By Steve Feld, Certified SCORE Mentor & Business Coach
Many of you put a lot of time and effort into creating a business plan for your new business and now it sits on a shelf or in a drawer collecting dust. Maybe you had an executive business plan that you used to entice potential investors, or a managerial business plan to pitch your business to investors, or the full operational business plan that is your true business blueprint and map to show you the way to achieve your business goals.
No matter which type of business plan you created, you should ALWAYS review it on an annual basis at a minimum. Publications such as Entrepreneur, Forbes, Inc. and many more recommend that you conduct a thorough update on your business plan at least once annually.
Many businesses review their annual business plan every month to make sure they are staying on the path they laid out for the business and to make the necessary adjustments along the way.
Apple has their business plans out to the mid-2020, but they update their plans every 90 days. This way they can be adaptable to the market trends, technology, consumer behavior, regulations, and much more.
Updating your business plan regularly can help ensure that you and your partners or co-owners are on the same page if there are multiple owners of your company.
When major changes occur at your company or in your industry, this is also a good time to update your business plan. Your plan needs to reflect the current situation and it needs to be relevant within the current business landscape that you are operating in. If something major has changed, it is essential that you make an update to your business plan to accommodate that shift.
Keeping your business plan updated is vital because no company can succeed unless it stays current with the times and unless it evolves.
The goals that you have for your organization will be different when you first get started than the goals you have once your organization is already underway. You want your plan to reflect the latest goals that you hope your company will accomplish so you have clear and measurable objectives to work towards.
Keeping your plans updated also...
- allows you to adjust to any changes in the law or market conditions that could affect profitability
- helps you to identify new competitors and new potential sources of business
- allows you to see how your company is progressing with enhancing profitability over time.
Business plans are living documents and need to be revisited every so often to ensure they are still relevant. In this way you can continue to use and benefit from the strategies and tactics.
You probably prepared the original business plan yourself, since you were likely the only employee. If you have now grown and added staff, try to involve them so there is buy-in. That way, when it is time to implement the plan, your staff will be on-board, and the activities will go smoother.
To recap on why you should review and update your business plan at least one time every year:
- External and events can trigger the need to update your business plan (consumer trends, competition, regulations, suppliers, market, etc.).
- Internal events have changed (employee growth, new products, systems/processes, etc.). You are not the same company that you were a year ago.
- Updating your business plan is more focused and fun than the writing the original one.
- Involve staff in the updating process-watch how this helps your business.
- It is never too late to create a business plan-start now if you haven’t already.