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Tactical Planning

Tactical Planning

Tactics are the means used to achieve an objective, which may involve complex operational patterns, activity, and decision-making that leads to tactical execution. A critical step in The BEI Seven Step Exit Planning Process™ is committing to tactical planning, which is the planning necessary to accomplish owners’ value goals and figure out how they will implement their decisions.

What must owners do to accomplish their value building and exit goals?

Let’s look at a case study involving Stuart Kimmery, a fictional but representative business owner.

Like all owners, Stuart had strengths and interests that he brought to his company. He also had areas of weakness and lacked interest in certain areas.

Stuart knew he needed help building business value, but he didn’t know where to start. First, he got in touch with his Exit Planning Advisor, Kris. During their meeting, Kris asked, “What do you not like to do in your business?”

Stuart replied, “Making collection calls, doing the books, paying bills, and hiring and firing employees. When I started my business, I knew I’d have to do those things, but they really take the joy out of running it. I usually just put those things off or do them half-heartedly.”

Though Stuart understood that these tasks were critical to his company’s success, he dreaded doing them. Fortunately, Kris was familiar with tactical planning and was able to deliver good news to Stuart.

“What if I told you that my Advisor Team and I could help you avoid doing the things you don’t want to do while increasing your business’ value?”

“I’d say you were a liar or a magician,” Stuart chuckled. “But if you really can do that, I’m all ears.”

Based on the goals Stuart had shared with Kris in earlier meetings, Kris suggested that Stuart find people to perform the tasks he didn’t like, and create the systems and procedures to ensure that those tasks were done well and timely. His alternative was to do it all himself, thus working harder and longer.

Kris provided Stuart with a short questionnaire to determine exactly where he should focus his time and attention in terms of growing value. From there, he’d be able to develop specific tactics to increase business value. After determining what Stuart did and did not want to do, Kris and her Advisor Team could work to figure out how to let Stuart do the things he wanted while delegating the things he didn’t like doing to other qualified employees.

The key to tactical planning is finding the best person for each job and letting that person complete the task at hand.

In our experience, we’ve found that there are five common tasks for which tactical planning is a successful solution:

  • Diversifying the customer base.
  • Expanding sales to current customers.
  • Defining and measuring success: setting goals and holding people accountable.
  • Creating a consistent sales and marketing message.
  • Tax planning (entity choice/prospect of increasing tax rates).

Let’s look at some of the questions you can ask to spark tactical planning within these tasks.

Diversifying the Customer Base. Do you know what percentage of sales or income is attributable to each of your customers? If one of your clients accounted for a disproportionate amount of total sales in the past 12 months, you may have difficulty convincing a future buyer of the value of your company’s customer base. Understand that high customer concentration can prevent a third-party sale of an otherwise attractive company.

Expanding Sales to Current Customers. Are you selling all you can to each customer? What can you do to increase sales to existing customers?

Defining and Measuring Success. By which parameters do you measure your company’s success? Consistent achievement of annual sales targets? Ability to penetrate a difficult market? Knowing the answer to this question is important as you grow value because it is the basis for incentive compensation and establishing interim targets the company must reach to grow at the pace needed to meet your values-based goals and Exit Objectives.

Creating a Consistent Marketing and Sales Message. Many owners incorrectly assume that most or all of their employees can accurately describe what the company does. If you have communicated your company’s purpose to your employees, can most or all of your employees accurately describe its unique competitive advantage?

Tax Planning (entity choice/prospect of increasing tax rates). No discussion of tactical planning would be complete without raising the issue of taxes. As your clients work to increase their companies’ value, it is wise to do everything legally possible (and practicable) to protect the value of their companies from unnecessary taxation. You and your Advisor Team can make recommendations about entity structure, using multiple entities for tax minimization or choice of location based on state income tax rates.

These aspects of tactical planning are just a few that you might want to address with your clients. Of course, our Support Team helps you organize and focus your efforts efficiently so your clients can exit in style.


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