Updating your business plan template
Remember, your business plan template is merely a tool to help you build a better business, and shouldn’t be thought of as a homework assignment. Good business plans are continually evolving. They should be living documents that you return to on a regular basis and update as you learn more about your ideal client, what marketing tactics work (and those that don’t), and what you got right and wrong about your budget and forecast. Your plan should set out the goals you’d like to achieve within your business, and you should use it to track your progress and adjust course as you go. It is merely a roadmap designed to point the way to your current destination, knowing that where you end up may not be your ultimate end point.
Like real life, things are constantly changing in a thriving business. Market fluctuations, new competitors, changes in staffing, or your sales figures may nudge you in a direction you wouldn’t have previously dreamed of, requiring new goals and strategies to achieve them.
A change in plans may also require refinancing – another important reason to keep your business plan up to date. These tips will help you revise your plan with the minimum of fuss, so you’re best positioned to stay on course and impress a potential lender when applying for funding.
Schedule adequate time
The first time that you completed your initial business plan template, it probably took quite a bit of time, – to do the initial research, data organization, goal setting and number. An update should be a lot less time consuming, but you’ll still need to set aside adequate time in your schedule to review your company mission and goals, analyze new data, consult with your accountant and decide on the most profitable strategy moving forward.
It’s recommended that you review and update your business plan at least once a year. In fact at Crunchers, Edinburgh Accountants we suggest reviewing it quarterly. While many business owners update their business plans at theyear end, it may make more sense to time your update when you are looking at your annual budgets, to take advantage of the latest financial data available.
Do your homework
Before you sit down to revise your plan, spend a few hours reviewing the latest market research as well as your own business metrics. Once you do this, then brainstorm ideas, set your business goals and make your decisions on how to achieve them.
Specifically look at any untapped opportunities your business can look into as you review:
- Key market trends you can take advantage of with a new product or service;
- Gaps in what your competitors are offering that your company can fill;
- New technologies that can move your business forward by improving efficiency or productivity, giving you a potential competitive advantage; and
- Which marketing and sales processes that yield the best results.
Know your numbers
Want to save time as you update your business plan? Schedule a meeting with your accountant to discuss your company’s current financial health and what you can do to maximize profits going forward. After all, your financial data is only as useful as your ability to analyze it and act it appropriately. Accountants are trained to look at the facts and give you a clear-eyed, objective view of actual results – something many business owners aren’t naturally skilled at. At times a business owner can be so wrapped up in the doing element of the business, that they may miss something obvious. It is helpful getting your accountant to give a second opinion on the numbers and opportunities, and to ensure that everything stacks up as expected.
As you prepare to update your business plan, take note: the most compelling piece to a lender, investor is the Executive Summary. It normally comes first in your business plan and is ideally only one to two pages in length. Most people write it last, though. The key is to draft the Executive Summary only after you’ve completed the other sections of your business plan. That way you’ll have all the information you need to describe your company’s mission, direction and goals for success. For more useful tips on how to write an Executive Summary, take a look at this helpful post from Entrepreneur.com.
Crunchers – Accountants Edinburgh
© Photo Credit Robert Nunnally