How Often Should You Review and Update Your Business Plan?

Your business seems to be doing great until you check out your quarterly forecast. Your sales are down by a huge margin. It might be time for you to review your plan.

You see, your business plan isn’t meant to be written and tossed in a drawer somewhere. You’ve got to constantly review it if you want your company to go anywhere.

Creating a business plan that works takes a ton of trial and error. This is especially true for young businesses. All it takes is a small change to turn everything on its head.

We can help you learn how to account for these changes. Check out this guide to learn when to update your business plan and find out how to make all the edits you need.

What Is a Business Plan?

Before we talk about how to edit your business plan, let’s discuss what it is. Your plan is your roadmap of sorts. It’s a detailed account of your goals and objectives.

Having one is a great way to keep yourself on track with your company. That’s why every new business owner needs to have one.

Once you finish writing it, do yourself a favor and place it somewhere you can find it. As you move forward, you’ll need to make edits to your plan. In fact, you should do this every quarter or so.

How to Create a Business Plan

Do you not quite have a business plan together yet? We can tell you how to build one from the ground up. Follow along with these pointers.

Choose Your Business Plan Format

The first step to a good business plan is choosing your format. You’ve got two choices here. You can go with a traditional plan or a lean startup plan.

Traditional plans are extremely detailed. They go over every single aspect of your business from start to finish. As you can imagine, they take some time to write.

The good news is that this is the plan that most financial lenders ask for, so you won’t have to provide any extra information down the line.

Lean startup plans only go over the key points of your business. If you sit down and get your mind to it, you can most likely write it within a day or two. If you present it to a financial lender, however, there’s a good chance that you’ll get turned down for a loan unless you can provide some extra information.

Executive Summary

There are six main components to any good business plan. The first one is your executive summary. Think about this as an introduction to your company.

You’re telling the reader what you do and how you do it. We recommend keeping this to one to two pages. You want to go into detail but still leave enough open to keep your investors on their toes.

This is going to sound strange because the executive summary is the first thing that people read but write it last. The more you understand about your company, the easier this section will be to write.

Opportunity

What is your product or service? How are you going to help your target audience? These are the questions that this section will answer.

This is where you’ll identify your target audience as well. Some business owners create a hypothetical shopper here to help them better understand who they’re selling to.

Before you finish up the section, take a minute to identify your competition. By understanding what your competitors are doing, it can help you come up with your own strategies.

Execution

In the execution phase of the business plan, you’ll take everything you jotted down in your opportunity section and figure out how you’re going to sell it to people. It’s time to begin all your marketing research and come up with a sales plan.

You’ll also set up your milestones and think about what success means to you.

Company and Management Summary

You can have the best company plan in the world, but if you don’t have the right staff members to help you carry things out, it’s not going to do much good.

This is what this section is for. You’ll determine what kinds of positions you need to fill. Decide what skills a new hire will need to complete the tasks required of them as well.

Financial Plan

Most people can’t pull money out of their pocket to finance their own business. They have to go to a lender to try and get a loan. Deciding on where you’re getting your cash is only one part of filling out this section.

You also need to create a financial forecast. That might sound daunting, but it’s only a projection of how much you plan to sell over a few years.

You should also have a section that includes how you plan to pay your employees and an income statement section. This is where all your finances come together to show you if you’re ahead or behind.

Appendix

The appendix section isn’t necessary, but it’s helpful. This is where you’ll put any additional notes and leftover critical information involving your company.

Many business owners draw up rough sketches of their products and stick them in this section too.

Why Make Updates?

Running a business can be unpredictable. All it takes is a single change to throw your entire growth strategy into chaos. When this happens, you may need to make some revisions to the business plan that you created.

Keep up With Customer Demand

As time moves on, so does customer demand. Something that was hot yesterday might be a dud today. The reason why many business owners fail is that they refuse to change up their strategy to meet this change.

These people may fall behind a competitor that sells the same product that they do, but at a reduced price to account for the fluctuation.

Account for Market Requirements

As a business owner, you should never put all your eggs in a single basket. You can make so much more money if you expand your resources to keep up with market requirements.

For example, let’s say that your company makes dog toys. Just because you specialize in chews, doesn’t mean that you only have to stick with that.

You can make collars, leashes, or beds. There’s a ton of products that man’s best friend needs to be happy and healthy. The only way you’ll be able to make the most out of this opportunity is to keep your business plan updated.

Staying Ahead of Your Competitors

The thing about business is that it can be a little cut-throat. There are a million and one other companies that offer the same products and services that you have.

You could introduce an amazing concept only for another business owner to snatch it up and put their own little spin on it. As you can see, it’s not hard for you to fall behind.

Stay ahead of your competitors by updating your business plan every now and again. This will allow you to analyze your competition and come up with a strategy to stand out from them.

Keeping up With Technological Updates

When a new phone model comes out, people rush to buy it. The technology is better than the previous model, which means that it runs a lot more smoothly.

Take this concept and apply it to your business. Nobody wants to buy a product that uses outdated tech. It doesn’t matter how well-functioning it is.

So as technology evolves, you want to come up with strategies that will allow you to implement it somehow. This is especially true if your product involves software in any way. You’ll have to roll out regular updates to make the software run better and iron out any bugs.

If you allow yourself to fall behind in the times, it won’t be long before your competition overlaps you.

You Need More Financing

There comes a time in every business owner’s life where financial setbacks occur. During this time, it might be possible for you to get additional financing, but you’re going to have to go back to the lender.

They may be willing to work with you, but they’re going to want to see a revised version of your business plan. They need to know that their investment is going to pay off in the end.

You’re Taking Over for Another Manager

Let’s say that you didn’t start the business in this situation. You’re taking over for a previous manager. Everyone runs things a little differently.

A business plan that was working for them might not work for you, and that’s okay. You can and should sit down and take a moment to update the original plan.

How to Update Your Plan

So, now that you know why you might need to revise your plan, it’s time to talk about how to go about it. These business plan tips should walk you through the process.

Take a Look at Your Strengths and Weaknesses

When you’re decluttering a house, you go through everything and sort it into keep, throw away, and donate boxes. Revising your business plan sort of works the same way.

You’ve got to take a moment to access your strengths and weaknesses. Things that aren’t working for your company will get erased from the plan. Things that are working can stay for now.

Get Customer Feedback

Your customers are your most reliable source of information. You’re trying to cater your goods and services to them, so you might as well take their opinion into account.

The best way to go about this is through surveys. Many customers will be more than happy to provide feedback, especially if you’re willing to give them an incentive to do so.

People love free stuff! Offer them deals on your product for completing a survey. You’ll get valuable data that you can use to revise your business plan, and they save money. It’s a win-win situation.

Review Your Sales Forecast

Before you make any huge lasting changes to your business plan, it’s a good idea to review your sales forecast. This is a fancy term for something that shows you how your investments will pay off.

If you make big sweeping changes without consulting it, things may backfire on you in a huge way.

Talk to Your Team

If your business is failing enough for you to revise your plan, it might be a good idea to get feedback from your staff. They may be struggling to perform their tasks because there are not enough of them.

It’s possible that you could need more supervisors on duty at a given time to keep the other employees in check. You might need to revisit your training strategy. All of these things cost money that you’ll need to budget for when you’re editing your business plan.

Review Your Competition

Again, it will be easy for your competition to overtake you if you fail to keep up with them. Identify who your competitors are and find out what they’re doing to impact the field that you’re in.

What are you doing in response? Do you need to come up with a strategy to make yourself stand out?

The next thing you should do is run an analysis of any up-and-coming competitors that may pose a problem. This will help you get a jump on them.

Creating a Business Plan That Will Help You Get Ahead

Creating a business plan is daunting to many company owners, but it doesn’t have to be hard. As long as you come up with a solid strategy and follow it, your business should be able to stay ahead.

There will come a time when you may need to revise your strategy a little. The smallest changes can have devastating results on your company if you aren’t prepared.

Are you looking for more business tactics that will help you stay ahead of the game? Check out our blog daily for all the latest tips and tricks.