If you’re an entrepreneur, you’re probably a workaholic too. They do seem to go together in the hard-driving worlds of business creation, growth, and development. You’re probably working every day to bring your dreams to fruition and develop a viable business that meets your needs. Is it what you planned when you started out? What has changed since then? If only you knew then what you know now.
But it’s not too late. As a matter of fact, it’s never too late to review your plan, your environment, and your course of action. It might be going well, but it is wise to revisit and revise your business plan regularly to keep your business on its best course and trajectory.
Then and Now
Once upon a time, maybe quite a while ago, you carefully organized your ideas and struck out as an entrepreneur. You put your ideas together and developed a business plan. It elucidated your goals, put your dreams into black and white, and finalized a thesis of your proposed undertaking. Your business plan proudly articulated your business idea, marketing plans, sales plans, and competitive analysis. Hours of reflection produced strengths and weaknesses along with the planned outcome. All this was backed by financial assumptions and methods to support and validate the vision of the business – of your business. You may have even created scenarios of all the possible outcomes you could imagine and how you would steer yourself through them. Seemingly, you covered all the bases.
Now, your business plan has been put into action, but has it remained unchanged? It is highly unlikely that the operation is doing exactly what you thought it was going to do. It’s equally unlikely that all the assumptions you made—from competition to the marketplace to the legal landscape—turned out as you originally projected. As the “float plan” for your entrepreneurial journey, the plan must change and update too.
Marketplaces, by definition, are fluid. Things always change, and business, like a sailboat, cannot sail solely in a linear direction. We tack and shift our direction based on the winds and the currents we encounter. And a business plan must remain a viable plan for your current situation. After all, if it was good enough in the first place, it is good enough to revisit. If it was important then, it is more important now that you have real capital invested and quite a bit more on the line.
Questions to Answer
Without a plan, we lose control of where we are going and how to get there—it’s like driving on the freeway with limited visibility and no dashboard. A review answers three key questions: Where am I? What has changed? What should I do about it?
Where am I?
This question forces you to compare where you are with the process laid out in your initial plan. If you are like most business owners, the business is your most important activity. Every day and night, it occupies your mind and takes your time. Your strong involvement drives it forward every day, but that also might be hurting you. When we become entrenched in day-to-day focus and operations, it becomes the only thing we see, and we lose objectivity. Keeping your head down and working obscures your business vision; reviewing your current status requires observation with a high-level approach and some detachment from daily operations.
We must see the whole forest, not only the day-to-day trees that block our vision. Imagine a solar-panel construction company that is experiencing double-digit growth year-over-year due to favorable tax legislation and consumer interest in green initiatives. It can be so focused on growth and meeting high demand that it doesn’t recognize unfavorable customer or vendor concentrations or the risk of changes in the legal landscape. By working in the business, instead of on the business, the organization has a lot of risks, is inefficient, and, in an industry with small margins, it is growing itself into danger. With a review of the current status, ask questions about where you are, and review the processes and direction so that you don’t get lost.
What has changed?
A business plan review requires an evaluation of data collected to see what has changed from the initial plan. This is about the ongoing market and competitive analysis. To compete, you need to be aware of changes and make intelligent, data-driven choices.
For example, a luxury transportation provider replaces a stretch limo that had been a good investment because it’s getting old and the daily operation “needs” a new one. But safety regulations shift, and demand for luxury extravagance is waning. Laws change, the economy fluctuates, and alternative providers enter the market. This poor limo company is now stuck with an asset that is not earning. Reviewing the business plan forces an evaluation of industry data that determines the next best move.
What should I do about it?
An update of your last business plan forces you to use the information to adjust your vision and correct your course. It leads to best practices in your operation too. If you don’t rewrite your plan and goals, you run the risk of becoming stuck doing what you’ve always done. What got you here will not get you where you are going next, and a review helps refine the vision for everyone in the company.
With a clear and thoughtful review of the plan, you will utilize a variety of strategies to ensure the proper course going forward. It will direct an annual strategic plan that incorporates better operating plans and budgets. With more data and expertise, an organization may adopt rolling forecasts or 13-week cash-flow projections that foster quarterly plan reviews. It might be time to adopt software like Ultimate Business Planner for improved financial models.
The range of these resources develops more skills that are helpful when preparing for market changes–all to create better results. We must see when a course change is necessary as soon as possible. The Titanic, after all, would have avoided disaster had it made a single-degree course correction earlier in the voyage. A more overarching review of plan, process, and destination would have changed history for the better. You will do the same thing for yourself when you revisit and revise your plan.