It is not usual for a family owned business to avoid strategic planning. Often, the owners believe they know their business, products and markets intimately enough that devoting the time to developing a strategic plan seems superfluous.
This can be especially true if the business has been in operation for a number of years and has some mileage under its belt and solid or consistent performance. Ownership may have weathered challenges and obstacles thrown its way and feel confident that it can withstand changes that occur.
There are circumstances that can make strategic planning imperative, and often this is associated with new family members or the next generation of potential owners entering the business.
In addition to factors such as stock or ownership percentages, that are essential ingredients when bringing on the next generation – and the strategic planning discipline will serve a number of purposes.
First, it can define to new members the underlying assumptions that have brought the business to the point it is today.
What drives the business and the culture necessary to sustain the business are addressed, and this provides grounding to those entering the business.
Second, the strategic planning process can define roles for new family members and a pathway for the experiences that they might need.
It could be that over the course of five years, some people will be immersed in a series of jobs to round out their knowledge and understanding of the business.
The strategic plan will identify those roles and functions and the duration of time the individuals may be working in them.
Next, involving new family members in developing the strategic plan surfaces new ideas and new assumptions for the future of the business.
The next generation of owners almost always will have ideas and thoughts of where the business could be going, and it is useful to get them exposed and brought to light to determine feasibility, potential and timing.
The next generation’s ideas may include exiting the business in the future through sale or by acquisition for any number of reasons. If so, the strategic plan will set the timetable and circumstances for when a sale would be advantageous to the family.
While strategic planning often is an important tool for running any business, it can be the singular most important action a family owned business can deploy when bringing new family on board.
Marianne Chester is founder and CEO of mEnterprise Solutions LLC, a strategic services consultancy based in Stroudsburg. She can be reached at 570-460-9599 or firstname.lastname@example.org.