The New Year provides a clean slate for
many companies. Time to start anew. Many
just keep on doing what they often been doing
like any other day in the year. They do
not have a formal plan or if they do it is out
dated. They rely on the old ‘if it ain’t broke,
why fix it’ approach.
Others might like to develop a strategic
five-year business plan, but finding the time
seems impossible. Still others have the
time, but given the political and economic
uncertainty they are not sure exactly where
to begin. No matter what the reason, “He who
fails to plan is planning to fail” (Ben Franklin
and Winston Churchill, et al.).
Small business planning has many different facets including strategic, marketing, budget, cash flow, tax and succession planning. Each plan has a different purpose but they are all designed with the same goal in mind, the success of the business. Some focus on P&L strategies while others focus on asset growth strategies. Some are short term while others take a longer view.
There is no one right way to plan, but there are many wrongs ways and failing to plan is probably the worst of the worst.
Phillip K. Whittemore, certified public accountant and business consultant with Whittemore, Dowen and Ricciardelli LLP suggests, ” Planning can be an overwhelming process for many, because they are too busy working in their business to work on their business.”
When he advises his clients he first establishes how they view their business in terms of their life. “There are two primary motives for starting your own business.” Whittemore said, “Many people just want the freedom to control their destiny and make a descent living. Others have a passion to stretch and grow their company beyond a living.”
He asks numerous probing questions to identify goals that need to be included in their plan. Are you happy with your business? What is going well? What isn’t going well? Are there opportunities you are missing out on or not fully capturing their potential? Are their threats looming on the horizon that need to be addressed? New competition? Regulatory outchanges? Where do you see yourself in five years? What will your business look like in five years, ten years, and further? He went on to say, “the answers to these questions become the basis for developing the direction of the company.”
Once he establishes a sense of where his client wants their business to go, he tackles the how do we get there from here part. He stressed, “Depending on the intended users of your plan it can be formal and structured for example to support financing goals or it can be a simple map to help keep your eye on the goal. Unless a formal document is required, I tend to create maps to be used for guidance. No matter the format, it should be reviewed periodically, or at least annually and modified to reflect any changes.”
Whittemore cautioned, “While it is possible to plan for every contingency, it is impractical. Plans should give a general sense of direction to help shape daily decision making that supports the long term goals of the business. The plan must also be flexible and adaptable. As key factors evolve, they need to be addressed to keep the company on track.”
In the planning process, he views his role as an offensive coordinator, outside the game with a birds eye view of the field, arming the quarterback with potential plays. “As accountants and business consultants, we maintain an external perspective that is not constrained by the day to day operating pressures. We are trained to analyze business, illuminate areas of concern and offer guidance which is essential in the planning process.,” he said. “When I help a client develop a plan, I blend their observations, experience and goals with my knowledge and insights. During this process, we frequently identify areas that require outside expertise. I am often able to connect my clients with services and expertise they need. This will save them time finding and vetting resources and in many cases may save them money by capitalizing on WDR’s relationships.”
When working with clients Whittemore adopts a long range view. He helps his clients plan for growth, sustainability and ultimately an exit. “Many small business owners overlook the exit plan until they near retirement.” He warns, “It is critical, if your major source of retirement income is to be derived from your business, that you carefully plan how you will get your money out of the business when you are ready to retire. You can not count on the fact that Junior has an interest in stepping up to run the family business when you retire. Assuming Junior is interested, is he capable of filling your shoes? The best intentions often do not result in a successful family transition that will be able to support your retirement.”
When developing succession plans with small business owners, Whittemore helps them build their business in a salable way. He suggest a decentralized style that reduces the reliance on a sole owner. “In order for a business to be sold for more than the value of it’s assets,” He advises, ” It has to be able to run as well or better without the owner’s presence. Achieving an infrastructure in a small business to ensure its sustainability after you retire is critical. If the real value in your business is you it will be impossible to recoup that investment unless you have laid the ground work for Junior or a buyer to seamlessly step into your shoes and maintain your customer relationships.”
“I really enjoy getting to know my clients and their businesses. I am available as a sounding board, a coach, a resource, an ally and often a close friend.” Whittemore closes, “My goal is to make my clients more successful and planning is a critical component to achieving that goal.”
Whittemore is one of six partners at Whittemore, Dowen & Ricciardelli, LLP, a full service accounting firm with offices in Queensbury and Saratoga. Services include tax planning and preparation for individuals and business, tax problem resolution, small business services and consulting, wealth management, estate planning and elder care, audit, review & compilation, forensic accounting, fraud accounting, strategic business planning and succession planning.
For more information please call 792-0918 or visit their website, www.wdrcpa.com.