If strategic planning is one of the critical factors in business success – why doesn’t everyone do it? In the sale process you must present cohesive numbers in your Information Memorandum, including objective forecasts.
Successful entrepreneurs consistently state that planning, setting goals and sharing them is a critical element of team building and getting their fledgling businesses scaled up and more profitable.
The problem is STRATEGIC PLANNING appears to be difficult, time consuming and overwhelming for many business owners.
Some of the reasons for lack of planning include:
- Feeling overwhelmed
- Lack of skill
- Don’t know where to start
- Thinking it won’t make a difference
- Not enough time
- It’s too expensive
- I’m not looking for investment
In reality, making a plan, writing it down and measuring your progress against it is one of the biggest factors in the success of both commercial enterprises and life! It doesn’t have to be complex. In fact, the simpler the better. It should be shareable, understandable, and engaging for all the appropriate people involved in the business.
97% of business owners have no exit plan.
When you are considering selling your business, it’s a good time to start delegating some of the decision making and your daily tasks. This frees you up to make progress in the exit planning. You’ll be less stressed and distracted when you have a plan with priorities and clear actions. You‘ll feel like you are in control rather than running around in circles and getting nowhere.
The plan itself should be easy to understand with some over-arching goals at its core. Making a plan does not have to be complex. The simpler it is, the easier it is to follow and explain to others. It helps if you have a clear idea of what it is you want to achieve and, more importantly, WHY you want to achieve it.
Selling a business is not for the faint hearted!
Reminding yourself of the reasons you are doing it becomes key to keeping positive when the going gets tough. Prioritising those activities is a fundamental part of your success so make sure you get the best value for your business.
You need to take care of yourself and remember that if it were easy everyone would be doing it! Equally it is not the place for martyrs and if you don’t have a passion and commitment to the sale then it might be time to reassess whether you should continue.
The difference planning makes
Failing to plan is planning to fail. A carefully, well thought out plan makes a significant difference to what you achieve in a specific period of time. Exit planning helps you and your team make the right short-term decisions to achieve long term goals. If goals are clearly articulated and joined up with a vision and shared values, then the company has a framework for making effective and speedy decisions.
Even if you aren’t thinking of an exit in the immediate future, it is good to remember that nearly 60% of all business owners leave their business in unplanned circumstances. Being prepared means that no matter what happens, your biggest asset is protected.
Strategy is simply a plan of action designed to achieve a long-term or major aim. Exit planning is always strategic.
As the old saying goes “what gets measured gets managed” – or in some quotes replace “gets managed” with “gets done”. A key part of the exit planning process is making progress with the appropriate actions.
Goals make it easier for activities to be prioritised. Work is focused on those activities that are important to the achievement of the long-term ambitions of the organisation. When big goals are broken down into smaller, more manageable ones they are less daunting. When goals are shared with the entire team or external partners the resulting actions reduce waste and errors.
With a plan in place, it is easier to make short term changes in direction whilst still maintaining the focus on the long-term mission. The world is changing at an increasing rate – technology developments, changes in social attitudes and legislation all impact your business and demand rapid changes in the way you operate or the way your customers perceive you.
Being flexible allows changes to be acted on more quickly in light of a lot of change. It also means if you are approached by a buyer, you can make decisions that are good for you and your business not just react to someone else’s agenda.
When long-term and short-term goals are written down and shared as part of the planning activity, you are setting a framework for your team to make effective decisions without constantly referring back to you alone.
More effective, better quality decisions are made in a timely manner. It is easier to respond to any diversion from plans or prepare for contingencies if there is a plan in place. This reduces reliance on you as the owner – and increases the value of your business at the same time.
Sharing a common goal with your team increases their engagement and commitment to completing tasks that benefit the company. Having employees work toward a common goal promotes an interdependency among co-workers. If each team member pulls together, they become more productive than the sum of their parts.
A cohesive workforce increases employee satisfaction and motivation. Incentivised and collaborating employees come into work willing and prepared to deliver value. A lack of cohesion leads to a stressed and tense cohort – leading to employees who do not work well together, reducing productivity and quality.
Many business owners try and keep the exit plans a secret from their staff, but this is often ill advised. If you are in your 60’s, or older, the staff may already be wondering when you are going to retire and what’s going to happen to them when you do. Getting them involved engages them more and builds trust and a feeling of security.
Using a plan to measure results gives management information more context. Getting the correct measures and controls in place aides accurate and timely decision making and business growth. A history of management accounts and clearly presented management information shows buyers that the business is being run professionally and has a rational decision-making process.
Planning is often more difficult if you are starting with a blank piece of paper! Equally using someone else’s complicated framework or template leads you to a plan you don’t understand or that doesn’t have the information you need.
Plans are only used if they are understood, and they are more easily understood if they are simple.
Regular updates and measurement of activity against targets keeps you on track. Having a time scale for the milestones makes being accountable easier. In short you can see what success looks like and the actions required to achieve each part of the plan – whilst addressing the key area of your business such as Sales, Marketing, Operations, Finance and Talent.
“If you can’t explain it to a 6-year-old, you don’t understand it yourself.”
Are you stuck in the day-to-day of your business with no time to plan for the future? A Professional Business Mentor is just the leverage you need to get out of the rut and flying. Discover how you can make your business worth more AND avoid leaving money on the table when you finally leave your business. Click here to contact Christine by email alternatively you can book a call with the Business Mentor of the Year 2020, author and speaker. Who helps business founders get their businesses exit ready so they can enjoy a happier, richer future. She saves them THOUSANDS and increases the value of their businesses by MILLIONS.