Things constantly change – this is one crucial component that entrepreneurs should realise. Flexibility and adaptability are qualities that business owners should embrace for their venture to thrive, especially in a rapidly changing world. This principle is also true when it comes to your business plan.
A business plan gives you control over your business, provides you with direction and helps you overcome potential hurdles. You have to keep in mind that a business plan is not something you set in stone. Think of your business plan as a living document; it evolves as your company grows.
You’re probably asking, “When should I update my business plan”? And we would say as often as you can. Whether quarterly, bi-monthly or even monthly, updating your plan should be a priority when things change in your business.
Here are signs that your business plan needs an update to give you a better idea.
1. You have unclear business goals
If someone were to ask you at this exact moment what goals you have for your business in the next quarter of this year, would you be able to give a clear answer? Hitting your plans will be difficult if you are unclear about them.
As you may have guessed, a well-devised business plan is the first step to setting these goals.
2. You are going to offer new products/services
Another clear sign that it’s time to update your business plan is when you’re going to introduce new products or services. These changes will impact your resources and your company’s profitability, so it’s vital that you tweak your business plan to account for these updates.
3. You want to remain competitive
Knowing what other players in the industry are doing is one way to maintain your company’s competitive advantage. It’s best to constantly review your business plan and make any changes if you see emerging players or significant changes in the industry.
4. You want to keep up with your clients’ needs
Whether you like it or not, the needs and wants of your target customers will change. Checking your business plan and making sure it’s updated will help you anticipate and be ready for the evolving needs of your customers. Your business plan should show how your current offerings will move or change as your customer’s demands shift.
5. You want to identify areas for improvement
A business plan should show you if there are gaps or any weaknesses in your company that prevent you from accomplishing the goals you want to achieve. Your current business plan should allow you to focus on what areas need improvement to direct the company on the path to success.
6. You want to secure funding
Need additional capital to keep the business afloat or for its growth? Investors and banks will require you to have a solid plan in place. An updated business plan gives you a better chance of securing the money you need to expand or keep the company running.
7. You want to be ready for the new financial year
Revising your business plan is an item that should be on top of your to-do list when a new financial year is on the horizon. Although you can constantly update your business plan monthly, quarterly, or as often as you want, a new financial year is perfect for reviewing your current plan and making appropriate changes.
A business plan is a framework that maps out the strategies for your company. An accurate and updated plan will give you loads of benefits, such as remaining competitive, delivering customers’ needs, and also helping you overcome challenging times.
If you think your business plan does not represent your company’s current situation, it’s time that you update it. If you need a business mentor or the expertise of a Virtual CFO, you can always reach out to us at Cloud CFO.