Why you need a business plan and a management plan for your family business
Questions we answer in this guide:
- How does your management plan complement your business plan?
- What should a good management plan cover?
- When should you create a management plan?
Management plans supplement business plans. They're especially useful for family businesses, though any business would benefit from having one.
A good business plan needs direction, management and, above all, ownership of roles and responsibilities.
By contrast, a management plan:
- ensures the business plan is supported in its strategic direction and any structural steps that are needed
- enables rapid, easy, business-critical performance management, which is essential from the outset in helping you to assess whether the business plan is working as you intended
- facilitates quick action if something looks as though it's going off track
You’ll probably look at your business plan a couple of times a year – but ideally, it'll be more... 3 times is good going. By contrast, you should be looking at your management plan at least every quarter.
What goes into a management plan?
Management plans cover:
- who controls the business day to day and who supports that person/those people
- how control of the business is carried out
- what happens when you can’t control what's happening to the business
- what powers family business owners will have over those who are managing the business day to day
- key business performance, control and internal reporting criteria and metrics
- what you want your performance targets and ways of measuring it to be
- how you’re going to control customer and business interactions, including data handling and key transactional data
- staff training and development needs, including for younger members of the family who may be coming in to ‘learn the trade’. Our family business employment policy template will help you flesh out a lot of the detail and consider your options here.
When should you create your management plan?
This document should follow on from your business plan and your family constitution. Much of what you need to consider in creating those 2 documents will assist you in fleshing out the content of your management plan.
You can use our checklist of family business ownership and management choices to help you formulate your intentions and record them in a management plan.
Want to know more about setting up and running a family business?
We've picked out some other guides that may be of interest – you'll find them on this page ready for you to browse.
And if you'd like affordable, pay-as-you-go tailored advice from one of Farillio's experts, simply use our Speak to an Adviser feature and we'll put you in touch with someone at a time that works for you.
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