Two very simple questions: When was the last time you updated your company’s business plan? When was the last time you and your team even looked at it? If you answered these questions honestly, it may be time to haul out that plan and put your strategic thinking cap on.There are a number of reasons why it’s important to frequently review and update your business plan:
The economy and the world have likely changed since the last draft of your plan
Your business plan should adjust to, and be reflective of, the current economic, political and cultural environment. From changes in the economy (good or bad), to changes in Presidents (Democrat or Republican), to changes in societal values and norms – your business plan should be modified to reflect new goals and strategies. By reviewing and updating your business plan every six months (or less), you force yourself to consider how changes in your region, your country and the world may affect your business.Your business may have changed
Businesses are in a constant state of change. One product line is replaced with another. Target markets expand or contract to include new potential customers. Competition emerges and former foes disappear. The economics of your company may be altered as the cost of doing business changes or the availability of talent shifts. Does your written plan reflect the new dynamics of your business? Do your financial projections capture the updated reality of operating your company? The process of revising your business plan allows you to spend quality time contemplating these issues and developing adequate solutions for the future.Check the continuing relevance of your business model
Certainly one of the most important ongoing functions of management is to determine how their organization makes money. Striving for record sales month-by-month can be exciting, but it may also be time to start considering how your business model should evolve to ensure continued growth beyond this year. Proper business planning enables you to frequently reflect on your business model and make adjustments when necessary.Potential readers of your business plan may have changed since the last draft
Over time, companies change management, staff, customers, bankers, investors, strategic partners and other constituents. To ensure your stakeholders are all on the same page, it’s important to share updated business plans that reflect the reality of your organization today.Is management on the same page?
Chances are the business plan in the head of the CEO is different from the plan in the head of the Director of Marketing. The point is that the “unwritten business plans” tucked away somewhere in the heads of each of your team members may vary widely, and will probably diverge significantly from the last business plan that was actually committed to paper. If this is the case for your organization, it’s time for clarity among the team members. It’s time to prepare an updated business plan that everyone contributes to and agrees with.The rules of raising capital have changed
The business plan you present to lenders or investors should always take into account recent changes that have occurred within the capital markets. If the goal in preparing your business plan is to attract money then it should be sensitive to the current issues, trends and expectations of capital sources.I hope this article has motivated you to pencil in some time on your desk calendar (or more likely one of your several digital devices) to update your business plan. If not, BizPlanIt’s team of business plan consultants and writers are here to help. Good luck!