A business plan is your road map to chart your business success. It’s an essential business tool and as such, the goal is to create a well-crafted one whose usefulness will not be limited to when you’re just starting your business. It can also be used to examine the progress of any enterprise, and based on such analysis you can then adjust, tweak, or change the path you have chosen.
Timothy Seña, a B2B supplier of agricultural materials, shares how he had crafted a business plan at the start of his venture in 2002, and used it to convince a local bank to loan him seed money. Everything went beautifully at first, but sales started to plummet on his third year in the midst of tough competition. A friend advised him to look at his original business plan. Skeptical at first, he took out the plan and was surprised at what he saw.
“I started reading through it, and I soon found out how much I had digressed from it. I compared my vision back then and the way I was running the business at the time, and I soon discovered what changes I had to make to get my business back on track,” he said.
When entrepreneurs write the plan at the start of a venture, obviously there will be assumptions and projections which are easily measurable over time. When you revisit your road map, you will discover which assumptions were right on the money, and which ones were not.
With the help of his wife, Seña slowly started changing some of his company policies to suit current market conditions. He realized that he had diversified too much too soon, and his business was suffering from a lack of identity. Now, he consults and updates his business plan every six months, just to see if his business is on track.
“It has become such a valuable resource for me, and I intend to continue adapting and tweaking it to help my business grow,” he said.
Advantages of revisiting your business plan
Certified Financial Planner Sharon Uy says people often start out methodically following steps they laid out in their business plan. After a while, though, they slowly start digressing because of real-world conditions like dealing with payroll, clients, employees, and cash flow, among others.
“Reality enters the picture, and the adjustments you make become contingent on the current situation you are in. This could be the reason why business owners often get lost and start faltering after a while. Re-evaluating your plan will help get you back on your way,” she said. According to Uy, some of the things you should look at include cash flow and tangible assets, products and marketing, and operations and management.