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Strategy & Business Planning of Privately Held Companies

by Peter McCann

208 pages; quality trade paperback (softcover); catalogue #00-0060; ISBN 1-55212-396-0; US$19.50, C$30.00, EUR19.50, £13.60

Strategy & Business Planning of Privately Held Companies explains an integrated conceptual framework of strategic and business planning. It provides over two hundred tables, diagrams, examples, worksheets and checklists to help shareholders, executives and managers plan and achieve superior financial and competitive performance.

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about the book      about the author      Contents, list of tables and list of diagrams      catalogue info

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About the Book Strategy & Business Planning of Privately Held Companies is, in the words of one executive reader "designed to be a kind of quick reference source of distilled wisdom for businesses. The style is user friendly; lots of charts, checklists, anecdotal illustrations and diagrams. Perhaps the best praise I can give it is that I wish I had it while I did my own MBA." The first 25% of the book presents an integrated conceptual framework. The book explains an eight step planning process and introduces the five basic corporate Positions: Get Out, Turnaround, Tune Up, Status Quo and Go For Gold. The reader is able to identify his or her company's Position and select feasible strategic options. The book equips the reader to use six Paradigms: the Accountant's, Microeconomic, Marketing, Operations, Organizational Behavior and Managerial Preferences Paradigms. There are many examples of the five Principles: Focus, Ethics, Excellence, Frugality and Urgency. The middle two-thirds of the book emphasizes the practical aspects of examining, assessing and documenting corporate perfomance, strategic decisions and implementation plans. There are over two hundred tables, diagrams, examples, worksheet and checklists to help shareholders and executives plan and achieve superior financial and competitive performance. The book concludes with detailed instructions on writing strategic, business and financing plans. Reader Reviews "Over the last fifteen years I have observed the evolution and refinement of Peter McCann's theory of strategy and his very practical approach to business planning. He has combined intellectual depth and extensive management consulting experience to advance the art and science of business planning. Executives of privately-held companies should read this book." -Graham Parsons, Senior Vice-President, Bank of Montreal "STRATEGY & BUSINESS PLANNING is designed to be a kind of quick reference source of distilled wisdom for businesses. The style is user friendly; lots of charts, checklists, anecdotal illustrations and diagrams. I think you will find Peter's approach to business refreshingly straightforward and without pretence. Perhaps the best praise I can give it is that I wish I had it while I did my own MBA." -Robert Alloway, printing industry executive, Canada "We really enjoyed reading the book. It offers a comprehensive treatment of an important topic. It has been a good source of practical knowledge ... and we are sure that in the future it will be a helpful adviser for our businesses. We found this book well-written and quite enjoyable." -Gulmira Imanbekova and Kalamkas Zhumadilova, Kazakstan

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About the Author Peter McCann holds a Dipl. A.A. from Algonquin College of Applied Arts & Technology and an MBA from the Richard Ivey School of Business, University of Western Ontario, Canada. He is (visiting) Associate Professor, Kazak-American College of Business, Kazakstan. He has consulted with privately held companies, banks, large corporations and Canadian Aboriginal organizations. In 1989 he established McCann Corporate Consulting Associates, Hamilton, Ontario, Canada. Praise for Peter McCann "It was obvious that students were very excited about the opportunity they had to study with Peter. He brings significant practical experience to the classroom. His classes are some of the most practical, useful and interesting our College has been able to offer." -Dan Ballast, Vice-President, Kazak-American College of Business, Kazakstan "I got the firm impression that we could be getting a very positive response to this submission. I do not believe that it could have been put together or presented in a more professional manner. I want to thank you sincerely for your patience, all your hard work in a pressed and concentrated time frame, while contributing to us the huge benefit of your extensive experience." -David Smith, President, Mohawk Rock, Six Nations of the Grand River First Nation "Thank you for the extremely prompt and efficient reporting you provided to us. Your assistance was most appreciated." -Senior Account Manager, Royal Bank of Canada "Your consultation was extremely helpful! We are making progress and look forward to further input from you in the near future." - Client, Resource Industry "Thanks very much for your diligence in getting us through the dreadful mortgage process. I was impressed with your gentle but persuasive technique and your ability to look at the larger issues." - Client, Medical Technology Systems

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Contents, list of tables and list of diagrams

TABLE OF CONTENTS

List Of Diagrams
List Of Tables
List Of Examples
List Of Cliches To Live By
List Of Worksheets

ACKNOWLEDGEMENTS

CHAPTER 1: PLANNING THE PLAN

Getting The Most Benefit
The Eight Step Planning Process

Survey
Narrow the Issues
Research Key Issues
Analyze
Build A Consensus
Plan
Act
Measure Results
And Then, Start Over

Reasons To Plan
Roadblocks
Speed bumps
Strategic & Business Plans

Congruence And Harmony

Financing Plans
Planning The Plan

Who Plans?
Learning From Past Planning Experiences
Know The Reader And User
Boundaries On The Plan
Past Performance & Perceptions
Non-Financial Progress
Lessons Learned, Or Wrong Lessons Learned?

CHAPTER 2: POSITIONS, PRINCIPLES & PARADIGMS

The Positions
Get Out
Turnaround
Tune Up
Status Quo
Go For Gold
Select The Position That Fits
The Position Quiz
The Principles
Ethics
Focus
Excellence
Frugality
Urgency
The Paradigms
Microeconomic Paradigm
Accountants' Paradigm
Marketing Paradigm
Operations Paradigm
Organization Behavior Paradigm
Managerial Preferences Paradigm
Balance Among The Paradigms

CHAPTER 3: TACTICAL STRATEGY OPTIONS

Why Consider Tactical Strategy Options Now?
Generic Tactical Strategy Options
The Seven Tactical Strategy Clusters

Shareholders & Management Issues

Shareholders
Management
Risk Tolerance

Company Self-Image & Attitude Issues

Orientation
Industry & Competition
Focus, Diversification & Integration

Financial Performance Issues

Setting The Goal Line
Revenue Or Cost Driven
Pace Of Growth
Asset Issues
Liabilities & Equity Issues

Customer Issues
Product Issues

Low Cost/High Differentiation
Economies of Scale & Scope
Innovation

People Issues

The Company Ranks First
Culture & Organization
Change Issues

Scope Of Change
Speed Of Change

Position Specific Strategies
Get Out Strategies

Bankruptcy
Orderly Liquidation
Slimming To The Exit
Sell The Business

Turnaround Strategies

Bet The Company
Sell The Business
Turnarounds By Management
Take A Gunfighter To A Gunfight

Tune Up Strategies

Attitude Transplant & Cultural Transformation
Specific Paradigm Emphasis
Generic Tune Up Program

Status Quo Strategies

Steady State Option
Sell The Business
Attitude Transplant & Cultural Transformation

Go For Gold Strategies

Steady State
If It Ain't Broke, Break It
Growth By Acquisition
Internal Growth
Sell The Company

Building Consensus

Who To Build A Consensus With
The Consensus Traps

The False Consensus Trap
The Second Choice Agreement Trap
The Locked In Trap
The Consensual Consensus Trap

CHAPTER 4: EXTERNAL ENVIRONMENT

There Are No Safe, Stable Environments
Scanning The External Environment
Governments
Technology
Inflation & Interest Rates
Currency Fluctuations
The Industry Chain

Industry Stereotypes
Industry Chain Analysis
Industry Opportunities & Threats
Overly Competitive Industries
Industry Consolidation

Competition

The One Geographic Unit Up Test
Future Competitors
Different Sets Of Competitors
Power, Aggressiveness & Vulnerability
Competitors May Become Allies
Summarize Competitors

CHAPTER 5: REVENUES & EXPENSES

Cash Basis Of Business
Historical Financial Performance
Financial Ratios

Growth
Efficiency
Solvency
Return On Equity
Target Return On Equity
Summary Of Financial Measurements

Revenue Versus Cost Focus

Determining A Revenue Or Cost Focus

Getting To Know Your Costs

Cost By Year, Per Cent & Daily Rate
Fixed & Variable Costs
Conversion Of Fixed & Variable Expenses
Breakeven
Sales, Cost of Sales & Gross Margin
Contribution Margin
Contribution Margin Return On Investment

Revenues & Costs By Product

Product Categories
Contribution Margin On Products

Revenues & Costs By Customer

Customer Categories
Contribution Margin On Customers

Customer / Product Contribution Margin Matrix
Costs By Activities
Costs By Categories
Overhead
Review Accuracy Of Cost Analysis

CHAPTER 6: CUSTOMERS & MARKETING

Customers
Customer Archetypes

Who's Buying Dinner? - The Good Customers
Who'll Buy Lots of Dinners? - The High Potential Customers
Who's Eating Dinner? - The Over-Served & Under-Priced Customers
Who's Stealing Dinner? - The Bad Debts & Slow Payers
We'll Buy Dinner This Time - The One-Time Discount Customers
The Giant In The Sleeping Bag - The Dominant Customer
The Marginal Customers, Because Of Us & Them
The Marginal Customers, Because Of Us
The Used To Bees - Customers Who No Longer Buy From Us
The Should Bees - Customers Who Aren't But Should Be
The Soon To Bees - The Emerging Customers

Customer Profiles
Marketing Is A Focus On Satisfying Customers Profitably

Public Relations & Community Service
Selling
Market Research
Niche Marketing
Commodity Or Value Added
Selling Commodities
Selling Innovative Products
Channel Of Distribution
Pricing

Price & Volume Sensitivity
Price Increases
Price Cuts
Incremental Pricing
Price Wars

Marketing Ideas

Listen To Your Current & Past Customers
Executive Interaction
Remove Irritants
Annually Add A Benefit
Industrial Design
Broaden The Natural Product Line
Marketing Approaches Are Not Forever
Database
Direct Mail
Telemarketing
Open Houses & Trade Shows
Product Demonstrations
Internet Commerce

Marketing Expenditures

CHAPTER 7: ASSETS, LIABILITIES & EQUITY

Comparitive Attractiveness Of Products

Map Comparative Attractiveness Of Products
Product Strategy

Operations, Marketing & Administration
Operations

Operations Data
Time Is Money
Beware The Great Leap Forward
Logistics: The Distance Too Much Traveled
Capacity Constraints: Bottlenecks

Suppliers

Manage The Relationships With Key Suppliers
Developing Supplier Linkages

Purchasing
Research & Development

CHAPTER 8: ASSETS, LIABILITIES & EQUITIES

The Optimum Capital Structure
The Asset Strategic Choice

Levels Of Investment In Assets

Cash

Cash Budget

Accounts Receivable

Analysis Of Accounts Receivable
Accounts of Receivable By Risk Weight

Inventory

Measuring Inventory Effectiveness
Gross Margin Return On Inventory ('GMRI')

Working Capital
Fixed Assets

Adequacy & Value of Fixed Assets
Capital Expenditures

Other Assets

Patents, Trademarks & Capitalized Research & Development Expense
Loans To Shareholders & Directors
Mortgage Receivable
Inter-Company Loans and Receivables, Stocks and Bonds Of Related Companies
Stock and Bonds of Unrelated Companies

Liabilities
Current Liabilities

Bank Lines Of Credit
Accounts Payable
Current Portion Of Term Debt
Other Current Liabilities

Term Liabilities

Term Liabilities Budget
Deferred Taxes

Equity

CHAPTER 9: ADMINISTRATION & GOVERNANCE

Administration

Accounting
Cost Accounting
Computer Operations
Fraud
Insurance

Life Insurance On Key Executives & Shareholders

Foreign Exchange Risks
Speculation

Ownership & Governance

Legal Form of Business
Classes Of Shares
Ownership

If Shares Owned By Other Companies
Ownership Diagram
Potential Changes To Share Structure Or Ownership
Shareholder Agreements

Board Of Directors

Board of Advisors
Peer Group Roundtable

Professional Advisors

CHAPTER 10: PEOPLE

Legal Minefield
Organization

The Formal Organization
The Centralized Organization
The Chaotic Organization

The Optimum Organization

Avoiding The Sub-Optimum Organization Traps

Company Culture

Company Imperatives & Culture
Leadership & Teams
Changing Company Culture
Not Changing Company Culture

Highly Paid People & Key People

The Company's Best People

Comments On People

Rise To Meet Expectations
Measure What's Important
Sincere Appreciation
Good Employee Benefits
Middle Management
Hiring - This Is Important Stuff!
Pay For Attendance Or Performance?
Reward All Achievers
No More Annual Raises
Training & Cross-Training
Let's Not Fire People
From Deadwood to Firewood
Semi-Annual Appraisals
Quick Written Employee Appraisals
Let's Fire People
The Cost Of Not Firing
From Deadwood To Driftwood
Exit Interviews

Internal & External Congruence
Two More Questions About People

CHAPTER 11: MANAGEMENT

Management Is Important
The Management Formula

Quality of Management
Quantity of Management
Managerial Time

Time Management Principles

Mapping Management
Who Is The Qualified Successor?
Remuneration

Return On Labor
Return On Investment
Return On Money Lent
Other Payments
Remuneration Too Low
Remuneration Too High

The Positions & Management
Two More Questions About Management

CHAPTER 12: THE PLAN

Review The W5 Of The Plan
Building Consensus
The Core

The Company's Core Today & Tomorrow

Vision & Mission Statements

Vision Statement
Mission Statement

Goals
Opportunities
Vulnerabilities
Weaknesses
Potential Disasters
Strengths
The First Draft Of The Plan
Preliminary Financial Projections
The Value Of Additional Information And Analysis
The Second Draft Of The Plan
Screening To The Core

Screen #1: The Test of Common Sense
Screen #2: Special Pleadings
Screen #3: Life Support For Yesterday's Failures
Screen #4: The Simplification Process
Screen #5: The Non-Core
Screen #6: The Power Of The Collective
Screen #7: The Meaningful Benefit
Screen #8: The Adequacy of Financial Resources
Screen #9: The Adequacy of Human Resources
Screen #10: Unacceptability High Risk
Screen #11: Unintended consequences

Priorities

Ranking Priorities

Implementation
Implementation Table

The Path of Minimal Effort
The Path of Minimal Resistance
The Path of Frustration
The Path of Progress
The Blockers
Decisions Don't Get Implemented

Getting Action

After Implementation

Finalize Financial Projections
Finalize & Customize The Plan

Cover Page
Notification Page
Table of Contents
Executive Summary
Request For Financing
Vision & Mission Statement
Corporate Strategy & Tactics - Summary
Ownership & Board of Directors
Professional Advisers
History & Historical Financial Performance
External Environment
Industry
Competition
Customers
Marketing
Products
Suppliers
Operations
Administration
Asset & Liability Management
Revenue & Expense Management
Personnel & Management
Resource Gaps
Implementation Table
Financial Projections - Summary
Annual Financial Projections - Detailed
Monthly Financial Statement Projections, 12 Months
Annual Financial Statements (3-5 years)
Recent Monthly Financial Statements
Color Photographs of Major Fixed Assets
Fixed Asset Appraisals
Fixed Asset Schedule
Accounts Receivable Analysis
Inventory Analysis
Schematics of Manufacturing Processes
Product Brochures
Management Resumes
Personal Net Worth Statements of Guarantors

Edit, Edit

APPENDIX 1: FAMILY BUSINESSES

Privately Held Companies
Business Owned By A Family
Family Business
Passing Ownership To The Next Generation
Choosing The Successor
Positions & Family Businesses
Submerged Family Dynamics

APPENDIX 2: DEALING WITH BANKS

What Banks Do
The Borrower's Lender Risk
Applying For A Loan
Positions & Banking

APPENDIX 3: CONSULTANTS

Consultants

Humorous Definition of Consultants
Technical Consultants
Organizational Renewal Consultants
Management Consultants
Auditors & Consultants In Accounting Firms & Associated Firms
Retired, Outplaced Or 'Between Jobs' Executives As Consultants
Money
Money
Objectivity
Subjectivity
Knowledge Transfer
Chaos Transfer
Building Cohesive Teams
Consuming Scarce Staff Resources
Affirming & Disarming
Creating Divisions

Hiring A Management Consultant

APPENDIX 4: THE POSITION QUIZ

Taking the Position Quiz

Tally The Position Quiz
Graphing The Position Quiz

Overlapping Positions
If The Position Seems Correct
If The Position Seems Wrong

ABOUT THE AUTHOR

Peter McCann
McCann Corporate Consulting Associates

Strategic & Business Planning
Management Consultation
Seminars & Speeches

To Contact Peter McCann Or McCann Corporate Consulting Associates

LIST OF DIAGRAMS

Diagram 1.1: The Planning Process
Diagram 1.2: Strategic & Business Plans
Diagram 2.1: Positions, Problems, Performance & Urgency
Diagram 2.2: Positions
Diagram 2.3: Principles
Diagram 2.4: Paradigms
Diagram 3.1: Strategy,Tactics &Tactical Strategy
Diagram 3.2: Selection Of Tactical Strategy Options
Diagram 4.1: The Industry Chain
Diagram 4.2: Alliances Of Competitors
Diagram 5.1: Cash Basis Of Business
Diagram 5.2: Revenue & Cost Strategy, & Positions
Diagram 5.3: Costs By Products, Customers, Activities & Categories
Diagram 6.1: Marketing Focus
Diagram 7.1: Map Of Comparative Attractiveness Of Products
Diagram 8.1: Debt / Equity Trade-Off
Diagram 8.2: The Asset Strategic Choice
Diagram 9.1: Ownership
Diagram 10.1: The Formal Organization Chart
Diagram 10.2: The Centralized Organization Chart
Diagram 10.3: The Chaotic Organization Chart
Diagram 10.4: A Culture That Wasn't Broke
Diagram 10.5: Assessing People
Diagram 10.6: Internal & External Congruence
Diagram 11.1: The Management Formula
Diagram 11.2: The Expanded Management Formula
Diagram 11.3: Mapping Management
Diagram 12.1: The Paths Of Implementation
Diagram A1.1: Family Businesses
Diagram A3.1: Graphing The Position Quiz
Diagram A3.2: Graphing The Company*s Position

LIST OF TABLES

Table: Expected Value Of Retained Earnings After 20 Years
Table: Strategic, Business, Functional & Financing Plans
Table: Comparison Of Positions & Athletic Conditions
Table: The Cost Of Moving Stuff Around
Table: Tactical Strategy Clusters & Dominant Paradigms
Table: Sales Projected On Various Growth Rates
Table: Turnaround Essentials
Table: Turnaround Phases
Table: Generic Tune Up Program
Table: Who To Build A Consensus With
Table: Scanning The External Environment
Table: Competitors & Customers
Table: Research The Competition
Table: Summarize Competitors
Table: Condensed Financial Statements
Table: Implied Current Strategy & Potential Tactical Strategy
Table: Techniques To Analyze Costs
Table: Costs By Year, Per Cent & Daily Rate
Table: Fixed &Variable Costs
Table: Breakeven Table
Table: Piano Parts Manufacturing Inc. - Gross Margin
Table: Gross Margin & Contribut on Margin
Table: Contribution Margin Return On Assets
Table: Determine Product Categories
Table: Product Categories
Table: Determine Customer Categories
Table: Revenues By Customer Categories
Table: Sales By Customer & Products
Table: Costs By Activities
Table: Costs By Category
Table: Questions For All Market ng Programs
Table: Price & Volume Sensitivity
Table: Align Marketing With Company Priorities
Table: Summary Of Suppliers
Table: One Distribution Company's Purchased Inputs
Table: Savings Due To Professional Purchasing
Table: Possible Target Levels Of Equity
Table: Debt / Equity Trade-Off
Table: Analysis Of Asset Options
Table: Analysis Of Accounts Receivable
Table: Accounts Receivable By Risk Weighting
Table: GMRI
Table: Fixed Assets
Table: The Cost Of Owning A Fixed Asset
Table: Term Loan Wth Different Maturities & Rates
Table: Boards Of Directors & Advisors, & Peer Group Roundtables
Table: Present Value Of Employee Cost
Table: Bonuses Based On Comparative Performance
Table: Let's Fire People (Almost) Immediately
Table: Time Management Principles
Table: Analysis Of Shareholder / Executive's Income
Table: Possible Goal Topics
Table: Possible Weights Of The Decision Criteria
Table: Abbreviated Implementation Table
Table: Outlines For Strategic, Business & Financing Plans
Table: Indicators Of A Family Business
Table: Choosing The Successor In A Family Business
Table: The Borrower's Lender Risk
Table: Eight Point Program For Managing Bank Relations
Table: Characteristics Of A Professional Consultant
Table: Some Advantages & Disadvantages Of Consultants

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Catalogue Information

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