Is it time to update your business plan? » SMEInsider

Is it time to update your business plan?

First on the agenda for most people starting a new company is to spend weeks, maybe even months, poring over a business plan and plotting where they’ll be in a year, or two, or five. Then they throw it in a drawer and forget all about it.

While no one outside of (apparently) a bank expects you to accurately predict  how things will pan out in the future, there are obvious benefits to putting your plan into some kind of physical form. Often it’s not until you write something down that all the different strands and ideas and half-formed plans come together into some kind of coherent structure and you can start to see how you’re going to get there.

Equally, a rigid roadmap that you’re scared to deviate from will quickly become an albatross around your neck. You can only really learn by doing, and once you’re six months or a year into your venture, many more things will have (hopefully) become clear that will change your perspective and your plans.

Here are five key pieces of advice to consider when you craft and update your plan:

1. See your business plan a living document

The values and overarching goals that inspired the original document should be kept intact, but everything else is subject to question. Revisiting it regularly to remind yourself why you’ve gone down this path and refine your course is a great way to keep yourself grounded in the first few years of start-up chaos.

2. Make sure it’s not just PR

Many businesses make the mistake of just seeing their business plan as a tool to source funding, and the result is a huge tome of passionless clichés and external evidence used to persuade an outsider that your business is viable. You’ll find it much more helpful to write a plan that genuinely reflects on and responds to your business’ weaknesses and changes in the market, working out how to adapt and do things better and establishing “best practice” approaches as they emerge. This kind of transparency can actually be a big selling point for many investors, but if you’re worried, consider having two versions for internal and external use.

3. Ban jargon

Whether you expect your plan to be read internally, externally, or both, don’t muddy the water with jargon. Write in clear, accessible language that lays out as straightforwardly as you can what you are trying to do, why, how you think you’re going to get there, what you still need to know and what might change your approach. Making your plan overcomplicated or impenetrable will only put you off revisiting it, rendering it largely useless. Write the kind of manual for yourself that you actually want to read, use and edit when you need to

4. Respond to changes in the market

When something major happens in your industry, sector or economic climate – or when a popular new idea or product is launched – don’t just ignore it until it starts to impact on you. Think about how it might intersect with your business and your plan. Make notes about how this could be a good thing, or draft a simple contingency plan. This doesn’t have to be a dissertation, it’s just a case of making a few annotations on your business plan to make sure you’re not burying your head in the sand if things change.

5. Be honest with yourself

We say this a lot, but it bears repeating: technology is changing so fast that the way you do business needs to be reviewed regularly – every six months or year at the bare minimum. It doesn’t matter how groundbreaking an idea seemed when you started out, or how impressive that graph looks, you have to be prepared to scrap something and go back to the drawing board if it’s not working. Updating your business plan is a great way to pull your head out of the sand and remind yourself of the pace of change.

 

Next article: Nine business behemoths who failed at first