Minnesota entrepreneurs may want to learn about the potential benefits of preparing a six-year business plan. This perspective extends far beyond the two or three years that the conventional business plan addresses. Instead of just considering the short-term needs of the company, the six-year plan provides business leaders and investors with more insight into the trajectory of the new company’s life cycle. There are several factors to consider when developing such a plan.
Preparing and following these types of plans can help business owners maximize the number of options available in the future. This long-term approach allows management to allocate resources more efficiently around growth objectives and various options such as recapitalization, developing an exit strategy or transitioning into new ownership. Defining the roles for corporate governance and different participants is also imperative when developing a six-year plan.
This long-term outlook should also evaluate potential opportunities to perform divestitures in the future, whether they are targeting under-performing divisions or initiated for strategic purposes. A survey conducted by SunTrust Banks determined that almost 60 percent of the business leaders participating preferred an organic growth model over anything else. The most effective approach for achieving organic growth involves vetting strategies for the long term and using financial professionals for capital formation.
Entrepreneurs who want help with business formation and planning may want to obtain the assistance of a business law attorney at the initial stages. One threshold issue is the type of legal entity that the new enterprise should use. As there are several differences between limited liability companies and corporations, the input of an attorney can be valuable.
This information is general in nature and should not be construed as tax or legal advice.