The DEFCON Financial Planner
Prepare for the worst.
Plan for the best.
Live another day.
FORMAT
Google Doc
TIME TO IMPLEMENT
3 - 4 Hours
BEST FOR
Business owners who have a firm grip on their current financials, but want more in-depth strategic planning.
“Planning is bringing the future into the present so that you can do something about it now.”
At The Lions Pride we strongly believe that proper planning is the best way to get through a crisis without losing critical team members, prime vendors, or our shirts in the process.
That’s why we created the DEFCON Financial Planner. It covers the seven conditions of business financial health—from Critical to Moonshot. You’ll be able to feel prepared for anything based on key measurements, strategic responses, and specific details.
Plan ahead now, so that you can properly respond (not react) later.
What it Does
TLP’s DEFCON Financial Planner (available for free here) is a financial decision-making tool that helps you plot out how your business will operate in the best of times and the worse of times, starting with your baseline Steady State. It serves as a strategic reference document for your entire team and accounts for everything from your worst-case scenario to how (and what) to invest, spend, and save when the money is good.
How to put the DEFCON Financial Planner to work
The DEFCON Financial Planner is a decision-making framework based on seven levels of financial health.
Level 7: Moonshot. This is when you are doing great. It is a perfect opportunity to build an emergency cash reserve.
Level 6: Reach. This is when you find yourself doing better than expected and you can think about spending on something “nice to have.”
Level 5: Steady. This is your baseline level, everything is working accordingly within your existing budget.
Level 4: Adjust. This is when there are some financial trends of concern that need adjustment or they will lead to a level where changes are needed.
Level 3: React. This is when you have more than one thing going on and you need to react both in revenue and expenses
Level 2: Serious. This is when you are planning ahead for how much you will need to cut back across the board in order to get back to an operational level
Level 1: Critical. This is when you are no longer able to maintain your current team count or pay your vendors in any fashion
The best place to start is by addressing Level 5: your “Steady” state. Assuming that everything is going according to plan, this is where you will input information based on your normal budget and will serve as your baseline moving forward.
While completing this column is a critical first step—know that it is not enough. All too often, when things are going well, we don’t take the time to plan for when things aren’t. It might feel daunting at first, but by working through every column now, you will avoid feeling caught off guard later—wishing you had planned ahead when you had the opportunity and a clearer state of mind.
Once you have your Steady Column complete you can work your way down through to level one. Once that’s done, you can then think of sunnier times, creating different budgets and decisions for when you are doing good and even better, for when you are doing great.
Remember:
At every level, you will be guided through a series of questions that track your measurements, responses, and specifics around each decision. The goal here is to think through the why behind each judgment call so that you can act confidently and accordingly should the time come.
Your answers should be based on trends you are seeing over a three-month period. This will help you make sure you are not jumping the gun or missing key patterns.
If you are ever feeling stuck, the template includes a sample completed plan. Read the example and then ask yourself “what does this mean for my business?” Once you have completed a column you can hide or delete the sample column so that you have a clear, concise document.
Why Cohort Members love it
It creates a baseline. It allows business owners to see their financial performance as it impacts their day-to-day cash flow and viability—and then take spending and saving actions accordingly.
It is reassuring. It works as an internal communication tool that can be used to easily explain a company's financial health.
It empowers everyone to go all in. Incorporating responses, solutions, and input from the team helps get everyone on the same page. If the business ever gets to another DEFCON level, the team will be ready to take swift action because they had a hand in the planning and buy-in from the beginning.
