Last week, I talked about why January isn’t really about goals; it’s about filters.  This week is about how to build those filters properly, without overcomplicating things.

Why Most Plans Break Down Later in the Year

I regularly see that annual plans fail for a simple reason:  They’re built on what people hope will happen, rather than what cannot change.

Hope is really useful for motivation. I have a friend who regularly tells me “without hope there is nothing” and I love that saying.  However, it’s a very poor foundation on which to start planning.

By February or March, reality reasserts itself:

• cash timing remains tight
• capacity has stretched beyond expectations
• your energy will be dipping
• risks you already knew about are surfacing again

Of course, none of this is a surprise, it just wasn’t factored in early enough, or at all, in the plan built on hope.

How CFOs Think About a Year Ahead

I highlighted last week that the CFO lens doesn’t begin with ambition, but instead with constraints, as constraints are what defines reality.

What that means is a transition from “What do we want to achieve?” to asking: “Given the limits we’re operating within, what’s realistic?”

That shift matters.  Constraints aren’t a problem to solve later; they’re the starting conditions for every good decision.

The Four Constraints That Shape Every Year

I believe that almost every founder-led business will be operating inside these same four limits:

1. Cash

Not revenue or profit; the actual cash timing.  I.e. How much pressure can the business absorb before decisions become reactive?

2. Capacity

Not employee headcount but actual delivery capacity.  I.e. How much quality work can be delivered without burning people out or damaging standards?

3. Risk Tolerance* 

This is essentially what you are prepared to live with when things start to wobble.

Debt levels.

Client concentration.

Personal exposure.

* Ignoring your risk tolerance doesn’t make you braver; When decisions are made that sit outside what you can emotionally or financially tolerate, stress builds quietly. You start to second-guess. You avoid looking at numbers. You make reactive choices under pressure. None of that is courage. Real bravery in business looks like making decisions you can stand behind when things wobble, not just when they go well. Naming your true risk tolerance early doesn’t limit growth; it prevents growth from being funded by anxiety.

4. Energy

This is an often overlooked and, even abused, constraint.  Do you ever ask yourself how many hard decisions, intense weeks, or growth pushes can you realistically sustain?

Why Constraints Create Better Plans

When you assess and understand your constraints and build into planning at an early stage:

• priorities stop competing
• trade-offs become visible
• “good enough” replaces “perfect”
• decisions get lighter, not heavier

Instead of asking “Can we do this?”, the question becomes: “What has to stop if we do?”  And that’s how plans stay intact past January.

Michael Jordan’s first retirement

Michael Jordan’s first retirement is often misread as walking away too early.

At the time, he was still the best player in the world. But Jordan understood and admitted to himself that the physical toll, emotional pressure, and personal circumstances he was operating under had shifted his tolerance for risk. “I just didn’t have the desire to play the game anymore.”  Michael Jordan, 1993

Continuing wouldn’t have demonstrated toughness, it would have increased the likelihood of decline, injury, or burnout under conditions he could no longer control, and was simply not willing to allow to happen. By stepping away, he protected what he’d built and reset on his own terms. Ignoring those constraints wouldn’t have made him braver; it would have made the eventual reckoning harsher.  “Mentally I was exhausted. I didn’t have anything else to give.” 

Then, when he decided things had changed again, and his desire and energy to play basketball had returned, he did so with a renewed level of focus and ultimately led the Chicago Bulls to three more NBA championships. Respecting his constraints didn’t end his dominance, it actually extended it and built a stronger legacy.

Practical Exercise (15 Minutes, No Spreadsheets)

Take 15 minutes and write down your non-negotiables for the year under each constraint.

1. Cash: minimum cash buffer you refuse to go below
2. Capacity: what “too stretched” actually looks like
3. Risk: exposures you won’t increase
4. Energy: how you will visibly have red lines that you are not sacrificing personal time and health again

This is not actual planning yet, it’s like sketching the edges of a frame before drawing afterwards.  

Once you are clear on these constraints you will start to see interesting developments:

1. You give yourself permission to say no earlier and more often
2. You will choose less without guilt
3. You will stop carrying decisions you’ve already outgrown

Next week, we’ll look at how to use this clarity to intentionally remove things from the year without shrinking the business or playing small.

For now, resist the urge to optimise.  First, make the year survivable.  Then make it good.

“Some people want it to happen, some wish it would happen, others make it happen.”  Michael Jordan