Almost all entrepreneurs should keep in mind the importance of a business plan review and also consider updating the strategies and tactics section of their business plan to meet constantly changing market realities.
Creating your business plan may have been a pain, but updating a plan is easier because you already have a framework. During your business launch, you probably had little experience, and many of your marketing and operational forecasts were just educated guesses. Now that you have some experience and a proven track record, you know what works and what doesn’t.
Recognizing the important events and changes that may require you to update your tactics is an important skill to acquire. Here are some pointers on how to recognize those times.
You are ready to take your business to the next level. Getting funds from a bank or investors requires a more sophisticated plan. Even if you don’t need additional funding, a business plan based on a certain size of business might not be adequate to support a much larger one, which may need additional employees, square footage, etc.
Uncle Sam throws you a curveball, in other words, regulatory changes impact your business. One potential change in many states is the imposition of a sales tax on all internet purchases. The result could be a leveling of the playing field that will make online and brick-and-mortar stores more competitive with each other.
The economy has changed inflation, recession, unemployment rates, all impact your customers’ ability to buy your product or service. This will impact your revenues in a bad way, and depending on your staffing, adjustments may be needed there as well.
Here are some stages that how often should a Business Plan be reviewed
The high-level overview
How often: daily The high-level overview is the section I look at most often. It’s my big picture part of the plan. Here’s what it includes:
- What I’m doing – the problems I’m solving
- Why I’m doing it – my vision
- Who I’m doing it for – their problems, need, and wants
- My tagline – so I’m always focused on my business mission
- My sales and marketing strategy – the sales and marketing activities to focus on
- Finances – a summary of major income and costs
Your business plan review is just that – a surface-level overview.
The projects in progress
How Often Should I Review My Business Plan: daily and weekly This part of my business plan gets looked at daily, especially when I’m creating things in my business or working on a specific task.
Sometimes I’ll leave it for a few days while I’m focused on client work and routine tasks. But whenever I’ve got projects on the go, which is pretty much always, I check in with this part of my business plan.
I find it really useful to refer to whenever I need to make a decision. For example, I might be thinking about registering a new domain name for my website (buying URLs is fun, right?). But I can look at my plan and ask myself, “Do I really need this?”.
Then I’ll use my template to write a paragraph about the item and how it fits into my business. If I can’t think of what to write, I don’t have a good enough reason for what it would mean to the business and how it fits into the bigger picture. Then I don’t buy it.
I’ve got the same rule for software programs and it stops me from spending all my money on Xero Add Ons! Because there are few things I love more than looking at all the latest software and seeing what I can implement to make my business (and my clients’ businesses) more efficient. But I know that it’s not efficient to add too many tools to the mix, especially if I’m not really going to have the time or patience to use them.
The financial forecast
How often: Monthly I work on my financials and forecast at least every week or once a month. This was an area of real struggle for me.
That was a big shock to me and I never would’ve picked up on that fact if I hadn’t reviewed my finances and thought about how I could do things differently. Once I started to implement some different processes, and actually reviewed the numbers every week, I brought my finances under control.
You’ve really got to practice and discipline yourself. That’s why it’s gotta happen regularly.
How often: Quarterly This is the section of my business plan that I look at the least often. Benchmarks display data about similar companies to help you compare your business with what’s considered normal for your market.
It’s a useful way to look at projections and add credibility to your plan, but it’s always important to remember that there’s no business out there exactly like yours.
So your benchmarks are only useful to a certain point. I only look at benchmarks when I do quarterly plans and reviews. It’s interesting to see how I’ve gone over the previous quarter and it’s a useful planning tool for the future. But it’s not something you need to get stuck into every day or even every month.
Your business plan is a living document
A business plan is a perfect foundation for your business. Think about the foundation of the home you live in. You wouldn’t just wake up one day and decide to take out that foundation! And you certainly wouldn’t engage a builder who didn’t believe in foundations.
It’s there, underpinning everything you do in your home, adding strength and security. It’s the same with your business plan. You put it in place, and then you build your business on top of it… and it’s there every single day, holding your business firmly together.
Challenge… are you living inside your business plan?
I want to know… do you look at your business plan every day like I do?
Maybe you’ve got a business plan (and it’s not working for you), you’re halfway through one. Maybe you’ve never started one or you’re a bit skeptical and you don’t even know if you actually need one.
I want to challenge you to be your best in your business, and step out and start achieving your goals. A lot of the time, the first step is writing out your business plan. The next step is making sure you review it regularly.
Why put your business plan into writing instead of just keeping it in your head
Writing down your business plan will make it more powerful and real. But let’s get more specific. Here are 6 reasons why you should write a business plan:
- Keep it real. Once you see things in black and white in writing, they’re much more tangible. Your written business plan can work as a reality check where things aren’t going as well as you thought they were.
- Spot gaps. When you write it down, you can see the gaps and holes that you hadn’t thought of.
- Be accountable and collaborate. Having it written down allows you to show it to others and be accountable.
- Create SMART goals. A written plan can be broken down into steps and scheduled into your calendar. This makes it far more likely that you’ll achieve it.
- Measure your progress. When your plans are written down, you can review them and see your progress. This is especially useful if you’re a type-A personality like me.
- Free up your brain cells. Having your plan written down actually (and literally) frees up your headspace so you can use your mental energy for other more important things.
- Preparing for the future. And let’s not forget the importance of preparing for the future. Keeping your business in your head is not a good business practice for so many reasons.