Finding Planning time is difficult when you are chasing work in a competitive economy, and nearly impossible when you are booked to capacity. Regular short financial checkups are not enough to ensure your financial health, but performing a thorough annual comprehensive exam may uncover symptoms and prevent financial disease from becoming terminal.

A regular review requires concentration, so get away from the daily routine of the office. Make sure that you have the necessary data and reports prepared well before your review session. Include key employees, family members with an ownership stake in the company, and professional advisers who will be a source of creative ideas and critical thinking. Here are some key areas to cover, and a few questions to stimulate your thinking, as you make your annual P.L.A.N.S.

P is for PROJECTS

Critique all projects by reviewing cost and profit data for each. Analyze or graph the figures by customer, market niche, type or size of job and any other criteria you choose. Where do you make the most money: residential, commercial or industrial work? How well do you work with general contractors, construction managers or owners? Are you more efficient and effective on design/build or traditional design/bid/build jobs?

Which customers demand the most service: the most profitable or the least? Who pays you the fastest and without prodding? You may find that the 80/20 rule applies here: you spend 80 percent of your effort serving 20 percent of your client list. This is the time to let high maintenance customers go and refine your list to retain only those who enable you to make a decent profit.

L is for LIABILITIES

How much debt are you carrying and how is it structured? Do you use credit lines for short-term needs and mortgages for facilities support? Are you intending to support planned growth from earned profits or external sources of credit? How much risk are you willing to take to acquire new work?

Do you need to grow the company or downsize and become more selective about your work and the way you finance your assets? Are your security systems well organized and complete and your legal exposure controlled and minimized? What policies and procedures need to be revised or added?

A is for ASSETS

What do you own outright, and when will these assets need to be replaced? Will you continue to own your vehicles, equipment, office space and property, or will you lease, rent or share fixed assets, tools or trucks when appropriate and cost effective?

Do you have people or equipment that are not currently productive? Are your assets functioning to support the kinds of projects you are currently performing? If not, are you willing to invest in replacing them or training them? Are they properly catalogued, protected and managed?

How can you become more efficient, do more with less, organize and track sensibly, and control the impulse to accumulate unnecessary “stuff”? Make sure everything you own and everyone you employ is working for you instead of draining cash.

N is for NICHE

What changes are occurring in the marketplace, and how will new technologies affect the kinds of projects you will perform in future years? Are you a buggy whip manufacturer in a world of automobiles, or do you emphasize flexibility and fluidity as your build your skills, resources and knowledge base throughout the company? What new niche will be the best fit for your employees without straining your capacity or taking resources from profitable existing work?

How will you manage the learning curve and the new clients without neglecting your existing ones? What steps will you take to maintain your most profitable relationships and meet the changing needs of your best existing customers?

S is for STRATEGY

Now, envision the future. Ask yourself the questions that you may have been avoiding: When will you retire or sell out? Who will run the business when you are gone?

Think about what you have done to make sure you have “bench depth” on your team, so that the termination or resignation of key people will not cripple your ability to complete ongoing obligations. What will be the legacy of your company? Do you see a time when the company may no longer exist?

These are tough questions, and most business owners never start, much less complete, such an extensive planning and strategizing session. It is difficult to find the time, the courage and the perspective to take such an honest look at your current strategy, financial health and future potential.

The preventive annual exam will not guarantee perpetual success, but avoiding the process only makes it easier to ignore potential problems.

Architect Daniel Burnham’s famous advice is, “make no small plans.” His legacy is the grand vision of the Chicago lakefront. Are your P.L.A.N.S. equally grand? EC

NORBERG-JOHNSON is a former subcontractor and past president of two national construction associations. She may be reached via e-mail at bigpeng@sbcglobal.net.