Projecting a business’s operations far into the future can be a very subjective exercise. Small businesses, by their nature, can experience any number of events that can significantly alter the outcome of the projections. Strategic planning is an exercise in which the outcome provides a roadmap that guides a business’s decisions to match the goals of the Strategic Plan.
It is important to recognize that the combination of projections and strategic planning is a process and that just because the projection is changing all the time doesn’t mean they aren’t useful to the business owner. What it does mean is that as conditions change, the projections change too. Changes in the business environment will likely alter the opportunities. Threats to the business’s success are plausible from time to time. It is good business practice integrate such scenarios into the overall Strategic Plan.
Understanding the drivers of business value is a critical to the strategic planning process. It’s imperative to invest the time and energy into changes that will positively impact value to the business. It’s an act of futility to affect change for the sake of change. Guided by the Strategic Plan and financial projections, business can take thoughtful action toward change to outcomes for the good.
An experienced business appraiser can provide insight into how you can add value to your business and help implement financial projections into your Strategic Plan. At Kehlenbrink, Lawrence & Pauckner we’ve been working with business owners for many years dealing with this very dynamic.
Tell us about your strategic approaches to change in the comments. When did it add value and when did it result in wasted efforts?
