Business owners and particularly owners of construction firms often find planning a waste of time either because “things keep changing” or because “we go through this whole process and then do not look at the thing until next year”. The very simple system explained below is designed to address both of those issues. Of course, you must develop the practice and habit of monthly review to fully implement this program.
Time to Sell Your Construction Business? Please click here to download the e-book, “A Contractor’s Guide to Succession Planning”.
- You build projects from plans and specifications. You build your business the same way.
- Planning is an opportunity to receive input from your team. In the process they assume responsibility. Many heads really are better than one. This is also a very good start to delegation – a key to growing a business and creating value
- Planning, as I mean it for most contractors is not 100 pages of fluff.
- It is one page setting your vision, mission, and your major goals
- It is a few pages of financial budgets or projections (including a work-in-process or WIP schedule for many firms) shown in terms of both dollars and some sort of meaningful units (usually jobs, but could be other units), perhaps monthly for the next year and then 2 to 4 more years annually.
- It is a 90 day checklist of improvements (what is to be done, who is to do it, when is it due by) to meet the major goal and financial projections.
- Depending on the trade or the size of your company you might add: capital investment section, technology section, etc. But the essence is major goals, financial and unit projections and a checklist of improvements.
- The plan should be reviewed EVERY MONTH along with high level management KPI’s (Key Performance Indicators). Every month, the 90 day goals section should be updated with new goals as the old ones are accomplished.
- A critical part of any plan is the succession portion. If succession is always discussed as part of the process of running a business, then it will not be unusual or shocking to people. Further, as secession event can be promoted as the opportunity it is for management growth. Clearly this section might only be discussed with the higher level management team and outside advisors, but it should be part of the process.
- Proper planning and management of budgets and KPI’s is essential to the growth of any firm. It is the equivalent of an architectural plan for our firm. If you are not regularly engaged in this process – ADD IT.
From the Whitepaper, “Whats Your Number, A Contractors Guide to Contingency and Succession Planning”. (While geared to Contractors the paper is great advice for all business owners and their advisors).
Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at firstname.lastname@example.org or 443.334.8000 to discuss selling your business, ordering a business valuation or buying a business.