Why every family business needs a business plan
There are three key reasons why a good business plan is one of the most valuable tools your family business can have:
1. At a strategic level, it clarifies business goals and ensures that family members, shareholders, management and employees understand their individual roles and responsibilities.
2. From a business development perspective, it makes it easier to attract investment and raise finance. Funding applications are more likely to succeed when they are supported by a well thought out business plan and credible financial projections.
3. Competing for talent is more successful when you have a well-defined strategy. It’s also easier to retain talent as a good business plan helps make career paths clearer.
When developing your family business plan, the first objective is to achieve a shared understanding of the goals of the business. This is not always straightforward as family members, employees and shareholders may have conflicting expectations. Tension in these relationships can lead to communication difficulties and conflict. For this reason, it is a good idea to involve an independent facilitator in your discussions. A specialist accountant with family business experience will bring an objective perspective as well as providing strategic business advice.
Where are we now and where do we want to be?
To define a vision and set top-level goals for your family business, you will need to conduct an objective analysis of family expectations, examine where the business currently stands, and decide where you want to get to. Questions to ask in this regard include:
What products and services do we currently provide?
Who are our customers?
Who are our competitors?
What is our current financial position?
What are the key trends in our main markets?
What opportunities do we see?
What risks do we face?
What do our family members and other stakeholders want from the business?
How do we want to develop and grow the business?
How will this impact our future revenue?
How will we fund our development/growth?
What skills will we need?
What additional resources will we require?
What management capabilities/gaps do we have?
Who will be responsible for taking our business forward?
How will we get there?
Once you have a clear view of family expectations and have defined your vision and goals, the next step in the business planning process is to decide what actions you will take to help you achieve your vision. Examples of these actions might include:
Increasing high-value sales
Adopting new technology
Merging or acquiring other businesses
Introducing new partners
Changing business structure
Monitoring and measuring progress
Having identified your list of actions and checked that they are aligned to your vision and goals, the next step is to assign responsibility and set timelines for achieving individual objectives. The more your team understands how their individual roles contribute to achieving the overall business goals, the easier it becomes to manage people and monitor and measure progress.
As well as benefitting internal operations, a robust business plan is a competitive advantage when recruiting talent and is a valuable tool when seeking investment. However, it is vital that the plan is realistic and supported by credible financial projections. HLB Ireland provides comprehensive advice and support to help family businesses refine strategy and achieve goals. For information on these services, check out our family business services page on this website or contact a member of our team.