Book contents · Part 2, chapter 1 of 6
The Year Map is a one-page yearly plan that starts from last year’s actual results and chains this year’s targets for revenue, gross margin, overheads, profit and cash. Every assumption is labelled, every target is tied to a weekly number, and it is updated at every Quarter Day. It sits at the top of the Numbers-First Management framework: everything else exists to deliver it.
- The question
- Where are we going this year, in numbers?
- How often
- Built once a year, updated at every Quarter Day
- Who owns it
- The owner, built with the accountant
- Time it takes
- About half a day to build, an hour each quarter to update
A Year Map for a Maltese installer
The fictional installer from the coaching page, with 12 staff. Every line is marked as an actual, an assumption or a calculated result, and the plan ends in cash, not profit.
| Line | Workings | Result | Type |
|---|---|---|---|
| Last year: revenue | from the accounts | €1,200,000 | Actual |
| Last year: gross profit | €1,200,000 × 28% | €336,000 | Calculated |
| Last year: overheads | from the accounts | €300,000 | Actual |
| Last year: profit | €336,000 − €300,000 | €36,000 | Calculated |
| This year: revenue | €1,200,000 × 1.10 (10% growth) | €1,320,000 | Assumption |
| This year: gross profit | €1,320,000 × 31% (margin target) | €409,200 | Assumption |
| This year: overheads | €300,000 × 1.05 (5% rise) | €315,000 | Assumption |
| This year: profit | €409,200 − €315,000 | €94,200 | Calculated |
| Tax and loan repayments | €45,000 | Assumption | |
| Cash the year should generate | €94,200 − €45,000 | €49,200 | Calculated |
Profit moves from €36,000 to €94,200, and the 3-point margin target is the biggest single reason. That target now needs a weekly number: gross margin on jobs closed each week, owned by the operations lead.
How do you build a Year Map?
- Start from last year’s actual resultsRevenue, gross margin, overheads, profit and the movement in cash. If the annual accounts are not ready, use the latest management accounts.
- Label every assumptionGrowth, margin, overhead increases: each is a bet. Writing them down makes them visible, and makes them easy to correct at the Quarter Day.
- Chain the targetsRevenue drives gross profit, gross profit less overheads gives profit. Each line is calculated from the one above, so changing one assumption updates the whole plan.
- End in cashAfter tax, loan repayments and owner drawings, what should the bank balance be at the end of each quarter? A plan that ends at profit leaves out the number that keeps the business alive.
- Tie every target to a weekly numberA margin target becomes a weekly margin dial. A revenue target becomes quotes sent and conversion. A target with no weekly number is a wish.
- Split the year into quartersWhat must be true at the end of each quarter for the year to work? Those answers become the first Quarter Commitments.
The rule, and the mistakes to avoid
- Starting from a wish instead of last year’s actual results.
- Planning revenue only, and leaving out margin, overheads and cash.
- Building it in January and never opening it again.
- Hiding assumptions inside a single target, so nobody can see what went wrong.
How the Year Map connects to the rest of the framework
Fed by
- Money EngineWhere does profit come from, and where does it leak?
- Quarter DayWhat did we learn, and what comes next?
Feeds into
- Quarter CommitmentsWhat must be true by the end of this quarter?
- Weekly DialsAre we on track right now?
Which pains the Year Map fixes
The Part 1 chapters where the Year Map does much of the work:
- 4Not knowing where you stand until year end
- 5Rising costs, flat prices
- 6Cash flow that keeps surprising you
- 8The bank says no
- 10No structure to run the business
- 11Hitting a ceiling
Questions owners ask about the Year Map
What is a Year Map?
The Year Map is a one-page yearly plan that starts from last year’s actual results and chains this year’s targets for revenue, gross margin, overheads, profit and cash. Every assumption is labelled, every target is tied to a weekly number, and it is updated at every Quarter Day. It sits at the top of the Numbers-First Management framework: everything else exists to deliver it.
How is a Year Map different from a budget?
A budget usually lists every expected income and cost line. The Year Map is shorter and works the other way round: it starts from last year’s actual results, sets a handful of chained targets that end in cash, and ties each one to a number the team tracks every week.
How long does it take to build a Year Map?
About half a day once last year’s accounts or management accounts are ready, and around an hour to update at each Quarter Day.
A year is too long to manage directly. The Year Map is broken into 13-week pieces with a named owner each: the Quarter Commitments.
Chapter 2: Quarter Commitments →Want this built for your business?
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