Beef Up Those Business Plans
Nov 21, 2005
Now that A/E/P and environmental consulting firms have been doing business plans regularly for the past 10 or 15 years, it may be time to beef them up a bit. The old platitudes, goals, and action steps may not be enough to really guide the firm in such changing times as we live in today.
Beyond the mission (why are you in business), vision (what are you trying to become), strategies (how will you go about things philosophically), goals (what are your targets), and implementation items (what exactly will you do), there’s a lot of other stuff that needs to be in the plan. Some of these items include:
Brainstorming results. When is the last time you sat down in a room with 10 to 15 of the brightest minds you can assemble (not all necessarily under your employ!) and had a real honest-to-goodness brainstorming session about your firm, your markets, your services, and more? These sessions can lead to some new ideas that you may not have come up with otherwise. The key is to be non-judgmental about the quality or feasibility of the ideas and to instead gather ALL the ideas you can. Be sure to keep good notes so nothing is lost.
Market analyses. When is the last time you took a hard look at each of the markets your firm serves? What’s growing? What’s declining? Who are the top buyers in each of those markets? What services are they buying these days? What services are they no longer buying? What are their prospects for the future? What funding sources do they depend on? These and many, many more questions for each of your markets should be answered. It’s a lot of work. The marketing people and the key service providers in each market sector need active involvement in pulling this information together. The results should be shared with all who are involved in business planning for the firm as well as everyone in the firm who works serving clients in that particular market.
Competitive analyses. Who are the top competitors of the firm? What are they doing well or not so well? Which ones are growing and making money, and which ones aren’t? How do you account for the differences in the success of these various firms? What are the lessons for your firm that you can glean from this information? To do this well requires total honesty with yourselves that many firms struggle with. If you don’t like what you are learning, be sure not to shoot the messengers. Try to be open to what you are learning.
A five-year financial look-ahead. Many would scoff at this, but there is some real value to getting some linked spreadsheets together that will help you model different future scenarios. Cash flow statements, income statements, and balance sheets all need to tie together so changes in one will reflect in the others. Different profitability- and growth-rate scenarios should be tested.
Ownership transition requirements, too, must be included in this look ahead if you are going to be able to fully understand the impacts of different profitability and growth rates on stock price and the availability of cash to retire departing shareholders.
I don’t want to make this sound easy— it’s a daunting task, even for those who know how to use all the tools. But it needs to be done. A good financial manager can prove invaluable here.
There’s a lot more I could write here, but I am out of space. My point is this— don’t get lazy with your business planning. Breathe some new life (and substance) into the process by beefing up your efforts here. It will be time and money well-spent.
Originally published 11/21/2005
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.