|Study Finds Most Independents Lack Strategic Plans
|| Entrepreneurism or Planning
| Key Words
|| Business plan, family businesses
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A first-time report, "2004 Trends in the NGA Family Business Environment," was sponsored by the National Grocers Association. It concluded that many independents need to pay more attention to planning in areas including strategic succession, estate and retirement. Only 20% of respondents had a strategic plan. In fact, many had very little in writing at all - no contracts and little governance.
The report called strategic planning "the most important part of operating a competitive and growth-oriented business in today's marketplace."
On the subject of succession, 67% of respondents said they would want their families to retain the business if the owner dies or became disabled, but almost 60% said they don't have a succession plan. When asked about compensation and incentive mechanisms to attract and retain key executives, 29% of respondents did not provide these benefits. A large portion of key employees were working without contracts, subjecting them to the generosity of the business owner.
Most respondents had wills, but only 58% had established trusts. Not having trusts suggests that retailers might be missing out on significant estate-planning and tax-reduction opportunities.
Retailers need to ask themselves the following key questions:
- Do I have an adequate process for strategic planning?
- Will my corporate financial planning enable my business and my family to meet potential contingencies or grow my business?
- What is my exit strategy?
- Should I keep my business or sell it?
- If I keep the business, who should own the stock?
- How should I treat my children who are not active in the business?
- What is the business worth?
- How should I attract and retain key executive talent?
- Do I have a realistic retirement and financial security plan for my spouse and I?
Why is planning important for an independent venture?
Who is the plan written for?
The article discusses the need for a succession plan. Is this only important in a family business? Explain your answer.
||"Study Finds Most Independents Lack Strategic Plans," Supermarket News Feb. 23, 2004, p. 20.
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