Your finished business plan is a moving target.
That means it’s going to need to be updated. More than once.
In fact, when my clients ask me how often I recommend updating their business plan, my answer never changes.
Your finished business plan needs to be updated on an ongoing basis. It should be constantly evolving and growing to adequately represent and project your business, to keep things on track.
Through the years, I’ve come across a common misconception that entrepreneurs think a business plan is completed after the big investor pitch and once some funding is secured. After all, beyond funding, why would you want to keep it updated?
Why Keeping Your Finished Business Plan Updated is Vital
A business plan does indeed serve a long-term purpose — a very useful one. In fact, all the big, successful businesses make updating their business plan a priority. They block out regular time on the calendar and take it seriously; going over changes meticulously and making adjustments as needed.
Let’s take a look at what a business plan’s purpose is, and why it is vital to the health of your company to update it regularly.
It’s a long-term strategy. No matter what stage of the business life cycle you’re in, your business plan serves as a useful tool to evaluate, plan, and grow.
It’s a full-scale view of your business. You need to regularly take a step back and look at the big picture, to view the forest after staring so long at the trees. A business plan helps you do just that.
It’s a measurable performance scale. Anyone and everyone in any position are evaluated based on past performance. It’s no different with your business. Your business plan enables you to look a year down the road to see if you are where you planned to be.
Refining Your SMART Goals
When creating your initial business plan, there are three areas where I recommend you have SMART (specific, measurable, attainable, relevant and time-bound) goals: the market research section, the financials section, and the launch schedule section.
As your business plans evolve, so should your goals for each area. What you were first looking to achieve at the time you had a finished business plan may have changed, or you may have done more market research or your financial picture may no longer be the same. All of these things warrant spending some time updating the goals in your plan.
For market research, your goals should include actions or steps related to the data you gathered. If you’ve already been testing out the market with your products or services, the new data you’ve gathered may impact your existing goals.
For financials, the goals for your revenue or costs may have shifted or already have been achieved. Perhaps you’ve found a new revenue stream, or the costs of production have changed since the plan was finished.
Finally, look at your launch goals. We all know that the road to launch is never quite as smooth as we picture, so your timeline may be impacted. What was feasible six or twelve months ago for your launch may be completely different now, and your plan needs to reflect that.
If you’re having trouble brainstorming on which (if any) SMART goals you may need to change, don’t be afraid to ask for help. A neutral third party can often see things that we don’t, so finding someone who can support you through the process of updating your finished business plan may save you valuable time and provide important insight.
How to Know When to Make Updates
During any period of fast growth, it’s a good idea to evaluate how well you’re able to keep up with demand. Avoid missing deadlines, decreasing quality and becoming overwhelmed by adjusting your plan to accommodate fast growth when it happens.
Checking to see if your finished business plan needs to be updated quarterly is a good rule of thumb.
Any plan, by definition, can only come so close to accuracy. It’s important to test core assumptions that were initially made, and see how they hold up to reality. Make continual changes and adjustments as you go along, and your business plan will be ready to go any time you need it.
If you get into trouble or need support, reach out and our team would be glad to help.
I am proud to be a member of the Forbes Business Development Council.