Is Your Business Plan Current
May 19, 2010
Last week, I was talking with a friend of mine about a new business idea he’s incubating. I offered to help him get started with an outline for a business plan, and now he’s off and running. It got me thinking about my own business plan and how long it’s been since I looked it over and/or updated it.
According to the experts, you should give it a good overhaul at least annually, if not every 6 months. This update should include things like talking to your clients/customers to understand if your products are still meeting their needs. You can also ask how you might improve your offering to add more value. You can also look at your company from a different perspective.
I read an article written by Tim Berry a few years ago where he recommended reassessing your market segmentation. If you currently have a product focus, maybe shift to a client focus or a channel focus, or maybe even geographical. The idea is to get a little distance from your current perspective such that you might bring new focus and different ideas to mind for implementation in your business model. In this process, re-evaluate who your competition is, what they are doing, and if you are current in terms of technology and popular business trends. If your plan doesn’t address SEO, for example, it’s probably time to dust it off.
Beyond the annual update, though, your business plan should be a living document. There are certain components that you will want to update more often. Consider updating the financial statements and your forecast at least quarterly. Because cash is the lifeblood of your business, you should keep your cash flow forecast front of mind at all times. Whether your business is expanding or contracting, or even if it’s business as usual but with a rent increase pending, you need to know how much runway you’ve got.
As I page through my own plan, though, it becomes clear to me that I’m actually making constant adjustments to it in my head. Each day, I jot down new ideas on scraps of paper throughout the house (not a method I recommend). As I exercise in the morning, I formulate my plan for the day. In the evening, I review my results and make small mental adjustments to the plan for tomorrow.
Applying the discipline to make these changes to your plan will help you clarify your goals and strengthen your plan to achieve them. So please join me – take a look at your business plan and evaluate the track you’re on.