ARM Business Planning for 2007

ARM companies that are experiencing challenges with their existing business models or that are investigating new ways of doing business may benefit most from business plans.  These plans should include an analysis of a company’s own resources as well as a description of the larger forces shaping the market.  The result of this planning should vary based on management’s view of where the industry and their company is headed – while external resources may be added to the development of a business plan, it should never be written by someone else.  Successful business planning helps a company in these situations assess their place in the market and suggest avenues for improving performance.

Company C is one of the largest accounts receivable management companies in the U.S. with roughly $100 million in revenue.  This company offers contingency collections, first party collections, and portfolio purchases to its clients, who are national credit grantors in a number of industries.  In order to increase recovery rates, the company is considering more of a legal collection strategy in the new year.

ARM companies of this size have resources that provide sources of advantage in the planning process.  Externally, larger customer bases and greater brand recognition help this company gain knowledge of the market and move in different directions.  Internally, market researchers and strategic planners help managers with the planning process, making business planning less a matter of one executive’s personal discretion.  Business plans within these companies are likely to be more formal and more thorough.

These three examples remind me of the venture capital firm where I worked before joining Kaulkin Ginsberg.  Technology companies seeking funding sent us business plans upon business plans – stacks of them, Inboxes full of them.  These meticulously assembled documents included chapters, footnotes, and appendices, a wash of detail that largely went unread.  I remember thinking that the time that went into preparing these documents should have gone into creating the businesses themselves – by developing marketable products, finding actual customers, and, of course, realizing real revenues.

I would be happy to confidentially discuss your own planning process and growth strategies for 2007.  Even more so, please accept my best wishes this year in executing successfully on your plan.

Paul Legrady is Director of Kaulkin Ginsberg's Research Group. He is responsible for the development and delivery of custom research projects and research publications analyzing the accounts receivable management industry.  Kaulkin Ginsberg is the parent company of insideARM.com.