In this highly informative webinar, our experts explained how to develop an operational, business, and strategic plan for growing your family business.
They discussed:
- Steps that should be taken to guarantee “managed growth”
- How to assess your team
- How to plan for and assess growth
- What the growth opportunities are
- Determining your business vision
- Top 10 considerations for a family business
3. 1. Family dynamics
2. Family/employee skillset
3. Do you have a plan for
growth?
4. Right infrastructure for
growth
5. Capital requirements
To Grow or not to Grow
4. Is Everyone on the same page?
• Is this something the whole family
wants?
• What is the motivation behind growth?
• What are their risk tolerances?
• What metrics define success?
Family Dynamics
5. Do you have the right skillset for
growth?
• Team
• Clear roles & responsibilities
• Succession
• Are you okay if they fail?
• Do they need a mentor?
Family/Employee Skillset
6. • Vision – where do you want to be
in 5 or even 10 years
• Strategic Plan – 3 to 5 years goals
& objectives
• Business Plan – 2 years – current
situation, market, environment
• Operational Plan – rolling 12
months (internal use, management
goals & objectives, details)
Do you have a plan for Growth?
7. • In a perfect world a business should
have a “Vision” of where the owner
“want to go or who they want to be”
“We will have the largest market
share of long term battery
technologies for mobile devices”
Where are you going?
8. • Strategic Plan - how will this
“Vision” be achieved – at a
high level
• Management Team
• Market Potential
• Risks
• Financial Requirements
• Technology development
goals
• Business ownership
structure
Do you have a plan for Growth?
9. Business Plan
• Your business objectives have
been set in the Strategic
planning process
• The current health of your
business & changes to achieve
goals
• Business ownership structure
(if changing)
• Convincing lenders to believe in
you & your vision for your
business
Do you have a plan for Growth?
10. Operational Plan
• What do you need to meet your short
term operational business objectives
• Resources - people, financial,
support etc.
• Goals & objectives for key players
and staff
• External support – advisors, any
structural changes
• Marketing & Sales – with specific
objectives for sales team
• Operations (manufacturing &
delivery) – any changes and/or
new equipment etc.
Do you have a plan for Growth?
11. 1. Open another location
2. Franchise
3. Sell on the internet
4. Look at complimentary markets
5. Strategic alliances
6. Diversify
7. New markets
Growth Opportunities
14. Sources of capital
1. Bootstrapping
2. Line of Credit
3. Loans
4. Management of
working capital
5. Grants
6. Alternative
• Factoring
• PO Purchasing
Capital Requirements
15. 1. Run your family business like a business.
2. Create a succession plan.
3. Develop leadership among all employees.
4. Don’t play favorites
5. Separate business and family expenses.
6. Set boundaries.
7. Communicate openly.
8. Don’t guarantee employment.
9. Learn to resolve conflicts
10. Get outside input.
Top 10 Considerations
17. For More Information
Candace Enman, CPA, CA
President, WelchGroup Consulting
cenman@w-group.com
www.w-group.com
(613) 236-9191 x195
Twitter: @welchgroup
ca.linkedin.com/in/candaceenman/
Bruce Fischer
Chairman, WelchGroup Consulting
bfischer@w-group.com
613-228-9410
www.w-group.com
ca.linkedin.com/in/bfischer
Hinweis der Redaktion
Candace Enman is a President focused on improving the value in small and medium sized enterprises, by ensuring that their profits are both sustainable and transferable. With over 15 years of financial and management experience, Candace has played key roles in all aspects of growing a business. Candace runs a successful Chairman’s View and Contract CFO practice that helps business owners think and act strategically in their companies. Specifically they assist owners in managing their growth objectives as well as preparing their business for an upcoming transition.
Whether you run a family business or not, the decision to grow or to keep the status quo can be a hard one.For some owners, their strong sense of responsibility for the stewardship of the family legacy may deter them from taking a gamble.But if it’s a calculated gamble, one that is well thought out in advance and then monitored, it can strengthen not only the business but extend the legacy of the family business.Today we’re going to explore the following points in more detail and then discuss the steps that should be taken to guarantee “managed growth” if that’s the path you decide to pursue.
When looking at growth opportunities in a family business, it’s important to consider the family dynamics and ask yourself if “everyone is on the same page”.Is this something that the whole family wants or is it just the founder or another key owner or family member that wants to expand? Client Examples: Parent wants to take the business in a different direction than the kids; Not all the family want to expand because they don’t feel they can properly manage it.What is motivating the desire for growth?Is a family member looking to make their mark? Solidify their role and contribution to the company?Boredom – always want to be innovating, doing something newTrying to increase the value of your business – positioning it for sale, trying to make it worth more (common for owners who are focused on exiting in 2-5 years; grow the business and then exit)Exit strategies/succession – provide some options and why a “sell” is much better than a “pay me a salary for the rest of my life” optionAre you able to easily replicate what you did in another market?Perhaps you identified a business to acquire that is complimentary to yours and that will bring synergy to your business (Client looking at doing a join venture with another business to strategically position it for growth)You need to assess the risk tolerance of all the family members.Is the opportunity for growth, one that is easily executable or would it be foolish to push the envelope?What are the risks and rewards associated with growth & expansion? Have all elements been thought about? Financial, physical, emotional impacts?Most family businesses are aware of the stats that X% of companies fail from 2nd generation to 3rd generation….so do you want to take that risk by adding more complexity to the business?Finally you need to understand what metrics will define success around your growth strategy and for the family members.Is it revenue, profit?Is it the idea of building something that is bigger, better?Is it building autonomy or carving out specific niches for your children?The key takeaway is that there must be alignment of owners/family & management team in order for the business to thrive. Everyone must be on the same page and driving towards the same goal.If that’s not possible, then often an external party can help to facilitate those discuss through a “Family Council Meeting” which is technically a buffer free zone with the goal of coming to a consensus.
At any stage in business growth you need to assess the team that is around you. Do you have the right team on the right bus at the right time.This is especially important in a family run business as sometimes people are “born” into roles but they may lack the right skillset to position the company for growth and then execute on it.So ask yourselves if you have the right skillset to grow the business. Team Do you have a strong management team and do they work well together?Are they properly qualified in their roles and able to manage an increase in volume or complexityDo they have clear roles & responsibilitiesAre they written?Does everyone understand the role they currently play and how that will change as the business grows?If someone has been identified as a successor to the business owner and they are actively involved in the growth plan, do they have the passion and skillset to see your vision through?Is it okay if they fail?Does anyone need a mentor? Someone outside of the business that they can go to, to get advice/leadership?
Vision/Plan – explain what the difference is between an operational, business and strategic plan….
Vision/Plan – explain what the difference is between an operational, business and strategic plan….
Vision/Plan – explain what the difference is between an operational, business and strategic plan….
Vision/Plan – explain what the difference is between an operational, business and strategic plan….
Vision/Plan – explain what the difference is between an operational, business and strategic plan….
In our CV engagement we look at 18 key drivers to assess value in a private enterprise.Growth, “does your company have a history of sustained growth at or above the industry’s rate”How large is your potential market?do you have a dominant market share or plans to attain a dominant share.Is your revenue recurring or do you have to recreate your customers every month?Do you have documented capital, legal, or market barriers to entry?Is your product or service differentiated?How strong is your brand relative to your competition?Can you show a net and gross margin above your industry norm?Do you have a diversified customer base or are all your eggs in one basket?Can an outsider quickly and efficiently learn about your companyDo you have financial systems and processes in place such as financial statements, operating reports, audits and taxDo you have a sales and marketing process…not just an ace sales or marketing personCan your operations consistently deliver on your promises to the marketplace?Do you have a process for measuring customer satisfaction?Do you have high functioning senior management team in place or is the company overly dependent on the business owner?Can you find, hire, and retain the best of the best when you need to?Is your legal house in order?And last, do you have a process to capture innovation at all levels in your organization?
Run your family business like a business. If most or all of your key employees are family members, it’s easy to get sloppy about things like keeping your corporation in compliance, properly documenting decisions or maintaining accurate financial records. Always treat your business like a business.Create a succession plan. If you want your business to survive, you must develop a plan for what will happen when you retire, die or otherwise exit the company. But a recentPricewaterhouseCoopers survey found that nearly half of family businesses had no succession plan. Enlist your accountant, attorney, key employees and family members in developing a succession plan that details who will take on key roles.Develop leadership among all employees. Hold regular performance reviews for family and nonfamily employees alike. Provide training in-house, through local community college and adult education programs, or through industry associations to develop employees’ strengths and streamline the succession process.Don’t play favorites. If non-family employees believe they have no chance of moving up in the company, they’ll quickly become resentful and unmotivated. Set a clear path to promotion and advancement for both family and non-family employees.Separate business and family expenses. You might be tempted to make loans from the company to family members, or to let them write off personal expenses (such as the purchase of a car or vacation home) as business expenses. Even if such actions don’t get you in trouble with the IRS, they will foster resentment among non-family employees.Set boundaries. Decide when discussing the business is allowed and when it’s off-limits (such as during dinner, or at holiday gatherings). This helps ensure that family relationships don’t revolve solely around business and aren’t poisoned by business conflicts.Communicate openly. Non-family employees often feel they’re kept in the dark about the inner workings of family businesses. Whenever possible, share information openly with family and nonfamily employees alike.Don’t guarantee employment. Each family member should have an opportunity to work in the business, but not everyone will be suited to continue doing so. Base hiring decisions on the business’s – not the family member’s—needs. Talk to your attorney about structuring the business so that nonemployee family members can still have some ownership.Learn to resolve conflicts. Business conflicts can infect family relationships; family problems can flare up disguised as business issues. Develop a plan for dealing with business-related disagreements between family members, both those who work in the business and those who do not.Get outside input. Whether you’re dealing with personal conflicts or trying to make business decisions, seeking opinions from trusted outsiders such as your board of directors or an SBDC Business Advisorcan give you much-needed perspective.- See more at: http://smallbizla.org/2012/10-tips-for-growing-your-family-business/#sthash.DWH05EVb.dpuf