The creation of your first annual report is a pivotal moment in the life of your business. Whether you’re a new startup, or perhaps newly listed on the Stock Exchange, you now have a huge opportunity to tell the story of your organisation to significant people like future investors and employees.
Done right, the annual report performs as much more than just a set of numbers you are legally required to publish. Think of it more like a window on the soul of your business. This may be the only piece of communication a potential investor sees if there isn’t any broker research on your company, so make it compelling.
We’ve worked with many companies over the past 30 years on their first annual reports, so we’ve picked up a lot of understanding on how best to go about the process, and avoid the potential pitfalls.
The most important consideration is that all the content (words, images and tone) should create a coherent picture of your business. Make it easy for readers by clearly articulating who you are, what you do and why, plus your strategy.
The process you choose to produce the report will have a large bearing on this. Many companies make the mistake of allowing too many people to contribute content to the report, then wonder why the finished result seems fragmented.
Different departments will inevitably have different ideas about what should be included, so one of the challenges is how to iron out these disagreements. We recommend that for your first report you have a small team of people creating content in order to keep as on-plan as possible.
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As well as deciding who will write each section, also think about who needs to sign off content, the structure, creative and by when. Also understand who needs to give their opinion and agree what involvement your auditors will have.
As a rough guide, allow three months for the whole process. Decide early on the structure of the report. Bear in mind that this will be followed in future years’ reports so make the main sections general enough to incorporate new developments.
The first year’s report should aim to articulate the investment case, which will then inform the narrative for future reports. It also needs to explain your business model as this tells potential investors how the business creates value, the trends and factors affecting your business, your strategy and risk management.
In future years’ reports you can build on this foundation by enhancing all areas of your report in line with best practice. Refine your business model to ensure that it supports your strategy. Articulating the model remains a challenge for many companies but we can help you to define this area.
Creating a brief for your internal content providers is another important step. They’ll need to know details of the full structure of the report, as well as what is required in their own sections, plus relevant word counts and a style guide to ensure consistent spelling and tone. The tone of the report will help to demonstrate your culture.
This is also where you need to think about sourcing appropriate images. As well as non-gimmicky, they’ll need to be at the right resolution for print. You also need to research usage rights. The design of the report should help the reader access information easily. This should be created before the copy is delivered; once the words and pictures come together you may need to adjust the layout, so allow some time to review the first proof.
After this proof the design should be stable and you’re then providing text changes to the designer as per an agreed schedule. Ensure the core team and those responsible for signing it off are aware in advance of the deadline for final sign-off, and they have set aside time to approve their section or the full report. Once this approval is given the files are sent to a printer.
Finally, consider how information developed for the report can be adapted for wider uses. You’ve invested some important time in setting down the pillars of your business – make sure that it is widely disseminated throughout your business so everybody is aware of this newly-created corporate identity. Ensure a pdf of the report is uploaded to your website and consider which stakeholders outside the business you might want to send the report to.
It might sound like a complex project, but the process of report-creation is likely to pay dividends to your business for many years by helping to refine your business model and strategy. A wise investment, if done properly.
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Guy Jefferson is director of client services at creative consultancy Radley Yeldar.
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