Tips for updating your business plan
Posted on August 11, 2020
Think of your business plan as a roadmap designed to point the way to your current destination, knowing that where you land may not be your ultimate end point.
After all, things are constantly changing in a healthy, thriving business. Market fluctuations, new competitors, changes in staffing or your sales figures may nudge you in a direction you wouldn’t have previously dreamed of, requiring new goals and strategies to achieve them.
Of course, a change in plans may also require refinancing – another important reason to keep your business plan up to date. These tips will help you revise your plan painlessly, so you’re best positioned to stay on course and impress a potential lender when applying for funding.
Schedule adequate time
Most likely, it took several weeks – possibly even months – to do the initial research, data organization, goal setting and number crunching when you drafted your first business plan. An update will be a lot less time consuming, but you’ll still need to set aside adequate time in your schedule to review your company mission and goals, analyze new data, consult with your accountant and decide on the most profitable strategy moving forward.
It’s recommended that you review and update your business plan at least once a year. While many business owners update their business plans at year end, it may make more sense to time your update with your income tax cycle, to take advantage of the latest financial data available.
Do your homework
Before you sit down to revise your plan, spend a few hours reviewing the latest market research as well as your business metrics. This exercise will help you brainstorm ideas, set goals and make better decisions on how to achieve them.
Specifically look at any untapped opportunities your business can look into as you review:
- Key market trends you can take advantage of with a new product or service;
- Gaps in what your competitors are offering that your company can fill;
- New technologies that can move your business forward by improving efficiency or productivity; and
- Your marketing and sales processes that yield the best results.
Know your numbers
Want to save time as you update your business plan? Schedule a meeting with your accountant to discuss your company’s current financial health and what you can do to maximize profits going forward. After all, your financial data is only as useful as your ability to analyze it and act appropriately. Accountants are trained to look at the facts and give you a clear-eyed view of actual results – something many business owners aren’t naturally skilled at.
As you prepare to update your business plan, take note: the most compelling piece to a lender, investor or any other reader is the Executive Summary. The key is to draft the Executive Summary only after you’ve completed the other sections of your business plan. That way you’ll have all the information you need to succinctly describe your company’s mission, direction and goals for success. For more useful tips on how to write an Executive Summary, take a look at this helpful post from Entrepreneur.com.
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