Ptyxis and Planning

Walking by a black birch tree the other day, I noticed that the tips of the branches all held long, prominent, pointed buds that seemed ready to burst into a spring flush of leaves. These plump buds are compact little packages whose embryonic leaves are folded in an intricate “ptyxis” and packed tightly together, awaiting their call to arms in 5 months’ time. Somehow these trees have the ability to prepare for next season to insure that they have a good crop of foliage to capture the sun’s energy. Similarly many companies could benefit from a little more foresight and take after these birch trees.

There are times when you just need to move forward in your business and planning is not paramount. However, often the best course is to have a good idea of how you will utilize your resources and to what end. Here are a couple areas where planning for the next year (or three) is critical.

• Forecasting sales and inventories It is hard to operate a business without a good knowledge of what you expect to happen in the near future. Many decisions are based on the expectations that cash flows will be at a certain level, inventory will be consumed at a certain rate, and your returns will meet a certain value.

• Resources and Capital It takes a good deal of time and effort to bring on new people, to expand facilities, or to obtain additional capital. All are based on the knowledge of the level of business in the next several years.

• Product Development With product life cycles shortening and development times of 1 to 3 years, having a good road map of your route is necessary. Milestones and expenses need to be laid out in clear fashion, with the usual contingencies for surprises.

• Exit planning Though some may feel that they can sell their business any time they wish, prudent leaders accept that a proper strategic sale will take 1 to 3 years of preparation. Getting the business polished up for sale requires a thorough review of all aspects as well as a deep analysis of the acquisition market to assess the potential acquirers and timing.

So though these short, dark days of winter may lull you into a comfortable feeling on your outlook, be sure that your buds are well packed and ready for the next year. Without good preparation and planning, the spring showers and sun will leave you with little verdure.