Its finally spring and the long, hard winter has come to a close. We have also all become more accustomed to the realities of the post-Affordable Care Act benefits landscape. Both the weather and government intervention in our business can be difficult to deal with, but all us entrepreneurial-types seem to always figure out a way to successfully deal with adversity. It all takes planning, perseverance and execution of a game plan.
Last month, we discussed how a written business plan can be your GPS for management in a changing environment. I know from experience that the vast majority of you do not have a formal business plan. This month, lets talk about the potential uses for a written business plan. It is intended to help you manage your practice and keep it on track. In addition, it can be referenced when important strategic and financial decisions need to be made, such as coping with the impact of ACA on revenues or converting part of your business model to fee-based compensation.
New initiatives need to be consistent with your goals and business strategies. If your firm is going to branch out in a new direction, it should be a conscious strategic decision, evaluated against the back-drop of your existing written plan. You will want to periodically update the document as your business evolves so that it remains current and reflective of your ongoing status.
The other uses for a business plan go on. You should consider sharing it with your trusted advisers, which include your attorney, accountant and tax adviser. 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 future plans. They will be in a better position to provide you solid counsel and may enable them to be more cost-effective in their services as well.
If your firm is looking for financing, a written business plan will be essential. Your banker will be interested that business strategy is logically developed with goals and financial projections. Youll also want a plan if youre considering raising capital. 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.
Excerpts from your plan can also be shared with your entire staff. Most employees work better when they understand where they are going and how they are going to get there. It can also be helpful for 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. This will enable them to make a more informed career decision, and they can get started working right away. Getting the potential recruits reaction to your plan could also help you to evaluate whether that new hire will fit with your vision.
Portions of the plan can also be provided to your insurance carriers, service providers and other important vendors. This will enable all parties to understand their respective roles in your future success and better help you accomplish your goals.
There are many uses and audiences for a written business plan. Think about how much bigger, better and more profitable your business could be in the future if you developed a written plan now.
