The Art of Planning: Succession Planning and Business Plans - September 28, 2007
“Failing to plan means planning to fail.”
Executives in small and mid-sized companies often get caught in the day-to-day quagmire – addressing crises, focusing on the next project or deadline. But they really need more time to focus on the big picture: strategic planning, looking at the company’s needs from a broader perspective…even planning a successful exit strategy.
On September 28, representatives of Indianapolis small and mid-sized firms attended a Main Street Institute seminar called “Business Planning, Exit Strategies & Value Maximization.” The Main Street Institute is a partnership between the IU Kelley School of Business and the Greater Indianapolis Chamber of Commerce focused on providing educational programming on topics of interest to the region’s smaller firms.
The “Business Planning” event featured a presentation by Kelley Professor of Accounting William Kulsrud, who serves as Chair of the School’s Masters of Sciences in Accounting program. Kulsrud focused on succession planning – a critical topic,considering that an estimated 90% of U.S. businesses are family-owned, but less than 20% have a written succession plan in place.
Kulsrud addressed the strategic issues involved in exiting a family business, by passing along to another family member, an outside party or employee consortium, or liquidating the firm while minimizing the tax impact.
Other presenters included Marcus Chandler of Barnes & Thornburg law firm, who addressed sources of growth capital for smaller firms, and private equity buyout strategies. David Millard of Barnes & Thornburg and Glenn Dunlap of Milestone Advisors also co-presented on business planning. Millard and Dunlap focused on the creation of functional business plans – noting that many entrepreneurs write plans to attract financing, not to serve as the real strategic roadmap to business success.
They note that a wealth of planning resources (templates, processes and advice) are available online, but the difference between a glorified business description and a real plan is the time and thinking invested by the entrepreneur who prioritizes planning.
The presentations were well-received by the audience, who responded to the mix of broad counsel on strategic planning and very specific information on the financial implications of growing (and exiting) a small business.
Small to mid-sized companies (100 or fewer employees) make up more than 95% of Indiana employers. A recent report released by the Indiana Chamber of Commerce says that mid-market firms ($5 million in annual sales or more) account for more than 30% of Hoosier jobs. We all have a stake in helping smaller firms thrive, and grow towards mid-market success – seminars like the Main Street Institute’s “Business Planning” workshop provides the tools necessary to forge this path.
