Do you have a business plan? Do you keep it up to date? A business plan is a strategy for a business that highlights its goals and how it will achieve them. A well-written business plan is the foundation for the success of a business.
Boost business adviser Gill Nolan explains the importance of a well-written business plan and highlights the reasons why it is important to keep it up to date.
A well-written business plan is crucial for both startups and established companies for several reasons:
- Attracting investors and lenders: A business plan is essential for winning over potential lenders and investors. It provides a clear roadmap for the company's goals and how it intends to achieve them, which is crucial for securing financial support.
- Staying on track and setting goals: For established businesses, a well-conceived business plan is useful for staying on track and not losing sight of their goals. It helps in thinking through ideas before investing too much money and highlights potential obstacles to success.
- Gaining objective feedback: Companies can share their business plans with trusted outsiders to get objective feedback, which can be valuable for refining the business strategy.
- Financial planning and projections: A business plan outlines the company's financial goals and explains its path to making money and growing revenue. It also involves predicting and planning the business finances, which is crucial for demonstrating the viability of the business to potential investors.
- Guiding decision making: Business plans help entrepreneurs and small business owners see the bigger picture, plan ahead, make important decisions, and improve the overall likelihood of success. It provides a roadmap for the business and helps in guiding decision-making processes.
How often to update a business plan
Business plans should be updated periodically to ensure they remain relevant and aligned with the company's goals and market conditions. Here's a summary of the recommendations from the search results:
- Annual update: This comprehensive update should include a review of the value proposition, new market segmentations, and the larger potential market for the products or services offered.
- Monthly review: In addition to the annual update, a monthly review is suggested. This involves comparing the actual results achieved over the month with the planned results, allowing for regular adjustments and realignment with goals.
- Regular review: It's advisable to schedule regular periods for reviewing and updating the business plan. This could involve minor reviews quarterly and a major review at least once per year to ensure that the plan reflects any changes and remains up to date. The consequences of not updating a business plan can have significant impacts on the company's performance and ability to adapt to changing circumstances
- Missed opportunities: Failing to update the business plan can result in missed opportunities for growth and improvement. Changes in the market, customer preferences, or technology may go unnoticed, leading to missed opportunities for innovation and expansion.
- Inaccurate financial projections: Outdated business plans may lead to inaccurate financial projections, which can affect the company's ability to secure funding or make informed financial decisions. This can result in financial instability and missed investment opportunities.
- Loss of competitiveness: Without updates, a business plan may fail to address new competitors, changing market dynamics, or shifts in consumer behaviour. This can lead to a loss of competitiveness and market share.
- Ineffective decision-making: An outdated business plan can hinder effective decision-making. It may not reflect the current realities of the business, leading to decisions based on obsolete information and potentially detrimental outcomes.
About the author
Gill Nolan has spent over 15 years in business support and has a solid foundation working on North West programmes from managing grant funds, funding and offering mentoring as well as advising on business support and knows the region very well.
Gill formerly achieved success in banking where she specialised in corporate business lending and business development as well as managing teams. She has a strong track record in sales, marketing and growth and understands the challenges that businesses experience.
As part of Boost's Business Advice Service, Gill provides helpful guidance to trading businesses in Lancashire that are ready to take the next steps for a successful, thriving business.
If you’re looking to grow, scale or start your business, use Boost; Lancashire’s Business Growth Hub. We offer a range of funded business support services. Call our Business Support Helpdesk on 0800 488 0057 to find out more or complete our enquiry form.
