Finally, after a lot of effort, you wrote a business plan. But the journey doesn’t end here!
A business plan is a living document—you need to work on it continuously to keep it relevant and up-to-date according to the market situations.
Your plan should evolve along with your business. This ensures it remains a valuable tool for decision-making. Regular updates can help you adapt to new opportunities, overcome challenges, and maintain a clear path toward your goals.
Let’s explore the hows, whens, and whats of updating a business plan.
Why should you keep updating your business plan?
The first question that arises is why a business plan update is necessary. Is it not possible to have a plan that remains relevant for a longer duration?
Moreover, some might wonder if updating a detailed business plan halfway could have a negative impact. All of these questions may cross your mind when managing a small business.
There are several benefits of updating a business plan, some of them are:
1. Keeping up with the demands of the customer base
The first and most obvious reason is to keep up with the needs of your customers. A business’s one of the key drivers is an increased demand. When you create what people want, it naturally leads to more consumption.
Many businesses make the blunder of never altering products that worked once. However, in the case of businesses, demands change constantly – whether one likes it or not!
For instance, Blackberry phones were considered the go-to phones for professionals in one era, and now they are just nostalgia. So, going with the trends and changing your plan accordingly becomes necessary to stay significant in the industry.
2. Accommodating and expanding market requirements
There are prominent benefits of updating your business with a market expansion strategy. What does this mean?
With ever-increasing products and services in every domain, expanding your product to a new market can help you increase your sales.
For example, a company serving coffee beans to the urban market could expand its reach by offering instant coffee to consumers who don’t have specialized equipment for coffee beans.
3. Keeping up with the competitors
To succeed, businesses need to keep up with their competitors. It means updating your plans and strategies after analyzing your competitors to make your brand stand out.
It includes updating your marketing strategies, pricing models, product offerings, and more to stay relevant for your customers.
4. Tracking your progress
Updating your plan allows you to compare your projections with actual results. It helps you to understand in which areas you are performing well and which needs better performance. It’s like checking the map to make sure your small business is still heading in the right direction.
How to update your business plan?
The next thing to talk about is what exactly is to update. Is it the strategy that needs a change? Or do the actual technical aspects of the business need to be updated? The answer to that is – both. Some constant checks need to be kept on integral aspects. Let’s move ahead and see the steps for updating a business plan:
1. Review the mission and vision statement
The mission and vision statement of the plan defines the purpose, values, and long-term goals of the business. Therefore, it is necessary to review and update them first.
Check if are they still pertinent to your long-term goals. Think about any changes in your business world or new ideas that might make you need to update these statements to keep them current and motivating.
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2. Conduct industry and market analysis
Research about recent trends & developments going on in the industry. Also, check for any regulatory shifts or changes in consumer behavior.
If there are any changes, then update the sections to reflect current trends and insights that might affect your business strategy.
For instance, let’s say you are running a tech startup. And in your market research, you explored current trends like AI and eco-friendly tech. After knowing the current trends, you might make any changes in your business strategy.
3. Reassess your business strategies
Based on the market and industry analysis, revisit your strategies and determine if all the strategies & business objectives are still up-to-date with the analysis.
Revise your strategy according to the current situation and make sure that your goals are achievable through the new strategies.
For example, you are running a bakery business, and after market analysis, you got to know people are preferring more gluten-free items. So, now you reassess your strategy and include more dishes on your menu that are gluten-free.
4. Update your financial projections
See your current financial situation and match it with financial plan projections to know the difference. Now, update your forecasts (cash flow, profit & loss, & balance sheet statements) to reflect your current financial situation and performance.
Adjust the new forecasts in a way that reflects new assumptions, strategies, and initiatives that have emerged from your reassessment.
At last, review the overall business plan thoroughly and make necessary changes where needed in the whole business plan. This way you should make your planning process continuous and smooth.
When to update your business plan?
For a successful business, you need to update your plan yearly or whenever there are any internal or external changes. Some of the situations when you need to alter your plan are:
- It’s been a year since you last reviewed your business plan
- You’re adding any new products or services
- Your direct competitors are changing
- There is a change in the market demand
- If there is any financial change
- For internal changes (supply chain issues, management change, etc)
- If you are applying for funding
Thus, for any significant changes, you need to update your plan and accommodate it as per the current situation.
Update and transform your plan with AI
So, without a doubt, keeping a business plan up-to-date is necessary for your business. But, doing it regularly need a lot more effort.
An AI business plan creator—Upmetrics provides you with AI features that save time. Its AI assistant can automatically write and improve sections of your business plan, and answer all your business-related queries.
Apart from all that, it is efficient and affordable. The plans start from only $7 a month which is great when you want to continuously update your business plan.
