Conclusion to the Strategic Planning Series
Over the course of the last two years, I have written articles as part of my Strategic Planning Series. I hope you have enjoyed the information I shared in those. But, if you are like me and like a neat little bow tied around a set, I will not disappoint! This article will conclude my series by capturing information shared in the series as a whole.
- Plan ahead if your exit strategy involves selling your business. Having clean, profitable, and strong financial statements for the last five years could raise fewer questions and lend to a smooth transition.
- Explore the factors that help you focus on doing more of the good things that allow your business value to grow in the right direction! A few of these factors are competitive advantage, reputation, non-compete agreements, and risk management.
- Manage risks that negatively impact business value. Focus on strengthening cash flows, devise a healthy capital structure, diversify, and be consistent with staff and/or location.
- Understand the marketplace within your industry. Keep tabs on competition, identify community/client needs, and adjust pricing structure frequently.
- Measure financial metrics as compared to peers. Analyze gross profit margins, operating expenses, working capital, and capital structure in relation to others in your peer group.
- Leverage goodwill/intangible assets such as reputation, assembled workforce, non-compete agreements, signed contracts, location, and processes. The more difficult it is for a competitor to recreate what you have, the more value your company has.
- Enhance the future value of your company, stay up to date with equipment to increase efficiencies, hire talent, secure long-term contracts, manage debt, and provide quality products and service.
Overall, it is difficult to get our heads out of the day-to-day tasks long enough to focus on big picture factors. However, without spending time to answer the really tough questions, your business could suffer.
Still can’t get enough of strategic planning? Call to schedule an appointment to learn how to incorporate these learnings into your own business as you continue your journey to the top!