Writing a solid business plan is important in the early stages of your business, but it’s equally important to regularly refine and update your plan to meet the current needs of your business and set new goals.
To ensure your business plan is up to date, follow this guide to refresh and refine your plan with each stage of your business:
Startup stage
One of the most important tasks of launching a new company is writing a business plan. While your first business plan should be well-researched and accurately depict how you anticipate your business will operate, it is never too early to change directions. Rather, it is best practice to update and refine your plan in the early stages of your organization to ensure a successful business venture.
Here are a few common reasons why startups and early-stage companies refresh their business plans:
- Your target audience has shifted. If your original target customer has shifted, you must reconsider how your business will meet their wants and needs. Formalize the new audience direction in your business plan and go through each section, adjusting as necessary.
- You’re seeking a new investor. If you are seeking an investor — or any outside funding — you will likely spend a significant amount of time in the early stages of your company meeting with potential business investors. If you are having trouble finding an investor, work with a colleague, mentor or industry professional to refine your business plan.
- A new competitor entered the market. According to Yahoo Small Business, approximately 543,000 new businesses are started each month, which means your company will likely find new competitors. If you believe a competitor will likely carve into your market, take a look at your business plan and find ways to differentiate yourself from everyone else.
- Your current goals need to be rethought. It’s common for new entrepreneurs to set aggressive and unachievable goals. As your business becomes more established, reevaluate your goals and create a roadmap to help you and your team reach them.
[Read: 5 Business Plan Templates to Help You Plan for Success]
If your products or services have significantly evolved from your early startup stage, make sure your business plan accounts for this evolution.
Growth mode
During your company’s growth mode, you should constantly evaluate and adjust your business plan. Depending on how quickly your business expands, you may need to update your plan on a monthly basis to account for new employees, markets or new products or services.
The following list provides some of the most common reasons why you may need to adjust your business plan during a period of rapid growth:
- You want to refinance your business. It’s not uncommon for businesses to seek refinancing after they enter growth mode and refresh their plan. When refinancing your business, pay particular attention to your financial sections to make sure all your data is accurate.
- Your products or services have changed. If your products or services have significantly evolved from your early startup stage, make sure your business plan accounts for this evolution.
- Your brand image has changed. Your branding should reflect your mission and values, and any adjustment to one element should be reflected in the other. If you decide to rebrand your business during your growth stage, make sure your business plan reflects any new changes to your mission and values.
Shake-out and maturity stages
As your business enters the shake-out phase — or when sales continue to increase but at a slower rate — and ultimately matures, reassess your business plan. During these stages, your business is likely to have reached market saturation, and you will need to seek new opportunities to expand or grow.
Refine your business plan when you encounter the following situations:
- You plan on entering a new market. When you decide to enter into a new market, you’ll need to add new information, or amendments, to every section of your business plan. Everything from your company description to your financial documents must include information pertaining to the new market.
- You adjust your supply chain. When you work with a new supplier, logistics company, etc., your supply chain is affected in some way. Your business plan should always include detailed information on your supply chain, which will, in turn, provide you with more accurate forecasts, timelines and other projections.
- You reset your pricing strategy. Any adjustment you make to your pricing strategy should include copious details in your business plan. For large businesses, a small price adjustment can equate to millions of dollars of revenue, so it’s important to have every detail from projections and estimations to market analyses and consumer data documented.
[Read: Smart Strategies for Presenting Your Business Plan]
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