Are You Accountable to Your Business?
Business Life Planning (BLP) provides a solid platform from which you can develop your business and establish important lifestyle and business goals.
In last month's issue, we explained the benefits of having a BLP and why it was crucial for the ongoing success of every business. A copy of last month's article is available on our website: www.sgapl.com.au.
Failure to plan for the many rapidly changing circumstances that can affect every business, can most certainly ensure planning to fail. We would therefore now like to focus our attention on the ongoing process that our clients undertake as part of their commitment to their BLP.
It is important that our clients understand that the report that is generated as part of the BLP is not the overall value or final outcome of the process, it is merely a document which outlines both their and other stakeholders ongoing commitment to goals and future actions required.
The BLP process helps identify the challenges faced by businesses and also provides action plans and resources to help overcome them. One of the most common outcomes for businesses is the establishment of an advisory board.
We know from our own experience that most business owners are good at what they do (e.g. a plumber or hair dresser) and therefore spend most of their time on these tasks rather than working on growing the business. An advisory board consists of the business owner/s plus an objective and experienced business person or people who are not family and/or managers of the business. Of course the size and input of the advisory board greatly varies depending upon the business size and requirements.
The primary role of the advisory board is to drive the strategic decision making of the business, and ensure all actions identified during the BLP are allocated to a person within the business or an external professional for implementation. It is also the board's responsibility to prepare growth strategies and plans for the business, discuss future succession, risk mitigation for the business and overall measurement of the business success on an ongoing basis.
The major benefits of establishing an advisory board include but are not limited to:
- Acquisition of high powered talent and expertise not otherwise available
- Fresh, reality based, objective evaluation of needs, talents and opportunities
- Major assistance in the tough decisions about business and family that need to be made
- Significant strengthening of the business planning process
- Enhanced objective problem solving
- Mature, knowledgeable guidance for better development of a coherent, innovative strategy
- Accountability of all key stakeholders to the actions required to meet objectives
- Objective assessment of actual performance of family members and key non-family personnel.
There are of course many considerations when establishing an advisory board for your business. You will need to ensure that your business has the infrastructure to support an ongoing advice board and will need to make decisions on the following:
- Board Member Duties
- Leadership and Authority of members
- Size of board
- Relationship with employees and access to day to day business
- Meetings - frequency and formality
- Compensation of board members.
Our expert team can help you navigate through the BLP process and also assist you with the establishment of an appropriate advisory board for your business. For more information or to discuss your individual business planning requirements please contact Skeggs Goldstien.
Jonathan Reynolds, Wealth Adviser - Skeggs Goldstien AssociatesGWP Magazine Issue #30, May-June 2010
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