Well, football season is over, and we are now headlong into March Madness. It's likely to be almost as frenetic as the ongoing gyrations surrounding PPACA in the political forum, the courts, and in the marketplace.

Clearly the benefits landscape will remain in a constant state of flux for the next several years. It's likely to be as much of an emotional roller-coaster as the basketball tournament. I hope you're up for the "big dance" - those who are prepared will be victorious.

And that brings us to this month's topic. I want to talk about developing a business plan for your firm and how that will help increase your business asset value in the event of a merger or sale. Even if you are not an equity owner in the firm, you should want the organization to have a business plan.

You'd be surprised at how many benefits practices do not have a formal written business plan. (Or maybe you wouldn't.) Does your organization have one? Why not? Perhaps the process is a bit of a mystery to you and your colleagues. Never written a business plan? Don't worry. I'll try to de-mystify business planning for you.


Why write it down?

What is the rationale for having a business plan in the first place? Why should you have one at all - most businesses don't, right? What components or elements should be in a business plan? What are the possible uses for a business plan? And finally, who are the potential audiences and stakeholders with an interest in a business plan?

Consider a business plan a road map - a guide for running your business. It should articulate your business purpose and your mission. Who are your customers? What is your value proposition? How will you grow your business? How much realistically can it grow? Will it still be profitable? And what resources will you need to make it all happen? These are some of the essential questions that need to be answered in a thoughtful, cogent manner.

Perhaps you are asking yourself, why does my business plan need to be written? After all, you have it all in your head and you've gotten this far, right? First of all, the discipline of putting the plan in writing forces you to think through all the issues involved in managing your business and to succinctly articulate why your business matters.

A business plan will also cause you to put a stake in the ground about those important and sometimes controversial issues like:

* foregoing profits to fund growth

* deciding what additional capabilities and resources are needed

* specializing in one or two industries to gain competitive advantage to the exclusion of general market prospects

* deciding to build/buy/ or partner to add a synergistic product line or service

* merging with or acquiring a "friendly" competitor to increase revenues and strengthen the management team

Furthermore, it's easy to forget strategies or, more importantly, goals. It's also easy to rationalize an unplanned change of direction. Putting your plan in writing makes it more definitive or permanent, and it will solidify your commitment to the plan. And it will make it easier to clearly and effectively communicate your plan to internal and external audiences without the risk of misinterpretation. If you are contemplating a merger or sale, it will succinctly articulate your overall business direction and its value proposition. Need another reason? Historically, businesses with written business plans have a higher success rate.


Step by step

Business planning is a strategic exercise that, by its very nature, will be an iterative process. That is, it will undoubtedly require multiple versions or iterations. The content will need to be refined several times until you are satisfied that you have accurately captured all the key elements.

Information gathering to establish the base line for your business is a logical place to start. Gather the key financial metrics for your business. But also pull together information about your marketing positioning, service standards and any guarantees, client perceptions, etc.

You may be asking yourself, who should you get involved in the process? Availability and the time commitment involved are factors. On the other hand, how many people are involved in the planning of the holiday party? Isn't the future of your business at least as important as that?

Engage key members of your staff to help you to gather the factual data about the current status of your business. A select group of team members that interact regularly with clients and employees (business development resources, producers, consultants, account managers) would be likely participants. After all, they are the face of your business to your clients and prospects. Also, presumably they possess the institutional knowledge regarding client expectations and perceptions. So their input about where your business is today, and perhaps more importantly, where it can be tomorrow, will be very helpful.

Schedule a strategy session (preferably off-site away from operational distractions) where collectively you will discuss the key issues involved in your business. At a minimum, you will want to assure yourself that the discussion and ultimately the plan document accurately articulate the answers to the following questions:

* Who does your business serve? Who are your target customers? Who should be interested in your services? Who is the management team? Who are your critical business relationships? (carriers, vendors, advisers, etc)

* What is your business? What services and products does it sell? What will your firm sell in the future? What is your value proposition? What is your competitive advantage? What have your financial results been for the last three years? What will they be for the next three years? What strategies will you employ to grow your business? What strategies will you employ to improve profitability? What role will technology play in your business?

* When should a prospective client seek your services and counsel? When do your clients need your firm most? When the marketplace changes, as it inevitably will, will your business be ready?

* How will your business grow? How much will it grow? How quickly? How will you recruit talent that you need? How does your team define business success? How will we know when success is achieved?

These questions are a great place to start, and should lead to some lively discussions. Designate a team member to keep notes to capture the commentary and suggestions. Some of the dialogue will be interesting to know, but may not materially alter how you conduct business in the future. However, invariably you will hear some real "nuggets of knowledge" that can provide breakthrough insights. If you are uncertain about your ability to objectively facilitate such a session(s), a qualified business adviser may be of assistance.

At the outset, collect a wide range of comments and input. But as the discussion evolves, the potential significance of certain elements should become more pronounced and your thinking should begin to gel. Drill down on the topics that have real impact on business development and customer interaction initiatives. Think broadly and strategically about how to accelerate the growth and profitability of your practice. And keep it real. That is, focus on what is realistically possible within the time horizon that you are considering. You should develop action plans and goals that are realistic but that cause your organization to stretch to achieve.


Your map to success

So carve out a few hours, and think about your business, not just about being in business. You plan an itinerary when you travel on business; productive business meetings follow an agenda planned in advance. You plan where to take an important client or prospect to dinner; doesn't something as important as your business practice deserve at least as much consideration? Solid business planning is a critical management skill. Develop a well-conceived business plan, and it will provide a road map to success that increases the profitability and asset value of your business.


Reach Kwicien, managing partner at Daymark Advisors at jkwicien@daymarkadvisors.com.

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