Planning is the key to a successful business. Some entrepreneurs look at a business plan as a guide needed only to receive funding to launch the start-up. Once the business is launched, all too often the business plan ends up collecting dust. It is important to remember a business plan is a fluid document. It is not just for new companies. If it is kept updated, a business plan can be a valuable tool for charting the course of your business.
Here are some ways that revisiting the business plan can help as you grow your business:
- Monitor performance. It enables you to determine if you are meeting key targets. By comparing your actual performance against your forecasted results and targets, you can keep your business focused on meeting objectives.
- Keep you on track. A second pass at your plan helps you revisit all the elements and decide whether you’re on track or proceeding in a totally different direction.
- Identify risks. Even if things are going as expected, your understanding of the risks improves with experience. Revisiting the plan gives you the chance to find out where the business landmines are, compared to where you thought they would be. Most business risks can be predicted in advance, and keeping your plan’s risk analysis current keeps you on your toes and nullifies problems before they happen.
- Identify potential problems. Revisit those forecasts. Are you deviating from your expectations? If so, you can act now rather than being blindsided by a sudden cash crunch.
- Identify new competitors. New businesses may have entered the market since you completed your business plan. To account for unexpected newcomer success, it is wise to do a competitor analysis regularly and adjust your strategy accordingly.
- Train employees. A current plan can also be a good training tool. You can give copies to new employees to help them understand the company’s goals and what expectations you have regarding its growth.
- Attract new funds. The good news is that it is easier to fund growth in an existing business than it is to fund a start-up. Using your plan as a strategic tool to demonstrate financial growth is important to secure investment in your company. Updating your business plan will show potential lenders that the expansion will be a profitable one for your bottom line.
Revisiting your business plan forces you to step back from the day-to-day operations of your business and make sure that your vision still makes sense. Did your target market materialize? Did you anticipate the effects of your competitors? Only by revisiting your business plan can you see if you are on track or if changes are needed. You’ll never know that the business is proceeding differently than anticipated without a plan to compare it to. With a regular business planning cycle, you’ll get the most from your business plan and turn it into a strategic document that helps you successfully run your business for years to come.