2023-2024 Tax Planning Guide
Winning Back-Office Strategies to Boost Your Business Agility
VIEWpoint Issue 1 | 2023
A Refresher on the Trust Fund Recovery Penalty for Business Owner...
Valuations Can Help Business Owners Plan for the Future
SBA Lenders: Beware of BSA
As most businesses grow, strategic planning evolves from a few ideas in the mind of the owner to a more formal process. Ideally, a formal strategic planning document is eventually developed that lays out key initiatives for the business over the next three to five years. But unfortunately, what starts out as a well-articulated set of strategic directions often ends up collecting dust — not meeting its potential to help drive the business’ success or never being articulated to the management team at all.
Here are three keys to creating an effective strategic plan that grows with your company:
1. Treat it as Process, Not a Document
The strategic planning process should involve:
- Collecting relevant facts
- Setting priorities
- Weighing competing alternatives
- Making choices about the direction of your business
While advisors such as Doeren Mayhew can facilitate the planning process and provide implementation support, top management must be ready to take the lead. Management should not be just reviewing and approving a nice binder of initiatives prepared by your advisors; they need to be highly engaged in a process of debate followed by decision making.
When the focus is on the process, not just the output, it’s easier to make it an ongoing effort. That’s because managers develop a deeper understanding of and buy into the analysis and options that were considered in developing the strategic plan. As active participants in its development, they also have a greater sense of ownership, and thus much more willingness to keep it up to date. In simple terms, they understand the “why” of the plan and are not just tasked with completing projects.
2. Define and Track
Don’t view strategic planning as simply setting long-range goals. A good plan also includes strategies (broad directions to achieve your goals) and specific projects and related tasks (shorter-term actions required to implement the strategies).
For example, to achieve a goal of doubling market share, you may devise a strategy to open or acquire three new locations over the next three years. Projects will consist of the actions to be undertaken each year to build or buy the new stores.
But your strategic plan won’t go anywhere unless it contains a set of metrics, such as “incremental market share improvement,” and milestones, such as “opening the third store on June 1,” to measure the plan’s implementation progress.
Accountability is also key. Assign responsible individuals to oversee each goal, strategy or project. And regularly assess their progress against the metrics and milestones. As the leader of the company, your role is to push this accountability – it doesn’t happen without leadership.
3. Update When Needed, Not When Scheduled
Some businesses make annual updates to their strategic plans, whether they’re needed or not. That’s certainly better than letting the plan sit on the shelf, but it’s not sufficient.
When investigating why so many businesses didn’t use their strategic planning process to drive major business decisions, researchers from Marakon Associates and the Economist Intelligence Unit found that the need to make these decisions didn’t always coincide with the annual planning calendar. Rather, an opportunity to buy out a competitor, the loss of key employees, a technological breakthrough, or major disruptions to suppliers or customers created a need to update the plan.
Effective strategic planning is difficult. It requires a discipline that many organizations fail to achieve, leaving them directionless and reactive rather than focused and able to create their own opportunities. Businesses that can master the art of strategic planning as an ongoing process are well positioned for meeting — or exceeding — their long-range goals.
Doeren Mayhew facilitates strategic planning for our clients and helps them implement and monitor the resulting initiatives. For more information, contact our strategic planning advisors in Michigan, Houston or Ft. Lauderdale.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
A quick registration is required to view our resources.
You will only be asked to do this one time (unless you don't save your browser cookies).