L&A SPEAKS

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If you are reading this article, you probably already know that having a business plan is critical to the success of your business.  You also already have some form of a business plan documented.  You also probably are already in business using your business plan document.  And you probably are familiar with this well-known phrase 

                           “If you fail to plan, you are planning to fail” – Benjamin Franklin   

Quick question for you then: when was the last time you’ve looked at your business plan document?  It’s interesting and fun for a business owner to look back at your first business plan, almost like old photos, and reflect on whether those initial plans are working out so far.  Now that you have worked within your business you likely know so much more than you did when you were starting out.  More than being interesting and fun, looking back at the initial business plan is beneficial!    

Next question for you: do you think of your business plan as a living document that you should continue to revisit over time?  Experts say, ‘Yes, doing a business plan refresh comes with a lot of benefits’.  While doing a refresh you get to understand what is working and not working; you get to correct some of your initial assumptions; you get to know the change the direction of the business and incorporate real numbers from your current work.  Most of all it helps you prepare for expansion, you can create an improved plan with a clear course of action for YOUR business 2.0, or 3.0, and beyond! 

                                 So, when is the right time to review and refresh your plans?  

Obviously definitely when the business takes unexpected turns or is underperforming with the financials.  But even if things are going great or fairly well this exercise should be considered.  Experts have different responses to this question however they generally recommend that business owners do a thorough update on their business plan at least once annually.  Additionally, they recommend monthly reviews of the difference between the actual results you achieved over the course of the month and the planned results you had hoped to achieve.   

Monthly updates need not be as comprehensive as your annual update; the major purpose being to see how you are doing with achieving your objectives and to make any necessary adjustments going forward during the rest of the year.    

The industry in which a business operates is also a key consideration.  If the industry is in the plateau or decline stage, the company may then need to change its operational structure entirely or compete in another industry as it may never do well in a declining industry despite a business plan refresh.  

Key aspects of the business plan document that should be specifically revisited include:  the Vision and Mission of the business, Products and Services, Sales and Marketing plan, Organizational Plan and Summary of Personnel, Financing Requirements and Financial Plan.   More on this:

• Since a business in plan is critical to the success of your business, a good place to start your review is the Vision and Mission of the business. Is the business fulfilling its mission? Sometimes the factors and assumptions upon which the business was built may have changed overtime making it hard for you to achieve the set mission or run with the original vision.   

• The second area to review is your Sales and Marketing Plan. Have the preferences and buying behavior of your customers changed over time? Where do consumers now spend most of their time and what is the best way to reach and engage with them?   Consumers are always on the lookout for services (especially on social media) that will fulfil their needs in the most efficient and inexpensive manner.   

• Regarding Organizational Plan and Summary of Personnel it is important to note that not every business owner has a detailed business plan written down but may have a set of ‘unwritten’ rules, procedures and structures (usually controlled by instinct and business acumen) that guide the day -to-day operations of the business.  These are rules that should get written down during the refresh and get included these ongoing reviews because they actually guide the business.   

• The last and most important part (amongst all other parts) to review is Funding sources and Financials.  Have you met your financial goals? Is the business profitable enough to meet all its cost (fixed and variable)? Do you require funds to expand if you have attained a solid sales track record? Your financial projection also needs to be updated to include new assumptions that may have arisen as a result change in the economic situation; projections may therefore be more or less optimistic depending on the current economic situation.   

           Increase your level of confidence in your business with a business plan refresh.  

These need not be time consuming, perhaps you may choose to only revisit one or two sections in each refresh.  You may also choose to present your current plan to an expert and allow them to help you will the review and revised documentation.  Incorporating this iterative business planning mindset will greatly increase your business’ chances for great success!