Business Plans: SOP for M&As
Fail to plan, plan to fail. It’s a well-worn management cliché, but it still has something urgent to say to us in the context of mergers and acquisitions.
A business plan is a corporate vision quest in writing: a road map that declares strategic goals, sets financial targets, and establishes a timeline for achieving both. A formal business plan is the hallmark of a well-run printing company. It’s also a document that must be in place if the owner intends to grow the company by acquisition or position it for a profitable sale.
A business plan articulates what you want to do with your company and how you mean to accomplish it. Boiled down to basics, it’s a forecast that pinpoints your anticipated sources of revenue growth over the next three years: from organic sales increases, the addition of new capabilities, an expansion of the sales force, entry into new markets, and so on. You keep the financial projections real by periodically revisiting the plan and course-correcting it as needed.
Drawing up and sticking to a business plan takes discipline, but all of us rely on that in our personal and professional lives. If you’re a golfer, your aim is to shave a specific number of strokes from your handicap by the end of the season. As a print company owner following a business plan, your numerical goal might be to go from $5 million in sales now to $7 million this time next year. Your plan guides you to achieving the increase with milestones and deadlines that make the goal attainable.
It’s possible to muddle along without a written business plan, and unfortunately, that’s what many printing companies do. But, at the M&A stage—a stage that New Direction Partners believes all printing companies will reach eventually—the absence of a business plan makes it all but impossible to move forward with a deal.