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Should a Life Plan be a part of Your Business Plan?
By Andrew Smith | April 14, 2008
When I facilitate business plans for farmers, it is frequently impossible to separate the farmer and his family from the farming business. The two can be significantly intertwined.
The same situation frequently exists for family businesses and for many lifestyle businesses.
So in these situations, a Life Plan or a Lifestyle Plan can become a very important part of the planning process. With this Life Plan/Business Plan combination, it is a relatively straightforward procedure to:
1. Get clear on what the owner and his/her family want in terms of financial and other lifestyle or emotional rewards;
2. Factor these “desirables” into the day-to-day Business Operations Plan - to minimise the work/life conflict; and
3. Make better decisions on the purpose and direction of the business.
If you have potentially conflicting business and lifestyle goals, a combined Business Plan/Lifestyle Plan may be a very good solution.
But, but, but - there are some catches.
To help you decide on the merit of including a Life Plan in your Business Plan, here are some points I use when helping my clients with this type of decision:
Simplicity: From a business perspective, it is simpler and more straightforward if your business life and personal life can be kept separate. In other words, there should be a good reason to blend business and personal goals.
Ownership: The ownership structure of the business needs to be considered. If you own the lot, your choices are unencumbered. You likely have the right to run the business to meet your needs only. However, if there are other shareholders involved, several pitfalls can come up.
Family conflict: If there are major differences in value systems, or there is a history of family conflict, a combined Life and Business plan may be a bad decision.
But before dismissing this option, consider the exceptions…
I have facilitated a combined Business Plan and Family Plan for a family at war. It was a rewarding experience for them and very satisfying for me.
To achieve this, I organised a family meeting at a neutral location. Each family member was encouraged to give their point of view – including their outcome expectations. Where needed, I used facilitation techniques to engage and draw out shyer family members. I also used techniques to ensure that one or two family members did not dominate the meeting.
Those involved with the day-to-day business operations were asked to explain their roles and the difficulties they experience.
Getting everyone involved in this way worked out very well.
Exposing the difficulties and complexity of the business (it was involved in engineering) was a real eye-opener for some family members. It brought about a shift in their thinking. For example, rather than maintain their somewhat selfish approach, two feuding brothers got to understand the complete business and the big picture for the family.
The brothers also got to see the longer term payoffs that would come from everyone pulling in the same direction.
Bottom Line: If you are considering a combined Business and Life Plan, look to identify potential internal problems. Combining the two can produce great outcomes. However, you need to be prepared to invest time and patience to handle the people issues.
In Part 2 of this article, I will describe the four steps of a combined Life Plan/Business Plan.
Andrew Smith - The Business Plan Guy
Topics: Business Plan Tips & Ideas |
April 14th, 2008 at 5:34 pm
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
April 17th, 2008 at 8:59 pm
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