Business Plans – Do You Have All Three?
Business owners must have three separate business plans;
· A Business Plan
· A Marketing Plan
· An Exit Plan
Do you have all three?
The first plan to prepare should be the Exit Plan. Remember to start with the end in mind, and work back from there.
A Business Plan allows the owners and shareholders of the business to plan for the daily operation of the business, and to set targets, budgets and operating systems in place. It is like the “Instruction Manual” for the running of the business, and every business should have one.
Good business managers refer constantly to the Business Plan and use it as a constant reference point when making business decisions.
The Business Plan should be reviewed (at least) annually, and updated and adjusted regularly.
A good business plan includes:
– A mission statement
– Plans for growth and expansion
– Budgets (including P & L and Balance Sheet)
– Asset replacement plans
– Operational plans and systems
– Key Performance Indicators to be measured
– An Action Plan which summarises the actions to be implemented with dates and responsibilities
A MARKETING PLAN
A Marketing Plan refers to the business plan, and the mission statement to outline the targets and outcomes to be achieved through marketing and advertising, and the plan for achieving those aims. It includes a budget, and a mechanism for measuring spending and results achieved. The Marketing Plan also includes KPIs that are to be measured and monitored.
All that is required to produce an Exit Plan, is to:
1. Decide when you want to exit, and how much you will want to sell for
2. Plan on how much profit the business will need to show to sell for the price that you want to achieve
3. Set a program with targets and KPI (Key Performance Indicators) that need to be achieved to realise the price sought.
4. Decide who is the most suitable acquirer of your business
5. Plan to prepare the business for sale
6. Seek advice from credible advisors to keep you accountable and “on-track”.
7. Measure your performance and adjust where necessary to hit targets
8. Make it happen by engaging an effective business broker who will –
a) Help set an appropriate pricing plan
b) Help set the sale plan (including how the sale is to be executed)
c) Prepare the data and information that buyers will need
d) Understand the most suitable marketing techniques and produce a bespoke marketing plan
e) Pro-actively follow up on buyers and engage them
f) Remove emotion from discussions and help to negotiate the best outcome
g) Follow the process through due diligence and co-ordinate activity to finalise the transaction