Update Your Business Plan to Renew Your Drive and Focus
While some research has found that companies with completed business plans are twice as likely to grow their business, busy entrepreneurs might be reluctant to dig in and revise theirs when circumstances change.
A business plan is a vital document for your company, even if you work alone or have no plans to show it to outsiders. Articulating and writing down your business goals can help your company succeed. It gives you and the rest of your staff something to strive for and refer to during challenging times and helps ensure everyone is on the same page and working toward the same vision.
Here's how updating each section of a business plan can help you reinvigorate your business and renew your focus:
1. Company description.
Figuring out your company's unique selling point is essential when updating the company description. Here you essentially create your elevator pitch, succinctly defining what the company is, what it does and why.
If you always have trouble explaining your business to random people you meet, revising this section will ensure that you will always know what to say. You be able to give someone either a quick, 30-second rundown or dive deeper into whom help and how.
When updating a previously drafted business plan, you may be reminded of what your goals were when you first launched the firm. You may realize that you're still working toward them, or that your industry has shifted, leaving you with new objectives to strive for.
2. Market analysis.
Has it been a while since you've done a survey of your industry and competitors? If so, then updating the market-analysis section will prompt you to do so again. This section is especially helpful for entrepreneurs who may not have had the best previous year. It can help them re-evaluate their industry, target market and pricing.
Take a look at peers in your industry. See what they're doing well and look for where the market holds opportunity. No business exists in a vacuum, so gain a clear idea of what other companies are providing and what this means for yours. The competitive landscape is constantly changing, so relevant data is essential.
3. Organization and management.
For solopreneurs, refreshing the organization and management section of the business plan involves describing yourself. As the owner, detail your responsibilities. Think about your educational background and the skills that help your business succeed and any industry recognition received.
For business owners with partners and managers, revising this section means evaluating each person's role in the organization. Define how each person (whether an owner, leader or manager) helps shape the success of the company.
4. Products and services.
Enhancing the product or service line section is vital as this captures the essence of what your company is all about. Describe your products or services from your customers' perspectives. Outline the needs fulfilled by your products or services and how they stand out from competitors'.
Revising this section can help those who struggle with their pitches formally identify key selling points to close deals.
5. Marketing and sales strategies.
Update often the marketing and sales section, especially the online strategies area. Refreshing this section will let you evaluate current strategies and explore new ones.
Your marketing strategies for last year might not be as effective this year, since search and social-media algorithms are constantly evolving. Make use of valuable data like search engine and website-traffic analytics, ad and social-media performance, sales trends and customer-acquisition sources. Compare recent results to previous years' and look for trends. This helps identify what's working and allows you to best budget resources.
Take a look at offline strategies as well. Your outbound-sales team may need to learn more inbound-sales strategies. You may be ready to invest in a larger public-relations strategy to tap into new audiences in your target market.
If you find that your strategies need revising, identify what should be changed and why. Then add new strategies to at least test to your plan.
Outlining your financial status, projections and historical data will illuminate ways to improve cash flow. Newly updating the financial section can also help you determine if you need to seek financial advice. That's nothing to be ashamed of. Seventy-three percent of small business owners require occasional financial advice and support to keep their business going strong, according to one estimate.
Even if you don’t need advice and company finances are strong, knowing your business assets, debts and cash flow is crucial for planning the budget and allocating resources.
7. Executive summary.
The last section to revise is the executive summary, which serves as the opener of the entire business plan. This describes where your business is now, where you see it going and what will make it successful. Plus, it includes a summary of all the previously mentioned sections.
By the time you work on this part, you should have a renewed excitement for your business and a better idea of what you're working toward.
Have you written or updated your business plan recently? What tips do you have to offer?