IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Doug Marshall of Marshall+Viliesis (www.MarshallViliesis.com)
Your Business Plan is Incomplete
A Business Plan is a Good Thing to Have…
Yet Most are Missing Two Critical Planning Components
A written business plan does not guarantee the survival, growth and the success of a business however most entrepreneurs agree it is an essential document. It’s the roadmap to increased productivity, sales and financial stability. Wander around the internet for a few minutes and you’ll find data about the benefits of having a business plan and how successful companies are more likely to have one. It is the North Star for a business. Does your business have a written plan? If it does what is included in it and does it follow the standard structure?
Business Plan Components – Standard Structure
- Executive summary
- Company description
- Market analysis
- Products and services
- Marketing plan
- Logistics and operations plan
- Financial plan
These elements are the foundation for the strategy and tactics needed to vault a company to success.
But Something is Missing!
Nearly 100% of Business Plans cover the components listed above yet they ignore two significant problems business owners face as the business grows. When you successfully execute your strategy your business income and wealth increases. When this happens a greater percentage of everything you own is represented by the business. It also means a growing number of people and entities rely on your business yet…
- There is nothing in your business plan to protect it from unexpected events such as the sudden departure of an owner(s) or key employees.
- There is no plan for how an owner might exit the business or transfer ownership at some future time.
Let’s take a look at both of these omissions
Protecting your business wealth, income and legacy from unexpected events!
What plans do you have in place to mitigate the negative consequences if something unexpected happens to you, a business partner or a key employee; ? You and your family depend on the business and so do many other stakeholders. It is never easy to contemplate bad stuff happening. Our human nature wants us to focus on the positive but this can work against us. From time to time we must allow the lizard survival part of the brain to do its work and figure out a plan for when things do not go as hoped. Having a good (emergency) plan keeps the doors of the business open and the income flowing. This is a benefit to all stakeholders. Your employees will still have jobs, customers will still be served and your suppliers will experience business as usual; this is in addition to the financial security you gain for yourself and your family.
What your exit plan/strategy? Someday you will leave your business and the majority of businesses wait too long to think about an exit strategy. Planning ahead puts owners in better control of their exit whether planned or unplanned. “Begin with the end in mind” is the second of the seven habits of highly effective people – Stephen R. Covey. This is true for businesses as well. You may not have all the answers yet you should be familiar with the traditional options. It is worth having a discussion about the end game at least once a year with your key employees and advisors. Look at what others owners have done and consider the impact on your family and all key stakeholders.
Somewhere in your business plan you should include a strategy section on protecting business wealth and income as well as a section of potential exit planning strategies. Making it a part of the business plan establishes it as a priority and it is more likely to get done.
If you have questions relating to the content of this article, Doug Marshall would welcome the opportunity to answer them. Mr. Marshall can be reached at (206) 605-4695 or DougM@MarshallViliesis.com.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.