It's finally spring and what seemed like a very long, hard winter has drawn to a close. And we have reached the first anniversary of PPACA and survived that as well. Both the weather and government intervention in our business can be difficult to deal with, but all us entrepreneurial types always figure out a way to successfully deal with adversity, right? When we get lemons, we make lemonade. It all just takes planning, perseverance and execution of a game plan. In these dynamic times of industry upheaval, business planning is an even more important and essential activity. For the last several months we have been discussing how creating a written business plan can be your GPS for managing your business in a changing environment.
This month, we want to talk about the potential uses for a written business plan. Clearly it can be used as a roadmap with your own management team to run your business. After all, it is intended to help you manage your practice and keep it on track. In addition, it can be referenced when important strategic decisions need to be made, such as coping with the impact of PPACA on revenues or potentially converting part of your business model to fee-based compensation. New initiatives need to be consistent with your stated goals and business strategies. Or if your firm is going to branch out in a new direction, at least it should be a conscious strategic decision, and it should be evaluated against the backdrop of your existing written plan. And you will want to periodically update the document as your business evolves so that it remains current and reflective of how you are conducting business at a point in time.
What to do with it
So what other uses are there for your business plan? Consideration should be given to sharing it with your trusted advisers, including your attorney, accountant and tax adviser. Obviously you will want to have any third parties execute a confidentiality and non-disclosure agreement before you provide them your plan; however, astute business people will expect that request. It will be helpful to them to better understand your business and its plans for the future. As a result, they will be in a better position to provide you solid counsel, and in all likelihood it will enable them to be more cost-effective in providing their services as well.
In addition, if your firm is seeking financing, having a written business plan will be essential. Your banker will be most interested to see that you have logically developed your business strategy, goals and financial projections. Considering raising some equity capital? You'll definitely need a business plan to even have a chance. In fact, in most types of financial transactions it will be required. Perhaps you are considering a merger with another local firm, or possibly even the sale of your business. A business plan will be critical to explain to a third party how you currently conduct business and what your vision is for the future. And comparing your plan with theirs will enable you to see where any potential synergies may exist.
Any other uses that you can think of? Excerpts from your plan can be shared with your entire staff. Shouldn't they have an understanding of what your vision for your business is? Most employees work better when they understand where they are going and how they are going to get there. And what about potential new hires? Certainly you will not share your financial results or any proprietary information. However, your business overview, the markets you serve, the products and services that you offer, etc., will be important information for potential recruits to understand. That will enable them to make a more informed career decision, and it will help to eliminate any confusion or misunderstanding right up front. Or the information could be shared during new employee orientation. Likewise, excerpts could be provided to carriers and important vendor relationships. That will enable all parties to understand their respective roles in your future success.
So what issues should be addressed in your business plan? While there are no right or wrong answers to that question, here are some suggestions that should provoke your thinking and ultimately result in you deciding the financial resources and human capital that will be required to achieve your objectives. Consider these topics to be articulated in your table of contents and detailed in your business plan:
* Executive summary
* Client value proposition
* Target markets
* Products and services to be offered
* Capabilities required
* Marketing strategy and positioning
* Growth strategies
* Competitive advantages
* Sales and distribution
* Client and customer interaction
* Enabling technologies
* Operational support
* Organization structure
* Human capital recruitment and development
* Summary of key business relationships (carriers, vendors, service providers, etc.)
* Corporate structure
* Capital structure
* Succession planning
* Financial goals and projections
Spread the news
Clearly the document you will be creating can be used with your own management team to run your business. It can be referenced when important strategic decisions need to be made. You will want to periodically update it so that it remains current and reflective of how you are conducting business at a point in time. Consider sharing it with your trusted business advisers, including your attorney, accountant and tax adviser. Raising money? Seeking financing? Considering a merger? You'll need a business plan for certain. Share it with your staff and new hires. Help everyone that impacts your business to better understand your business and what their role is. Help them, so that they can more effectively help you.
So as it turns out, there are many uses and audiences for a written business plan. Kind of makes you wonder how you have been functioning without one, right? Just think about how much better your business could be if you developed a written plan.
Kwicien is managing partner at Daymark Advisors. He can be reached at email@example.com.
Despite a nascent economic recovery, the momentum to reduce employee benefits isn't waning, according to a new poll by the Society for Human Resource Management. In the last six months, 20% of employers reported reducing employee benefits, the highest level since the fall of 2008 - the year SHRM started tracking the recession impact on employers.
Employers continue to scale back on health care coverage for employees (91%) and spouses and dependents (89%), paid relocation programs (55%) and the amount of leave an employee can accrue (54%). If the economic upswing doesn't pick up some speed, participants reported their organizations will consider the following actions:
* Allowing attrition (26% "very likely," 39% "somewhat likely");
* Freezing employee wage increases (25% "very likely," 24% "somewhat likely");
* Making budget cuts across the entire organization (21% "very likely," 36% "somewhat likely");
* Cutting employee bonuses (21% "very likely," 26% "somewhat likely"); and
* Implementing hiring freezes (16% "very likely," 30% "somewhat likely").
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