How to design a Strategic Plan in the Family SME: Phases, tools and mistakes

The compass that almost no one has

You look at most Spanish family SMEs and you wonder the same thing: how could they have got this far without a plan? The answer, almost always, is the same. With a good product, with a lot of hard work, with loyal clients of twenty years, and with a founder who carries everything in their head. It has worked - until it stops working.

The numbers bear out this feeling. Family businesses account for 92.4% of Spain's business fabric, more than 1.1 million companies, generate 70% of private employment and contribute close to 58% of private gross value added (IEF data, 2025). But generational fragility is scandalous: only between 10% and 15% reach the third generation. It is the 30-13-3 rule that everyone in the middle market has heard mentioned at some seminar: 30% pass to the second generation, 13% to the third, 3% to the fourth. And the problem, almost always, is not the market. It is the lack of a plan.

Before going on, it is worth dispelling a confusion. There are two things called a “strategic plan” and they are not the same. The first is a document with mission, vision, values and a SWOT presented on a Thursday to the committee, applauded, filed and never looked at again. I will call it traditional planning. The second is a quantified roadmap, with defensible assumptions and projections that a bank, a fund or an external director believes. I call it a bankable strategic plan. The first decorates a wall; the second creates value. This article is about how to make the second, which is the essence of our strategy consulting.

What a strategic plan is NOT

I will start with what it is not, because almost everyone who comes to our office brings one of these confusions:

• It is not a business plan to get started. The business plan justifies opening the kiosk; the strategic plan decides what to sell in the kiosk over the next five years.
• It is not an annual budget. The budget is the strategy with twelve months' short-sightedness. If the budget contradicts the strategy, there is a serious problem.
• It is not a mission and vision statement. A motto on the wall does not guide capital allocation decisions. The bank does not care about your values statement; the bank cares about your projections.
• It is not a SWOT. The SWOT is a useful tool. And, like everything useful, it can become a fetish. A SWOT with no associated decisions is an expensive decorative picture.
• It is not “doing things well”. Michael Porter said it thirty years ago and it still goes unheard: operational effectiveness is not strategy. Doing the same as your competitors a little better is imitable; strategy consists of doing something different or doing it in a different way.

What it is: a roadmap with a time horizon, testable assumptions and a measurable impact on the value of the company. And it works. The academic literature has been repeating it for decades (Miller and Cardinal in the nineties, Brinckmann in 2010, George and others in 2019): companies that plan have, on average, better performance. It is not a magic formula; it is a positive and moderate correlation. Like everything in life.

The six phases of the strategic plan

A well-made plan goes through six phases. They are non-negotiable, although the order of some can overlap.

Phase 1. External, internal and financial diagnosis

Before deciding where to go, you have to know where you are. The external diagnosis (PESTEL, Porter's five forces, competitive map) and the internal one (SWOT, capabilities, resources) are familiar territory. Less familiar is financial data hygiene, which at Maraz we consider a precondition. Before projecting the future you have to reconstruct a credible past:

• Isolate recurring EBITDA, separating one-off items, founder expenses that are not real costs, and that “bonus” to the managing director that no one remembers why it was booked there.
• Normalise commercial balances: clean up doubtful receivables, obsolete stock (the kind that “will sell eventually”), latent provisions.
• Calculate the real profitability by business line with homogeneous cost accounting, not the one that comes out of the ERP by default.
• Analyse the working capital intensity by business unit. Often the surprise is here: there are lines that appear to have margin and consume cash like a factory.

We close this phase by comparing the internal ratios with the sector benchmark via SABI. It is where the most uncomfortable and most useful conversations tend to appear: “it turns out your inventory turnover is in the 20th percentile of the sector”. That objective figure, which no one disputes, is the honest starting point.

Phase 2. Mission, vision and objectives

Mission and vision are inputs, not the destination. A good mission delimits where we play; a good vision describes a verifiable future. “Being leaders in excellence” is not a vision: it is a headline. “Reaching EUR 100m in revenue with a 15% EBITDA margin in five years” is.

Objectives are SMART and financial: growth in CAGR, target EBITDA margin, target ROIC, maximum leverage. Without figures, there is no objective; there is a wish.

SMART is an acronym for formulating well-framed objectives. Each letter represents a requirement:

• S - Specific. The objective must be stated clearly, without ambiguity. “Grow” is not specific; “increase revenue in the French market” is.
• M - Measurable. It must be quantified with a concrete metric. If it cannot be measured, it cannot be tracked. “Improve the margin” is no good; “raise the EBITDA margin from 12% to 16%” is.
• A - Achievable. Ambitious but realistic. An impossible objective demotivates and discredits the plan. Too easy a one adds nothing.
• R - Relevant. It must be aligned with the overall strategy. A well-formulated objective disconnected from the plan is misspent effort.
• T - Time-bound. With a deadline. Without a term, any objective blurs. “In the next 24 months”, “by the close of financial year 2027”.

Phase 3. Strategic lines and prioritisation

Of everything that could be done, you choose what will be done. Here lies the art: giving things up. Prioritisation uses an impact-effort matrix and, above all, an NPV-per-initiative criterion. The right question is not “is it a good idea?”, but “how much value does it add and what resources does it consume?”. The list of “things it would be nice to do” has a natural tendency to grow until it becomes unexecutable.

Phase 4. Operational action plan

Each strategic line comes down to concrete initiatives. With an owner, budget, milestones and tracking KPIs. If something lacks those four elements, it is not planned: it is merely stated.

Phase 5. Financial model

The strategy is translated into a P&L, balance sheet and cash flow projected over 3-5 years. It is where the plan puts on its outdoor clothes. Here we talk about scenario analysis (base, optimistic, stress) and identifying the critical levers through sensitivity. I return to this in the financial section, which is where the Maraz angle resides.

Phase 6. Monitoring and review

The plan is a living document. It is reviewed in a quarterly strategy committee, with a rolling forecast that compares actual against forecast, and is adjusted when the assumptions break. A plan that is not reviewed is not a plan: it is a photograph.

The tools: what they are and how not to ruin them

No tool does the work. All can be misused. This is the honest table:

And modern examples that go beyond the classics: OKRs (objectives and key results) for quarterly deployment; the Japanese Hoshin Kanri for 3-5 year deployment; A.G. Lafley and Roger Martin's Playing to Win, which reduces strategy to five concrete decisions (aspiration, where to play, how to win, capabilities, systems). The least cited and sometimes the most useful: Rita McGrath's transient advantage, which reminds us that no competitive position lasts forever, and that planning is also knowing when to exit a business.

Quantifying the strategy: the financial angle

Here lies the difference between a pretty plan and a plan that works. At Maraz we hold that every strategic line must be translated into the three projected financial statements. Without that translation, strategy is an opinion. And no bank finances opinions.

The financial model covers 3-5 years, with defensible assumptions (growth by segment, price evolution, planned CAPEX, working capital evolution) and scenario analysis (base, optimistic, stress). It is not about getting the future right. It is about bounding it.

The KPIs an investor will look at:

The central financial concept is the spread between ROIC and WACC (the weighted average cost of capital). A company creates value only when its return on invested capital exceeds what that capital costs it. And its uncomfortable corollary, which almost no one explains to founders: if ROIC is below WACC, growing destroys value. You spend your life wishing to grow, and it turns out that sometimes the best thing is not to grow.

The plan also underpins the company valuation: it makes it possible to project a future EV/EBITDA and a discounted cash flow (DCF) with the plan's own assumptions. The Spanish middle market today pays an average EV/EBITDA multiple of 7.8x (Blue Mountain, 2025). Each strategic line can thus be valued for its contribution to enterprise value. Sensitivity analysis identifies where the critical levers are - almost always price and margin before volume - and that is where the board should concentrate execution.

A bankable plan is, moreover, a precondition for transactions. Refinancing debt with banks without a defensible plan is today an exercise in faith. Bringing in a fund without a quantified plan is letting them write their own (and it won't be the one you like). Selling the company without a plan is leaving money on the table. As an illustration, McKinsey published in 2023 an analysis of 600 listed family companies versus 600 non-family ones: the family ones generated a higher TSR and a +17% average ROIC. Discipline pays, if applied.

SGR: where family and strategy collide

There is a formula that sums up, better than any speech, the underlying conflict in family SMEs:

SGR = b × ROE

SGR is the Sustainable Growth Rate, b is the earnings retention rate (b = 1 - payout ratio) and ROE, the return on equity. The SGR indicates the maximum pace at which a company can grow financing itself exclusively through the reinvestment of its profits. No more debt. No capital increase.

Breaking down ROE using the DuPont method:

ROE = Net Margin × Asset Turnover × Leverage

The reading is direct and uncomfortable: every euro paid out in dividends is one euro less of possible organic growth. If the founder or the various family branches demand a 60% payout to cover their lifestyle (or to compensate the family members who do not manage), b drops to 40%. With a ROE of 15%, the SGR comes out at 6%. If that same company retains 80% of its profits, the SGR rises to 12%. If the strategic plan requires growing 12% a year, either the payout changes, or more financial leverage is accepted, or growth is lower. There is no fourth option, however much the family would like one.

The SGR contributes two things to the strategic plan: a quantified ceiling on growth without additional debt, and - most importantly - a technical argument for difficult family conversations. The dividend discussion stops being emotional when someone puts the equation on the table and shows the three real economic options: fewer dividends, more debt or less growth. Choosing is uncomfortable. Not choosing is usually worse.

The particularities of the family business

The family business is not a normal company with surnames. It is a more complex system. Renato Tagiuri and John Davis described it at Harvard in 1978 with the three-circle model: family, business and ownership are three overlapping subsystems that generate seven distinct interest groups. The same person can be a parent, a shareholder and a managing director at the same time. And decide with those three hats on at once, on the same matter, in the same meeting. Anyone who has seen how Sunday's tensions creep into Monday's management committee knows what I mean. The strategic plan only works if it aligns the three circles; if it ignores any of them, it executes only halfway.

Family Protocol and Strategic Plan: they are not the same

Both are necessary and are often confused. They differ in the axis on which they act and in their nature:

• The Family Protocol acts on the Family-Ownership axis. It is legal and institutional, with an intergenerational vocation. Regulated as to its publicity by RD 171/2007, it addresses who can access ownership, how family members join the business, dividend policy, conflict arbitration and the regime for the transfer of shares. It is the constitution.
• The Strategic Plan acts on the Management-Ownership axis. It is operational and financial, with a 3-5 year horizon. It defines commercial direction, CAPEX, business initiatives, KPIs. It is public policy.

A protocol without a plan is a constitution without public policy. A plan without a protocol is public policy without a constitution. Both are needed and neither replaces the other.

Governance: who decides what

The decision-making in the family business requires separating three spaces that are frequently confused. The family council is relational: it listens, aligns visions, brings cohesion. It does not decide operations. The board of directors approves the strategy and supervises its execution; this is where an independent director brings objective oxygen and technical arbitration. The management committee runs the day-to-day. Chairing all three at once - the founder's habitual mistake - ensures that none works well.

A useful legal note: the Spanish Companies Act (art. 225) requires directors to exercise the diligence of an “orderly businessperson” and (art. 226, 2014 reform) expressly protects business judgement: strategic decisions are protected if taken in good faith, without personal interest, with sufficient information and an adequate procedure. A rigorous strategic plan is, besides good management, legal cover for the administrative body. A double incentive.

Typical strategic lines in a family SME

In practice, the lines are grouped into five families:

• Organisational professionalisation and governance (includes separating the bodies and bringing in the first independent director).
• Growth in market share in current markets.
• Industrial diversification or geographic expansion.
• Optimisation of margins and employed capital (this is where the fractional CFO usually finds the best quick return).
• Technical and legal preparation of the generational succession. It is a strategic line in itself, not an inheritance formality settled with the notary.

The ten mistakes that ruin a plan

After many years seeing plans from the inside, the list is surprisingly stable:

1. Confusing the strategic plan with the budget. The budget is twelve months; the strategy, a horizon.
2. Not quantifying objectives or lines. What is not measured is not executed and cannot be defended to anyone - not the bank, not the fund, not the board.
3. Using the SWOT as an end in itself. The SWOT is a diagnosis. If it does not generate decisions, it has served no purpose.
4. Planning fifty things. Prioritising everything is prioritising nothing. It is better to execute three lines well than to start twenty and finish none.
5. Absence of rigorous financial analysis. A strategic plan without numbers is a letter to Santa on corporate letterhead. And here a specific mistake comes in: ignoring the SGR and then wondering why the cash doesn't arrive.
6. Not involving the management team. A plan imposed from above, with no sweat from the team, is not executed. Full stop.
7. Not reviewing the plan. The natural destiny of a plan without monitoring governance is the drawer. At least quarterly you have to take it out, compare it with reality and adjust.
8. Analysing yourself in a vacuum. A plan that ignores the competitive context is a monologue. Competitors, suppliers and clients also plan.
9. Lack of tracking KPIs. Without concrete indicators and an owner per metric, execution dissolves into excuses.
10. Confusing strategy with tactics. Strategy decides where we compete and how we win. Tactics, what we do tomorrow morning. Confusing them is the fastest route to a plan that ends in week 3 because “we have to attend to the clients”.

Typical timeline: how long a well-made plan takes

Between 3 and 4 months of intensive design, followed by a continuous cycle of execution and review.

Less than 3 months usually means a slapdash plan. More than 5 usually means a consultancy billing by the hour while the company gets nervous. The balance is in the range indicated.

When to make (or remake) the strategic plan

There are moments that demand a new plan or a deep review:

• Generational change or handover in management. Without a plan, succession is a lottery.
• Entry of a fund or external investor. They will ask you for the plan; better to have it than to improvise it. If the scenario is an M&A transaction, the plan is the most important sales material.
• Debt refinancing. A refinancing process without a defensible plan is a bank conversation that starts badly.
• Disruptive change in the environment: technology, regulation, competition.
• Stalling of sustained growth. If you have been flat for three years, you have to rethink why.
• At the very least, every 3-5 years, even if reviewed annually.

Conclusion: the plan as a system of governance

The difference between the family SMEs that reach the third generation and those that do not rarely lies in the product or the team. It lies in strategic and financial discipline. A well-designed strategic plan - quantified, bankable, aligned with the family's three circles and anchored in the business's free cash flow generation - is the tool that turns the will to endure into decisions that create measurable value.

At Maraz Corporate Finance we build strategic plans that a bank, a fund and a board believe, because they are backed by defensible projections, scenario analysis and a rigorous translation of strategy into value. Our model integrates external financial management with strategic vision, without replacing ownership or management. If your company faces a handover, a transaction or simply wants to grow without destroying value along the way, let's talk.

Javier de Rojas Roca de Togores

Partner - Maraz Corporate Finance

FAQs on how to design a strategic plan

How much does it cost to design a professional strategic plan?

It depends on size and complexity. A boutique plan for a middle-market family SME is billed as a fixed-fee project or via a retainer. But the useful question is another: how much is the company worth? A plan that avoids a badly closed deal, an expensive refinancing or a family war pays for its cost many times over. The plan is not an expense: it is an asset.

Can I do it internally or do I need an external advisor?

The diagnosis and the lines are usually well led by the management team. But the financial model, the scenario analysis, the role of the CFO as a growth engine and objectivity against the founder's biases benefit greatly from an external advisor. Especially if the plan has to convince third parties.

How long should the plan cover?

Between 3 and 5 years, with annual review. Less than 3 years is a budget. More than 5 is speculation on headed paper.

How does the strategic plan relate to the annual budget?

The budget is the twelve-month translation of the plan's first year. They must be connected. If your budget contradicts your strategy, someone is not doing their job. It is usually the one who paid it least attention.

Does the same plan work if tomorrow I want to sell to a fund?

To a large extent, yes. A bankable plan already contains the projections, assumptions and scenarios a fund will require. In fact, it is what allows you to defend the valuation and demonstrate the value-creation potential. A rigorous plan can add several points to the multiple. A weak one takes them away.

How do we ensure the plan is executed and does not end up in a drawer?

With governance. A quarterly strategy committee, KPIs with a single owner, a rolling forecast comparing actual against forecast, and - crucially - a board that asks questions. What is reviewed gets executed. What is not reviewed ends up as a sad PDF on Google Drive.

How is the conflict between dividend distribution and growth resolved?

With the Sustainable Growth Rate equation (SGR = b × ROE). A neutral fractional CFO translates the emotional debate into three quantifiable options: reduce the payout to finance growth with reserves; maintain the payout by increasing leverage to a sustainable level (typically NFD/EBITDA below 3.0x); or accept lower growth. Presenting concrete simulations of each scenario - with an impact on valuation, ROIC and financial risk - is the most effective way to redirect shareholder tensions that, framed as “I want my dividend”, tend to block the plan's execution.

How often should it be reviewed?

Light quarterly review (KPIs). Annual review of the budget and key assumptions. Deep review every 3-5 years or upon any disruptive event. A plan from seven years ago left unreviewed is not a plan: it is archaeology.