costs or revenue projections rather than accepting a plan that doesn’t work.
Identify 3–5 strategic decisions or initiatives for the coming year — not operational tasks, but choices that will meaningfully change the business trajectory. Each should have an owner, a timeline, and a definition of “done.”
What positions need to be filled? What development commitments are being made to specific individuals? What is the plan for your highest flight-risk employees? What compensation adjustments are required to retain critical people?
Identify the 3–5 most important specific actions for the first 90 days. Assign an owner to each. Set a deadline. Review at the end of Q1. The output of the full process should be a written document — ideally 5–8 pages — shared with your management team and referenced throughout the year.
A full annual planning process takes 4–6 hours for a small restoration company (under $3M) and a full day for a mid-size company ($3M–$10M) with a management team. The investment in planning time is returned many times over in decision quality and execution alignment throughout the year.
Management team members (operations manager, senior PM, office manager) should participate in the planning process, at least for sections relevant to their domains. This creates buy-in and surfaces operational knowledge the owner alone may miss.
At minimum: revenue by service line, gross margin percentage (by service line and blended), overhead as a percentage of revenue, and net margin percentage.
Mike McCabe is The Profit Detective — a 36-year restoration industry veteran and Fractional Operations Manager at Floodlight Consulting Group. Annual planning facilitation is a component of his fractional operations practice.
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