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- Featured Article: What Strategic Planning is NOT
- News Break: Merger & New Team Member Announced
- Success Story
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What Strategic Planning is NOT
In the next few editions of The Strategic Edge Newsletter, we will discuss one of our favorite topics, Strategic Planning. However, before we talk about what it is, we will dispel the top 5 myths about what it is not.
Myth #1: Strategic Planning is completed at a “Strategic Planning Retreat”
In Corporate America, many companies have a “strategic planning retreat” with their top executives sometime in the late summer or fall. It is not uncommon to find the title “Strategic Planning Retreat” in the meeting invitation. However, a Strategic Planning Retreat typically lasts only a couple of days. A few days may be
While some of the actions seem strategic in nature, in general, a retreat‐like setting is not sufficient to establish a true Strategic Plan.
focused and full of intentional time spent talking about the business, it is nowhere near the amount of time necessary to discuss, ponder, and strategize for how your business should position itself for the long-term future. Typical results of these types of retreats include a list of tactical action items or, as we call them at American Business Advisors, Business Action Plans. While some of the actions seem strategic in nature, in general, a retreat-like setting is not sufficient to establish a true Formal Strategic Business Plan.
Myth # 2: A Strategic Plan is an “Exit Plan”
Most business owners think about how they will exit their business. Many of them create a plan to exit, and they surround themselves with the appropriate advisors to carry out the exit plan. However, the Strategic Plan of your business should by no means cross paths with your personal desire to exit the business. In fact, businesses with an enduring and solid Strategic Business Plan will invariably have greater value at the sale of the business than those businesses without a Strategic Business Plan. The Strategic Business Plan is actually an intangible asset that provides significant value and worth to your business.
Myth # 3: A Strategic Plan is a “financial forecast”
Finances are critical to the success of any business, however, according to Dr. Porter of Harvard University, only 50% of company profits and growth are tied to operational excellence and the other 50% are tied to strategic business planning and positioning. It is, of course, best practice to create a financial forecast to predict your profits and growth, and how you will fund that growth, whether through cash flow or capital. Just don’t allow your financial forecast to take the place of the even more important Strategic Business Planning process which will allow you to tap into the other 50% of your profit and growth.
The Strategic Business Plan is actually an intangible asset that provides significant value and worth to your business.
Myth # 4: A Strategic Plan is a “program of the month”
Many times, employees don’t take a business owner seriously because they have great ideas (a blessing given to entrepreneurs and business owners), however, they change their direction every time one of those great ideas becomes the next big thing. Your Strategic Business Plan should not change monthly–not even yearly for that matter. Occasionally, maybe every three to five years, you should review your Strategic Business Plan to see if there are parts of it that need refreshing. However, a Strategic Business Plan is not a “program of the month” and if it is treated as such, your team will not believe in it, and your business will suffer or at minimum, not perform to the levels it could.
Myth # 5: A Strategic Plan is something ‘we can do next year’
While many businesses do wait until next year or maybe even several years, those businesses are missing out on the power of a focused and clear Strategic Business Plan. As noted in Myth # 3, 50% of your profits are tied to strategic planning, therefore, your business may be missing out on half of the profitability that it could be generating. Every day or year that passes without a Formal Strategic Business Plan (the blueprint of your business) is lost opportunity.
If a business’s profit is not in the top 25% of their industry, by definition it is underperforming, and the reason is likely the lack of a formal Strategy Business Plan.
News Break: Merger & New Team Member Announced
Your Team Just Got Bigger: American Business Advisors and Jon Hokama & Associates have merged!
We are thankful for your support of our firms over the years and we are delighted to announce new developments that will greatly benefit you.
On July 1, American Business Advisors and Jon Hokama and Associates merged and added a third partner. Going forward, we are collectively called American Business Advisors® (ABA). Originally founded in 1984, ABA is proud to introduce the new ownership team comprised of Robert C. Benson, Jon K. Y. Hokama, and Dennis R. Guse.
These changes have positioned us to serve more clients in more markets. ABA now has offices in Colorado, Arizona, Florida, Minnesota, and Hawaii.
How we at ABA help business owners:
We empower our clients to:
- significantly increase profit and cash-flow;
- build an effective team of leaders and engaged employees;
- grow to their next level;
- create time for significance;
- experience successful successions.
ABA continues to provide its complete proprietary and proven package of Developmental Consulting Services™ using ABA’s 14 Dynamics of Building a Cash Cow™ to galvanize owners to grow their businesses to their next level.
In the future, we will keep you informed of our actionable insights into the rapidly evolving business world through our social network communications, weekly ABA Journals and monthly Strategic Edge Newsletters.
We look forward to serving business owners through our passionate support of their desire to grow and produce wealth to successfully pursue their dreams, become market leaders, and fulfill their business and personal objectives.
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Thanks for doing business with us.
Robert C. Benson, President
Jon K. Y. Hokama, Senior Vice President
Dennis R. Guse, Senior Vice President