Utilizing Business Tools to Assist Family Firms Adapting to Changing Conditions



Advisors understand that family businesses are passed down from generation to generation. While family members work in the business and hold ownership, there may be a perpetual cycle of operating with little planning, creativity, innovation, inspiration, or motivation to help families adapt in changing conditions. While the business may make money, it may be existing rather than thriving. Oftentimes, those who work day-in and day-out have no idea why processes and philosophies abound except, “That’s the way grandpa did it.” As businesses age, a variety of factors can change including the business environment, competition, substitutions or replacements, tax liabilities, or family growth or changes (Ward, 2004). These factors require businesses to adapt or change to survive, let alone thrive.

In reviewing current prominent literature in books and journal articles relating to family businesses, we note that the basics of business management tools seem to be lost. Trends and hot topics abound relating to inter-generational transfer, wealth management, boards and non-family management concerns, and social media marketing, but important concepts and business tools are referenced interchangeably or mislabeled. In this article we review business plans, annual plans, and strategic plans and how these tools can be utilized to assist enterprising families.

Business Plans

A business plan is a dynamic document prepared to explicitly outline all considerations in the business. Many people are familiar with business plans as a tool to seek funding. A business plan, however, is not only valuable for new venture creation and funding, but for paying attention to all dynamics in a business on a regular basis.

A business plan may be used for both internal and external stakeholders. Internally, the employees, management, and shareholders want to know the direction a business decides to take. External stakeholders include the general public, investors or financiers, and vendors. They, too, want to know the direction a business will take. What are the values, value proposition, and marketing scope? Will the business maintain for posterity or have growth considerations? What are projected audiences and potential profitability? Who are competitors? Will the business be perpetual, or will owners have an exit strategy? All of these ideas can be expressed and regularly updated in a business plan.

Business plans are simple and dynamic. A business plan sets out the intentions of the business. A business plan includes the values, vision, and mission of the business. The business plan is a broad, detailed view of the company, considering specifically how a company will function, by whom, for whom, where, and at what costs (Gersick, Davis, Hampton, & Lansberg, 1997).

Operating Plans

Operations in a business typically have set systems, functioning requirements, industry and government restrictions, production emphasis, and core business standards that allow the business to exist. Concerns of operations include the day-to-day activities, month-to-month, quarter-to-quarter, and one-year or annual calendar cycle for a family business (Wickman, 2011). Annual operating plans include setting annual objectives, establishing goals to meet objectives, establishing milestones to measure and adjust, and strategies to address finances, customer concerns and ideas, product or service quality, revenue, ownership control, growth, issues, organizational talent acquisition and development, and scheduled strategic changes (Aronoff, McClure, & Ward, 2011; Attiyah, 2013; Hawfield & Zaepfel, 2013; Wickman, 2011).

Objectives state what is planned to be accomplished. Goals are then actions taken to achieve family business objectives. Each goal may be broken down into milestones or small, sub-goals. Tactical ways to address each goal or sub-goal are strategies to execute. Milestones are of key interest to adjust strategies to be able to attain goals and objectives (Attiyah, 2013).

Operational, one-year plans bring “your long-range vision down to the ground and mak[e] it real” (Wickman, 2011, p. 68). Family businesses need a realistic set of annual goals (Wickman, 2011). These annual goals and those from the business plan are discussed on a regular basis by the board or governing body as reported through management. Monitoring is what increases performance (Hilburt-Davis & Dyer, 2003).

Strategic Plans

Strategic plans are important because “the environment created by one generation results in difficulties for the members of the next generation – hindering their ability to solve problems, exacerbating conflicts among them, or stifling them and making them so frustrated they leave” (Ward, 2004, p. 5). A strategic plan asks the big question, “Where are we going?” The tool of a strategic plan includes a broad array of concerns and focus on a long-term timetable. The complexity in a family-owned business is also, “What family members will have what ownership and what role(s)?” However, only 37% of family businesses have a written strategic plan (O’Connell, Raymond, & Raymond, 2003).

Ward (2004) notes how taking action today shapes the future; “inaction shapes the future as well, but just not by design” (Ward, p. 9). Family-owned companies are concerned not only with financial and business components, but also with the overlay of people who will be invested in the business or functionally operating the business as family descendants (Carlock & Ward, 2010; Poza & Daugherty, 2014). The family dynamic becomes more complex with each succeeding generation.

Preparation of a strategic plan educates key stakeholders about an industry and a business’s position, family members not in the business creating support and empathy for current realities, and everyone with the same opportunity to literally get on the same page to foster the business (LeCouvie & Pendergast, 2014). The ultimate goal is “to create a competitive advantage for the business, hopefully an advantage that can be sustained over time” (LeCouvie & Pendergast, p. 166). Utilizing business plans guide companies through changing business cycles and help focus on all key business facets simultaneously (O’Connell et al., 2003).

Strategic plans should include long-term considerations such as succession planning, leadership, estate planning, ownership, wealth and shareholder transfers, and exit strategy (Emens & Wolper, 2004; Fishman, 2009; Ward, 2004). A strategic plan includes emphasis on competitors, a SWOT (Strengths, Weaknesses, Opportunities, and Threats) or SWOC (Strengths, Weaknesses, Opportunities, and Challenges) analysis, resources, ownership, and industry analysis (Carlock & Ward, 2010; Fishman, 2009; LeCouvie & Pendergast, 2014).

An extremely important component of family business strategic planning is balancing needs and roles of family, clarity of ownership, and functionality for operating the business (Aronoff & Ward, 2011). Family issues include health, prosperity, continuity, participation, community role, communication, education, values, and common goals. Ownership considerations address performance, capital allocation, succession, strategic direction, and liquidity. Business operations include finances, human resources, vendor relationships, and customer relationships (Aronoff & Ward).


As advisors, we strive to help families adapt to changes in their business; proper planning plays a foundational role for successful enterprising families. “No doubt, many family business owners have plans in their heads, but few put their plans in writing” (Buchholz et al., 1999: 221). All of these plans are dynamic and should include key family members and other stakeholders to consider all angles of the business. Finally, all of these business tools—the business plan, annual operational plan, and strategic plan—need to be written down and made available to all internal stakeholders, shareholders, board members, and additional key personnel.


Aronoff, C. E., McClure, S. L., & Ward, J. L. (2011). Family Business Succession: The Final Test of Greatness. New York, NY: Palgrave MacMillan.

Aronoff, C. E., & Ward, J. L. (2011). Family Business Governance: Maximizing Family and Business Potential. New York, NY: Palgrave MacMillan.

Attiyah, R. (2013). The Fearless Front Line: The Key to Liberating Leaders to Improve and Grow Their Business. Brookline, MA: Bibliomotion, Inc.

Boulton, R., Libert, B., & Samek, S. (2000). Cracking the Value Code. New York, NY: HarperCollins.

Buchholz, B. B., Crane, M., & R. W. Nager, R. W. (1999). The Family Business Answer Book. Paramus, NJ: Prentice Hall.

Carlock, R. S., & Ward, J. L. (2010). When Family Businesses are Best: The Parallel Planning Process for Family Harmony and Business Success. New York, NY: Palgrave MacMillan.

Emens, J. R., &Wolper, B. E. (2004). Family Business Basics: The Guide to Family Business Financial Success. Galena, OH: AASF Publications.

Fishman, A. E. (2009). 9 Elements of Family Business Success. New York, NY: McGraw-Hill.

Gersick, K. E., Davis, J. A., Hampton, M. M., & Lansberg, I. (1997). Generation to Generation: Life Cycles of Family Business. Boston, MA: Harvard.

Hawfield, W., & Zaepfel, J. (2013). Game-Changing Advisory Boards: Leveraging Outside Wisdom to Deliver Sustainable Value. Westlake Village, CA: The Board Group.

Hilburt-Davis, J., & Dyer, Jr., W. G. (2003). Consulting to Family Businesses: A Practical Guide to Contrtacting, Assessment, and Implementation. San Francisco, CA: John Wiley & Sons, Inc.

LeCouvie, K., & Pendergast, J. (2014). Family Business Succession: Your Roadmap to Continuity. New York, NY: Palgrave MacMillan.

O’Connell, R. J., Raymond Jr., G. G., & Raymond, R. (2003). American family business survey. Springfield, MA: Mass Mutual Financial Group/Raymond Institute.

Poza, E. J., & Daugherty, M. S. (2014). Family Business. Mason, OH: South-Western Cengage Learning.

Ward, J. L. (2004). Perpetuating the Family Business: 50 Lessons from Long-Lasting, Successful Families in Business. New York, NY: Palgrave MacMillan.

Wickman, G. (2011). Traction: Get a Grip on Your Business. Dallas, TX: Banbella.

About the contributors

Morgan Clevenger, Ed.D. is an assistant professor in the Sidhu School of Business at Wilkes University. He can be reached at [email protected].




Lanie Jordan, CFBA, CFWA, FFI Fellow, is the executive director of the Family Business Alliance at Wilkes University and a member of The Practitioner editorial committee. She can be reached at [email protected].