When to update your business plan

Your business plan is something that needs regular updating in general and should always be revisited as your business experience changes. — Getty Images/mapodile

Updating your business plan ensures that the information is current and in line with your organization’s changing goals. Here are eight situations where it is necessary to update your business plan.

It’s been over a year since you updated it

Your business plan is never finished – you should constantly review and update it. How often you update it is up to you, but it’s a good idea to schedule regular times to review and update your plan.

For example, you can perform a minor review every quarter and then perform a major review at least once a year. This will give you the opportunity to see what has changed and if there are any outdated items.

You have added new products or services

Your company’s products and services are an integral part of your business plan. Therefore, when they change, your business plan must also change. This is because adding new products or services affects your sales projections and the way you manage company resources.

[Read more: How to Communicate a Product Discontinuation to Customers]

The competition is changing

Paying attention to what your competitors are doing can help you determine when it’s time to change your own business strategy. For example, let’s say a competitor has copied your product or service or undercuts you. You should take the time to evaluate their strategy and decide if you want to do something about it.

[Read more: 6 Steps to Market Your Business in a Competitive Market]

The market is changing

Whenever there are changes in the market, you should adjust your business plan accordingly. For example, businesses that relied on in-store traffic to make sales had to make adjustments during COVID.

Current issues such as inflation or fears of a recession can affect a customer’s ability to purchase your product or service. Any factor that could negatively affect your income warrants revising your business plan.

When you started your business, you may have been alone with one or two other employees. If your business has grown significantly since then, it’s time to review your business plan.

You have experienced a financial change

It’s a good idea to update your business plan whenever you encounter a significant financial change, whether good or bad. For example, landing a major client is a big deal to have. But serving that customer may require more time and resources than your team originally anticipated.

Likewise, if a long-time customer cancels a major contract, it will affect your future revenue. Each of these scenarios requires you to revisit your business plan and develop a new strategy.

You are going through internal changes

Internal changes may also require you to update your business plan. For example, suppose you are moving to a new technology platform to make your business more competitive. Or maybe you recently switched suppliers to deal with supply chain issues.

The loss of a key staff member can also be a blow to your business. Maybe this person had strong relationships with many of your customers, so you need to rethink how your business will operate without them.

[Read more: How to Talk to an Employee About Poor Performance]

Your business has grown significantly

When you started your business, you may have been alone with one or two other employees. If your business has grown significantly since then, it’s time to review your business plan.

And when updating your business plan, it’s a good idea to involve several key employees. Getting your employees on board helps ensure successful implementation.

You are trying to get financing

You will need to provide a detailed business plan if you are trying to obtain financing from a bank or an investor. When an investor reviews your business plan, they need to understand what your business does and your future financial projections.

Your business plan should include:

  • An executive summary.
  • An explanation of your total available market.
  • A description of how you plan to use the funding.

It may sound complicated, but it’s not if you follow a free business plan template.

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Posted on July 28, 2022



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