Congratulations:
you are successful in business, you have a loving wife and
two hard working sons.
You established
your company twenty years ago and during that time you have
nursed it through periods of ill health, and shared its
successes in times of prosperity. You can remember every
high and low. The business is now flourishing, employing
forty people, including your two sons, and reporting an
annual turnover in excess of £5m.
You are in absolute
control, still making all the decisions. The business needs
you and can't function without you. Over the years you have
amassed a wealth of information and knowledge, most of which
is stored in your head.
Ah, life is good!
You decide that
it is time to retire. The business will pay you a healthy
pension and you wish to pass the business to your sons within
the next few years.
Your sons have
been involved in the business for the last ten years and
have shown that they can cope with all the pressures heaped
upon them.
You call a board
meeting and tell everyone the good news. Or is it?
Your two sons
stand up and protest. They are fed up having to work day
and night, and do not want the extra pressure which would
be placed upon them in the event of your departure.
You have also
upset another of the key directors. He likes you and has
worked with you for years. He knows he can talk to you quite
freely, but he feels your sons don't listen to him to the
same extent and considers that his position would be demeaned
if you weren't at the helm.
You are now in
a quandary.
If you leave as
planned, will the business which you have built up over
the last twenty years simply crumble?
Perhaps a sale
on the open market is the answer.
Turnover and profit
are good, however you quickly realise that if the key personnel
left no-one else would be able to take on their roles because
these people worked on gut feel and instinct. The company's
systems are in their heads and there are no written manuals
on which new personnel can rely. The business would disintegrate
rapidly and your competitors would simply pick up the pieces.
Suddenly you no
longer have a business: good news has turned into bad news!
So what has gone
wrong? Do you only have yourself to blame? Probably. You
have not ensured that everyone within the business was aware
of your and everyone else's personal and business objectives.
No clarity exists at any level.
Every member of
your team should be travelling in the same direction and
as far as possible each individual's personal objectives
should be married to the overall business objectives. Discrepancies
between the personal and business objectives should be identified
and steps taken to bridge any gaps as appropriate.
If these simple
steps had been followed there would be no surprises: and
the board meeting would have been clear, concise and consistent.
So now you need
a plan. Identify the business's and each key person's objectives.
Then you determine the key systems within the organisation
and ensure written procedures are put in place to cover
each area.
Simple really,
and by following these simple steps you will ensure that
both you and the business will continue to flourish long
after you retire.
To be successful
a business requires a strategic plan and the whole of the
management team must be committed to achieving the clear
goals and defined objectives set out in the plan.
Think of the strategic
plan as a road map and in order to reach the destination
safely you must follow the detailed directions otherwise
you will get lost.
It is just as
important to plan the route the business must take over
the medium to long term and ensure that everyone is aware
of this route so that no-one within the organisation gets
lost.
There are many
reasons why managers fail to plan:
Lack of time;
What is the
point of engaging the services of a consultant who will
simply tell you what you already know?
Why bother
with a business plan which no-one will read?
The speed of
change within the business environment is so fast that
it is impossible to predict the future.
Let us look at
each of these statements in turn:
Lack of Time
If you do not
take the time to stand back and review the business as
a whole it may well be run on the basis of crisis management.
As a result, mistakes will be made and wrong decisions
will be taken. How much time will have to be spent to
rectify the mistakes and what will be the cost to the
business of these wrong decisions in terms of time, lost
orders/customers, cash etc.? Do you know, can you quantify
the cost, or do you just become even more frustrated?
It is imperative
that you take the time to step back from the business,
re-focus on the game plan and act clearly and decisively.
Engaging Consultants
Business planning
is an evolving process which involves a fundamental change
in the way people think. An individual can be guided through
this process but at the end of the day you are the one
who is going to make it happen.....or not as the case
may be.
You need someone
who can help you develop your game plan, offer guidance
and encouragement. The consultant will also act as a sounding
board and help you work on your business thereby ensuring
its continued success. Remember, the business is yours
and your commitment will make it work: the effective consultant
will merely act as a conduit for your success.
Business Plan
As stated earlier
the business plan can be viewed as a road map which, if
followed, will lead you to your destination. Therefore
this is a working document which can be used to help you
with your day to day decision making. It is not something
to be kept in a filing cabinet and, if it is, it is probably
wrong because it has not captured your interest, imagination
and desire to succeed.
Impossible
to Predict the Future
We live in a
time of rapid technological change which makes it crucial
to look further down the road and think what effect changes
will have on your products and services. You have to look
ahead and ask yourself how your business will fit in with
tomorrow's world.
Is your business
fit to face the future and maintain competitive advantage?
Are you in control?
To help answer
these questions, why not take a few moments to complete
the following questionnaire? If the answer to any of these
questions is "no", your business may not be sufficiently
strong and flexible to deal with today's business challenges.
Do you set targets as a reference point for managing
your business?
Are these targets realistic and are they communicated
to the relevant people within your organisation?
Do you have an action plan that sets out clearly what
you need to do to achieve your targets?
Are management accounts produced on a regular basis?
Are the management accounts scrutinised by an appropriate
person?
Do the management accounts highlight areas for investigation
and is appropriate action taken?
Are key ratios included in the management accounts?
Are these key ratios benchmarked with those of competitors/industry
norms?
Are there procedures in place to ensure that all personnel
achieve their full potential?
Is there a sound management structure?
Does management function as a team?
Is there a structure in place to train, motivate and
control staff?
If someone
other than the most senior person in the business were
to complete this questionnaire:
would they be able to answer the questions above?
would they give the same answers?
Do you have a clearly defined retirement or exit strategy
to meet your financial and personal goals?
If the answer to "14" is yes, is this strategy regularly
reviewed for its tax efficiency which can often make
a difference as to when and if those goals are achieved?
Interested?
Call Us Now
For further information
or to arrange a free consultation contact Bill Griffin on
telephone number
01224 625554.
We can also be
contacted by e-mail at griffinb@mestonreid.com
or by fax on 01224 626089, or visit our website at
www.mestonreid.com
to complete our interactive questionnaire.
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