Having an up-to-date small business plan can play a key role in generating maximum revenue for your small business. How often should you update your plan? The answer to this question is, all the time.
A business plan update can help define and refine major goals for yourself and your team. Your plan should provide a means by which to evaluate and correct your small business performance and ensure all stakeholders are aiming at the same goals and objectives. The business plan update process has the ability to sharpen and improve you the entrepreneur, your business as a whole, and generate ideas to raise start-up or expansion capital. Click here to view a free business plan sample.
The Monthly Business Plan Update
Accounting and financial analysis normally works in months since the books close after every month. Make sure you have a monthly review of the difference between planned results and actual results for your sales, profits, balances, and cash.
- For each of the standard business projections, always maintain a table with the plan, another with actual results, and a third with the difference between plan and actual, which is called variance.
- As an annual plan carries through the months, you can use the table reserved for actual results to include changes in budget that affect the near future. For example, if the annual plan starts in January, then by the end of May you have an actual Sales Forecast that includes actual results for January through May and the latest revised forecast for June through December.
- You must also review the activities, deadlines and planned results that don’t fall into the financials. A good plan is full of milestones, assumptions and tasks, all of which should be measurable. Make sure you review and update these measured results every month.
The Annual Business Plan Update
Update your plan thoroughly at least once a year. You can start with an old plan and revise, but make sure you’re taking a fresh look. Ideally, you should distance yourself from the current situation and look at the bigger picture.
- Talk to your customers and potential customers. Review your value proposition. What are your customers buying? What problems do you solve? What other solutions can they choose?
- Try to come up with new market segmentation. Segmentation is the grouping or divisions you see in the market. For example, if you normally view your market by type of product, look at it by channel or buyer. If you divide by region, divide by size of buyer company. Think up a new segmentation to give you a fresh view.
- Look at the larger potential market for the problems that need solutions. Look at neighboring businesses. Look at changing trends and technologies.
Indeed, a formal, continuously-updated business plan is an important external as well as internal document. Take advantage of its many benefits and let the plan take your company in the direction that you want to go. BizCentral USA is a one-stop small business services center helping entrepreneurs, start-ups, and established small businesses start or grow with over 30 expert services and proven solutions.