Why Should You Develop a Business Plan for Going Concern, How to Do It, and How Do You Convert the Plan Into Action?

Why Should You Develop a Business Plan?

For every startup the development of a business plan is a  required first step. It is so obvious – business schools have course on writing the business plan and it is impossible to get funding without one. Teams coalesce around the labor. So, every startup has a business plan.

For the going concern, the ones that are now three or so more years old, the business plan (also called strategic plan -really the same thing) is forgotten, only stumbled on when a move forces someone to pick it up and wonder, “Should I just relegate this to the dumpster?”

This is not a good situation. A business without a plan is like a boat sitting in a pond just waiting to sink to the bottom for nature to compost it. Or, if it has the fate to be afloat in a stream, it will be carried along willy-nilly until it bumps into a stone or dead branch or reaches the ocean where nature will also send it to the big composter.

Every business exists in a world that is changing and filled with opportunities and threats. Your business plan is your set of oars to provide the means to pull in the direction you want to go in, to avoid the rocks. You might even row to shore and portage around the falls, to move to an entirely new river.

But, many people, even accepting the wisdom of having a plan, find it a painful exercise, all too easily avoided. This may be driven by the idea that a business plan involves dozens of pages of writing, lots of spreadsheets with numbers they really don’t believe (sometimes don’t understand). Business plans, strategic plans, these are just the exercises one does in business schools. Or it may be the folk wisdom that business plans are not a useful part of managing and they always end up on the shelf or hidden in a file cabinet only dusted off for display when in search of a bank loan.

However, shift your thinking to view the process of building a plan as a value in and of itself, and adopt a simpler more flexible business plan model you will find that building that set of oars for your little boat is fun and productive. Continue reading

Managing Key Personnel – Do What Is Inevitable – evasion and self-deception will not work

Recently I was speaking with the owner of a financial services firm. She has 15 people in her organization which is now almost 18 years old. By any measure a successful firm.

She told me about one person who has been with the firm for eight years. The owner described this person as the most professional and reliable person in the organization. She performs all sorts of important customer-facing activities flawlessly. This employee is a key person in the organization. The owner went on to tell me about a recent conversation she had with this key person who confided that she did not want to be just an “insurance geek”. She was emphatic about this. The owner told me that this statement jived with other comments this person had made recently. She believed her and felt that her days are numbered.

The owner then went on to describe how she had begun to put together a job manual for all of the key tasks now under the wing of the key employee. This seemed to me to be just the right step. First, the key employee was cooperating in constructing the job manual. This is a great sign of continuing good faith. Second, the owner is testing out the manual to be sure that it really will be a solid platform for training a replacement. Continue reading

What If Agreements – get them in place now, before a what if occurs

Just this morning I heard another tale of woe from a business owner who is now entering into legal disputes because a partner is getting divorced. The business is ten years old, healthy, in fact, holds a strong position in a niche market. But, now the business will be sold or broken into pieces. Several lawyers are also enjoying a feast of fees. 

All of this points back to a fundamental of business formation and business planning – the need for “what if” agreements among the owners.

What if someone dies, becomes disabled, divorced, married, wants to leave the business? How are new partners added? Can a founder be fired? Who owns what and in what form? How will disputes be settled? And, the list of “what ifs” goes on.

So often people start businesses and, in the glow of start up enthusiasms they think, or don’t want to think, about the almost inevitable “what ifs”. They quickly go through setting up the incorporation process and get to work ignoring what will turn out to be all important, the Founders’ Agreement. 

If you are just starting out, make sure that you work through the discussions and legal work for a Founders’ Agreement within the first couple of months. Put your Founders’ Agreement in place. On the other hand, perhaps you have ten years of success in your wake and you still have no Founders’ Agreement (referred to also as Owners’ Operating Agreement and other title). You are living on borrowed time. Get together with your business partners and make it a priority to think through the obvious “what ifs” and then involve your attorneys to formulate an agreement. When one of the “what ifs” occur ,you will be very happy to fall back on its structure.

Podcast – Seven Reasons to Add a CFO – part-time or full – to Your Team

7 Reasons why you need to add a part-time CFO to your business team


This podcast is 7 minutes 20 seconds long

Seven Reasons to Add a CFO – part-time or full – to Your Team

Many small businesses operate with only a bookkeeper and CPA to manage the finances. The owner or GM fills in, or at least think that they fill in,  for all of the duties of a Chief Financial Officer (CFO). As a result owners of these businesses frequently have inadequate financial information to effectively move ahead. And, they are frequently using scarce resources (their time) performing tasks far better done by a professional, experienced hand.

In this time of readily available outsourced or part-time professionals there are very few worthwhile reasons not to have your own CFO. Depending on your size, your CFO might appear once a month or several days a week.

So, let me list a few reasons for you to find a part-time CFO. Continue reading