Why You Need to Update Your Business Plan
Your company’s business plan is a living document that can act as a guiding light. In addition to helping you strive for concrete goals, a business plan can help employees and investors alike quickly understand what your company is all about. Despite the importance of a good business plan, it’s easy to neglect this document once you’ve gotten your enterprise up and running. Here’s a look at a few reasons to invest time into updating your business plan.
Fundraising and financing
If you’re looking for investors or a loan, you can better your chances of funding with an up-to-date, accurate business plan. Entrepreneur staff writer Nina Zipkin explains that both lenders and investors have a vested interest in getting an accurate picture of your company. Get the most funding for your time and effort by presenting them with a current business plan that details the risks and opportunities that lie ahead for your brand.
You’ve added new products or services
Products and services are a core component of every company. In the time since you first drafted your business plan, it’s likely that your company has grown. Whether you’ve opened new locations, started an online branch of your company, expanded your product line, or revised your list of services, it’s worth mentioning in your updated business plan. Entrepreneur contributor Moe Kittaneh suggests explaining your products and services in terms of the problems they solve and the value they provide for customers. By showcasing your innovative goods and services, your updated business plan will help distinguish your company from the competition — and give potential lenders, investors, and employees a clearer picture of what your company has to offer, explains Kittaneh.
Stay competitive
Every business plan needs to account for factors like markets, demographics, and competition, according to Kittaneh. If it’s been a while since you’ve combed through this kind of data, you may be surprised by how much industry trends and consumer needs have changed — even in the span of a year or two. In addition to keeping your business plan relevant, doing the research to update your business plan could inspire you to pursue new opportunities or reveal niches in your industry. You may even find yourself revising old goals and creating new ones.
Ensure proper communication
As your company grows, you’ll need to take on new employees, hire additional managers, consult with advisors, and court potential investors. You’ll want newcomers to understand what your company has to offer, while also giving them a taste of your brand’s goals, values, and priorities, the staff of Entrepreneur explains. You don’t want anyone feeling cheated or confused when there’s a sizable gap between your business in practice and its plan on paper. To ensure that everyone coming on board is on the same page, be sure that you keep your business plan up to date.
For more input on updating your business plan, consider consulting with a financial advisor for advice tailored to your company.