“When you don’t know where you’re going, any path will take you there”.
Lewis Carroll (ish)
Family Plans, and Family Business Plans, are short, medium and long range plans for: (a) the family (10 to 100 years) and (b) the family business (1 to 10 years). They should be developed independently – to emphasise and reflect the clear separation of family from business affairs.
A full suite of plans comprises:
- Strategy Plan – big picture overview of where the business is going, and when, including key metrics.
- Strategic Marketing Plan – covering products, services and markets (customers).
- Business Plan – detailed financial projections, including monthly budgets and cashflow expectations.
- Capital Expenditure Plan – major asset purchases.
- Human Resources Plan – performance management and personal / professional training and development.
- Succession Plan – generational transitions – timing, responsibilities and processes.
Many families have conventional business plans, but they don’t have strategic family business plans. They treat annual planning as a simple accounting exercise – numbers rolling on from year to year – rather than as an opportunity to take a long, hard, critical and creative look at how well their business operations are helping them to achieve their personal and family goals.
Many families are very secretive about their family business plans. They exclude their own key staff from the family business planning process, which is both a reprehensible waste of talent and a huge sign of disrespect to valued and competent staff, whose own fortunes depend on the future success of the family and its business.
When families do finally choose to invite key staff members in to help them develop their Family Business Plan, they often discover a previously untapped reservoir of talent, ideas and energy that’s keen to drive serious business improvement and increase family satisfaction and commitment to the business. Staff are also frequently impatient to make necessary changes happen. Many businesses would happily kill to get similar levels of staff commitment!
Family Business Plans address the commercial objectives of the business. They need to be congruent and compatible with the family’s goals, in additional to satisfying the normal requirements of good business sense. Clearly, the family needs to be able to communicate its own goals to the leaders of the business, to enable this to happen in the process.
For help developing a Family Business Plan, please call, or contact: The Solutionist Group.