Many small businesses owners are aware that they should have, and regularly update, a strategic plan. They may not, however, realize that part of the process should involve having a succession or exit plan.

The Anatomy of a Strategic Plan

The best way to start working on a strategic plan is to skip to the ultimate goal: What do you want your business to accomplish? This is equivalent to your company’s mission statement. Once that is clear, flip the process around to the beginning and ask: What steps will help my company achieve its goal(s)?

A strategic plan does not need a large number of goals. There might be ten or more, but there could also only be four or five. These goals will outline the course that the business will take, and should be clear and concise. If they aren’t, the rest of the plan will be useless.

Once the goals are set and management is on board, the objectives for reaching each goal need to be set. Objectives are rather broad in nature and should be concise. They guide employees toward making decisions that are in line with helping the business achieve its goals.

There should be series of action steps under each objective. These will be more specific than the objectives they support, and should also note who is responsible and when the actions should be completed.

The final step is to regularly evaluate the status of each action step, noting when it was completed and whether or not the objective was reached. Business owners should ask themselves if the cumulative completion of the objective resulted in reaching the goal.

There are many variations to this scheme, but this is a common format in strategic planning. Keep in mind that goals are likely to change over time to account for the economy, the industry and other factors involved with the business.

A Road Map for Succession

Developing a succession plan should also be a part of the strategic plan. Successful succession is one of the most important goals for any business. Other goals might deal with profitability, expansion or operational issues, but none is more important than succession.

Usually a succession plan or exit strategy begins by establishing a team to focus on it. While the team will deal with the broad issues of the strategic plan, it will not be involved with how that plan is accomplished. Instead it focuses on the steps needed to position the business partners for the ultimate succession. What this means is that the business will get its marching orders from the succession planning or exit strategy team. That is where the business and its managers take the ball and kick it across the goal line. It is crucial for the succession planning team to review all existing goals to make sure they support the overarching exit goal.

It is often helpful to have a facilitator. Since a CPA is likely to be on the succession planning team and is often a good choice to play this role. Contact Filler & Associates for more information about strategic plans and succession planning teams.