Your business plan should be alive. It should inform your strategic goals and bottom-line revenue. Unfortunately, most small business owners fail to update their policies. When this happens, business owners miss out on several benefits. This article will help you understand why a periodic update to your small business plan will help your company forge ahead.
When to Update Your Business Plan
The good news is that updating a plan is a lot easier than creating one from scratch. You may find that it’s the right time to update your plan for a variety of reasons. For example:
- You might need financing to fuel business growth. Most lenders require an updated business plan as part of this process.
- Your company decides to launch a new service line or product. This usually signals a significant shift in business, which can warrant revisiting your business plan.
- The company has hit a significant milestone, whether it’s a financial goal or perhaps a move to a larger office.
- The old plan is simply out of date and doesn’t reflect the realities of the current business model.
Significant market shifts can signal changes in your target audience. The tastes of clients can change, companies can merge, or new competitors can come into the market. These are all indicators that it might be time to revisit your business plan.
Benefits of Updating Your Business Plan
The goal of a business plan update is to allow you some time to reflect on some of the core assumptions and goals that got you here. Don’t make this a mechanical exercise in plugging in the numbers. This is a time to ask:
- Do profit margins and pricing need adjusting?
- Is your sales strategy working?
- Have you achieved your original company goals?
- How will your growth facilitate improvements to your product or even the work environment for your employees?
- Do you have the right people in the right seats at the company?
- Are your recruiting efforts paying off?
The business plan update should include updates to the financial section of the document that will reflect your current balance sheets. The exercise of updating this section should facilitate some thought on how to make your business more profitable by cutting expenses or increasing sales.
Updating your business plan gives you time to reflect on ways to improve your business. Far too often, small business owners get tied up in daily operations and fail to take the time to strategize how the model for success has shifted. A well-honed business plan comes from several iterations; it should be a living document that serves you every day. The benefits of updating your policy can help you make better decisions related to why you’re in business in the first place. It can help you overcome market challenges, give you new ideas for improvement, and maybe even increase your bottom line. This is precisely why successfully established companies go back to revisit their business plan periodically.
Are You Reviewing Your Business Plan Every Year?
Small business owners should take time each year to review the business plan. It may even be a document to share with your staff to engage them in the success of the company. Either way, the plan must stay up-to-date and current with what’s happening in your business today. Schedule a demo with Exelare to see if their software can help you!