Why Do We Need A Corporate Renewal Industry?

According to a white paper available on the Turnaround Management Association (TMA) website, signs of a troubled business are (listed in their order):

• Ineffective management style
• Over diversification
• Weak financial function
• Poor lender relationships
• Lack of operating controls
• Market lag
• Explosive growth
• Precarious customer base
• Family vs. business matters
• Operating without a business plan

With the possible exception of an ineffective management style, signs 2 – 9 can be viewed as symptoms or effects of operating without a business plan. No matter how many times it’s said or how tired we are of hearing it its true, “If you fail to plan, plan to fail.” Has anyone ever told an aspiring business owner that they don’t need a business plan? There hasn’t been a business plan outline published that, if followed and properly applied, wouldn’t project, mitigate or eliminate any of the problems sited. Why, for example, do you have a precarious customer base? Are you trying to supply a product or service that’s unwanted or over priced? Maybe you have non-existent or poor customer service. A little market research or competitive analysis while generating the business plan may have led to a different product presented at a more acceptable price. How about over diversification? Growth paths and methods would be delineated in a proper business plan.

Granted, conditions change as the company grows. All of a sudden you have employees and you’re presented with different opportunities. The business plan becomes out dated and the folks at the front line may not even know it exists. All the time and money spent preparing a business plan was wasted, right? WRONG! Let me say it again, WRONG, WRONG, WRONG. If any time and money were wasted it’s because you didn’t make the plan a living, guiding document and you probably didn’t engrain it in all of your employees. You treated your plan as just another hoop to be jumped through or box to be checked off.

Business plans cost time and resources from the time you put pen to paper to the eventual liquidation. There is no escaping the expense. It’s just a matter of how you want to distribute the cost. You can spend it up front with your blood, sweat and tears, or perhaps hire a consultant to guide you, with lesser effort throughout the company’s life, or you can spend it in the end on a lost reputation, a horde of attorneys, lost company and a turnaround consultant courtesy of the corporate renewal industry. Think about it, it’s now in your hands, later it will be in theirs.