We’ve all been there. You spent weeks – maybe months – poring over your plans plotting where you’d be in one, two, five years’ time… only to chuck it in a drawer and forget all about it. But, when used to keep you focussed on your goals and aware of changes in the market, a clear, up-to-date plan can be a key weapon in your entrepreneurial arsenal.
Interviewed by the Sacramento Business Journal, three experts gave their views on when to update your business plan:
“Over 80% of plans are created as a marketing piece to obtain money, not as a plan for growing the business. If the purpose of your plan was to get money, then you don’t need to update it until you need more money. If your plan is a working plan for building your business, then you are probably already updating it on an on-going basis. However, it is usually a good idea to revisit your overall strategies and update tactics either quarterly or annually, depending on how fast your business is growing.”
— Jim Hunter, Coach, Consultant and Trainer at Foursight Consulting
“A business plan is a dynamic document and is your playbook for success. Like any good coach, you should review and update the plan based on the business environment both within and without. (If there are ) changes in macroeconomic conditions, competitive landscape, or introduction of a new product or service or location, a thorough review and update is warranted.”
— Venki Venkataraman, Business Counsellor at SCORE Sacramento
“The primary reason an owner writes a business plan is to help them focus on the future of their company. Their plan should be update annually, focusing on new market trends, pricing changes, industry profit margins, growth or expansion potential, new product offerings, and change in staffing requirements. Updating the business plan doesn’t require a full-blown plan to be written; only focus on the areas necessary to enhance growth and expansion.
The secondary purpose is to secure funding from a financial institution, venture capitalist, angel investor or family and friends. This plan requires in-depth research (and) two or three years of financial projections, i.e. sales forecast, income statement, cash-flow analysis, balance sheet, break-even analysis, and ratios. The reader of the plan wants the writer to be concise, clear about the direction the company is headed, the purpose of the loan.… And the most critical aspect is to show how the loan will be repaid.”
— Panda Morgan, Director of the Northeastern California Small Business Development Centre, Greater Sacramento/Sierra