How Often Should You Update Your Business Plan?
Updating your business plan regularly will help you stay on track to reach your business goals. Read more about updating your business plan here.
Just as you can’t predict the future, neither can your business plan. Life changes on a constant basis, and so too should your business plan. Setting your goals in concrete is a sure-fire way to be left behind in the competitive business space. While this seems like an overwhelming concept, it’s one that is manageable when understood correctly. Here’s our guide to when, how and why you should be updating your business plan.
This frequency may sound absurd, but every great entrepreneur is constantly thinking of how to improve their business. This is less a practical suggestion, and more so a mindset. What drives most business growth is innovation, and that won’t occur without a desire to innovate.
Whether you’re eating breakfast, walking the dog or at the gym, setting aside time to consider what may take our business to the next level is important. Likewise, establishing such a mindset allows for a greater understanding of those around you making similar suggestions.
Too often does a business stagnate because of a lack of desire to develop the business plan halts. Recognising, particularly new businesses, that everyone within the business generally wants it to succeed is integral to these developments. Evaluating how to innovate on a constant basis helps build the cognitive basis for this innovation.
Assessing business growth on a weekly basis is a common practice nowadays. Given how fast the modern business world moves, it is important to provide a regular assessment of how your business is progressing, and whether your business plan is remaining effective for your goals. Though, don’t worry about getting bogged down in micromanaging your forecasts or expectations on this basis.
Moreso, this is an individual exercise much like the daily assessment. Understanding how seven days can influence the relevance of your business plan will allow better assessments when it comes to monthly or annual reviews.
Consider what the goal of that week was and how, or whether, your business achieved it.
Perhaps it was a small thing like changing the workspace to create a more collaborative environment. Maybe it was a new layout for your store to entice certain purchasing habits for that week’s specials. Whatever it is, these small reflections can have positive impacts on understanding the supplementary components to your business plan.
Here is where you should be looking at your financials and evaluating expectations, forecasts and deadlines. While it may sound obvious to some, as the year moves along it is always important to evaluate how your business plan needs to change to adapt to unforeseen changes. A sales forecast is merely a forecast, and so as it is failed, met or surpassed your business plan should be updated accordingly. Updating your business plan to account for financial developments will avoid issues of over or underfunding, excess inventory, etc. This is a practical component rather than entrepreneurial and is a necessary practice within any successful business.
This is particularly important within the early stages of your business’s development. With a smaller scale and timeline, the impact of business plan changes has a greater effect on success than when compared to longstanding businesses. They may make or break your business.
Furthermore, sitting down with all of your team to consider these changes and set expectations also allow for cohesiveness. Ensuring that everyone is on the same page allows the team to be orientated towards the same goal. Likewise, it allows for collaboration. You can’t be everywhere within the business all the time, and hearing feedback from all levels will allow you to better adjust your business plan to react to industry changes or opportunities you were previously unaware of. The key here is it to listen to your team.
Here is where you can make the largest changes. Reflecting on the year that was can allow for a complete assessment of your business plan and what is and isn’t working. You can do this more regularly, say every 6-months, but the key idea here is that you need to actively seek out where you can improve.
Setting a deadline for yourself is an important part here. If you want an annual reassessment, think ahead. Where can you expand the business? Is there a new market you can try to enter? Is there a certain segment that is unexpectedly responding to something you’re doing? Re-orientating your business in this regard is a daunting prospect, but there’s no reward without risk.
Furthermore, here is a good chance to reflect on company policy, values and guidelines. A strong company ethos is crucial to strong internal performance. Updating and innovating on these, and considering how you can provide an optimal environment for your employees may lead to revelations of how you can improve your output. Whether it be by creating or expanding departments, or even ways to strengthen team morale, this is an area of your business plan that is often overlooked and shouldn’t be undervalued.
Hence, this is also why this revaluation is best left for greater intervals. Providing yourself with enough time to perform proper market research and strategy development will give any business plan updates the best chance of success.
Overall the important takeaway from this, hopefully, is that more than anything, complacency, more than anything, breeds failure. In a time where a new phone each year is commonplace, and fast fashion is everything, ensuring your business isn’t a hot-flash trend is crucial to long-term success. That being said, it’s important to understand when it is appropriate. Don’t force business plan changes for the sake of it, they need to have a purpose. Ultimately, evaluating your business plan at different levels allows you to better recognise when these are appropriate and stay on track for success.
Daniel is a Legal Tech Intern at Lawpath. He is currently studying a Bachelor of Laws/Bachelor of Business at the University of Technology Sydney. His principal fields of interest are in commercial, corporate and intellectual property law.