Business plans are not static things that, once completed, need no adjustment. Instead, they are living documents that evolve along with a company. Daily, weekly, or monthly, a business plan should be updated whenever things change. A business plan that is constantly updated takes the chaos of general everyday changes and transforms it into order. This habit sets up objectives, strategy, and necessary steps to take by encouraging constant awareness.
At least once yearly, a business plan should receive a thorough update. Feel free to start with the old plan and make revisions as long as you are also looking at things with fresh eyes. Look not at the trees, but at the forest. Do so by talking to both current and potential customers. Consider what they are buying, what problems are being solved, and what other solutions can be chosen. Then consider new market segmentations. Group by size of buyer company rather than by region, for example, or by type of product rather than by channel.
Accounting and financial analysis generally work by the month; the books do, after all, close after each month. Ensure a monthly review of the differences extant between those results that are planned and the actual results for profits, sales, cash, and balance. Also important is to review deadlines, activities, and planned results which do not fall into the financial area. Good plans are filled with measurable milestones and tasks.
Inherent Paradox and Management
There is an inherent paradox in the process of business planning. Strategy works when applied consistently over long periods; this means that strategy cannot be implemented without a long-term plan. Alongside this, however, is the fact that blindly following long-term plans can kill a company when it stubbornly follows plans that are not working. Management is the resolution of this paradox. Judgment is required. Beware false assumptions and review the planning process.
Remember Milestones for Revisions
Some special circumstances crop up when business plan updates are also called for. Fundraising or refinancing is one of these times. Launching a new service or product is another such time. An update is called for when launching new services or products as well as when expanding into new markets.