Update Your Business Plan: Key Tool for Navigating the Changing Market

Has your business experienced changes or shifts in the market, trends, etc.?  Have you changed or expanded your products, services, or service area?  If so, it’s time to update your business plan!

For small and mid-sized businesses in particular, having a business plan can be a crucial tool for navigating uncertainties, fostering growth, attracting resources, and ensuring a clear direction for sustainable success. Updating a business plan is essential to ensure that it remains relevant, adaptable, and aligned with the changing dynamics of the business environment.

Here are a few scenarios when it’s advised that your business updates its business plan: 

• Changes in Business Environment: Significant shifts in the market, industry trends, regulations, or technology can warrant a business plan update.
• Achieving a Milestone & Goals: When major milestones or goals are achieved or when the business significantly deviates from the initial plan, it's a good time to reassess and update the business plan to reflect new objectives and strategies.
• New Opportunities or Threats: Identifying new opportunities or recognizing potential threats that weren't considered in the original plan may prompt the need for an update. Adapting to exploit new opportunities or mitigate threats is crucial for business success.
• Changes in Leadership or Management: Changes in leadership, management, or key personnel can bring about shifts in the company's direction or strategies, warranting an update to ensure everyone is aligned.
• Financial Changes: A major financial change such as securing funding, changes in revenue streams, unexpected expenses, or shifts in profitability may require a reassessment of financial projections and strategies.
• Expansion or Diversification: If the business plans to expand into new markets, introduce new products/services, or diversify its offerings, updating the business plan is crucial to reflect these changes and develop appropriate strategies.
• External Factors: External factors like economic downturns, changes in customer behavior, or geopolitical events might impact the business. It's essential to revise the plan accordingly to adapt to these changes.
• Periodic Reviews: Conducting regular reviews of the business plan, such as quarterly or annually, is a good practice. This allows for adjustments based on performance metrics, market feedback, and new insights gained over time.

Engage In Your Business Planning 

Many business owners don’t update their business plans because of a lack of time, flexibility, lack of follow-up or execution, and accountability. According to research by the University of Oregon, businesses that plan, grow 30% quicker than those that do not. This study indicated that while many firms can succeed in the short term without a plan, those with a plan grew quicker, and overall, were more successful.

What are the benefits of updating your business plan?

A business plan helps outline the vision, mission, and objectives of the business. It provides a roadmap for where the company is headed and what it aims to achieve, allowing everyone involved to align their efforts toward common goals.

It helps in defining the strategies and tactics necessary to achieve the business goals. Which includes your sales planning, marketing strategies, operational plans, financial projections, and more. In some cases, you might identify that you don’t have the expertise to complete the strategy in-house and hire a consultant. 

A plan can assist in determining resource requirements, whether it's human resources, marketing software, financial needs, sales tools, or other assets. It can help you to manage resources efficiently and effectively. So, you can maximize your profitability! 

The business plan serves as a communication tool, ensuring that all team members understand the business's direction, sales goals, and marketing strategies. This alignment helps in fostering a cohesive and focused team effort. For example, how will sales and marketing align to retain your existing customers? 

When faced with critical decisions or changes, referring back to the business plan can provide insights and guidance. It helps in making informed decisions that are in line with the overall business objectives.

A business plan provides a benchmark against which the company's performance can be measured. Regularly revisiting and updating the plan allows for tracking progress and making necessary adjustments to stay on course.

Conclusion

Far too often, I have discussions with business owners or marketing executives who do not have answers to questions, normally found in a business plan.  For us, having insight into the business direction allows us to engage and integrate into the business strategy to add value.  As a business owner myself, I want my business partners to provide their expertise to collaborate on the strategy, planning, execution, and measuring to grow.  It’s also important when identifying shifts in the market or trends because our partner can see the impact at scale. 

So, what are you waiting for? Put it on your calendar and block off the time to update your business plan.  Don’t have a business plan.