9 Signs it’s Time to Update Your Business Plan
Is your business plan due a facelift? Maybe it’s been a while since you last looked at your plan or maybe your business has been going through significant changes recently.
No matter your situation, a business plan is a living document that needs constant attention and updates to accurately communicate the state of your business to a range of stakeholders.
How do you know it’s time for a change? Here are the most common signs that it’s time to revamp your business plan.
New products or services
The products and services you sell to make money are a vital part of your business plan. Any plans to change or develop these will impact how you manage your resources as well as your profitability.
Every time a change like this happens, it’s time to rethink your plan. Consider consulting your board or investors for their input and advice on how best to tweak your business plan to account for these changes.
Staying on top of what others are doing is key to maintaining your own competitive edge. Consult your business plan every time a major rival changes course or an emerging player enters the industry. Your business should be prepared to battle new and stronger competitors that are increasingly targeting your own customers for their growth. As the saying goes, if you don’t take care of your customers, someone else will.
Changing needs of the customer
Over time, the needs and wants of your business’s target customer may shift. Your business plan should anticipate and keep track of these changes and clearly explain how the product will move with the customer or how your new core market will be found and retained.
New suppliers or technologies
Changes to your supply chain might be necessary over time, both to cut costs as well as to be more environmentally friendly. For example, switching to a new tech platform may increase the efficiency and competitiveness of your business. Investors will want to know about these changes, so they’re useful to include in your business plan.
Adapting to new markets or market conditions
As your business expands into new territories and across borders, how you coordinate your time and resources will change dramatically. Changing tastes, attitudes, and trends among customers as well as different regulatory climates can serve as signals to update your business plan.
If your business is attempting to expand into and navigate new markets, an updated business plan can help you set appropriate goals, communicate them effectively to your team, and determine the best course of action to achieve your objectives.
Changes to internal operations
Whenever your business goes through major internal changes, such as a hiring new management or experiencing rapid growth, your business plan should be updated to reflect these changes and the expected impact on your operations.
Changes to financial situation and cash flow
If the financial situation of your business changes so that you are considering refinancing or fundraising, your business plan should include the most up-to-date costs and opportunities that you’re due to face.
A cash flow forecast is integral to your business plan as it will inform the stakeholders of the cash that is expected to come in and out of the business during a given time period. You can make a cash flow forecast yourself with a template or use add ons for your accounting software like Float.
A business without an accurate cash flow forecast will be unable to safely make spending decisions.
A new financial period is starting
Taking the time to update a business plan is not usually first on the to-do list when a company enters a new financial period. However, you can choose to set a specific time to update your business plan, whether that’s annually, quarterly, or even monthly, depending on the rate at which your industry changes. Determining when to change your business plan in advance will ensure you consistently set aside the time to make these valuable changes and keep your stakeholders in the loop.
Your current business plan is inaccurate or outdated
Maybe your plan was poorly written the first time around or maybe things have been changing faster than expected. If your business plan doesn’t represent the current situation of your business anymore, it’s high time for a revamp.