Major changes in internal situation.

The other major change which can affect your business plan is an Internal Change.

The most obvious major changes are changes in ownership, which are frequently the result of changing partnerships, divorces, deaths, and investment. The company takes on new partners, or sells out to a larger company. On a more ominous note, the company suffers significant declines in sales, profits, and financial health.

Always keep the revision in perspective. While you do want to review and correct constantly, you don&undefined;t want to change a strategy unless you are sure it isn&undefined;t working or you see real changes in the underlying assumptions that formed the foundations of strategy.

Reviewing Your Plan

So how do you maintain your business plan? We have to first establish that without regular review -- monthly or at least quarterly review of your planned vs. actual results, with practical analysis of the reasons for variance -- planning is likely to be a waste of time.

Real planning requires regular reviews just as much as navigation requires knowing where you are as well as where you were and where you wanted to go.

Every real plan needs to be full of specific dates, budgets, forecasts, and management responsibilities. People involved have to know there will be tracking and following up on specifics. Then that plan must be reviewed against results, and those reviews should produce course corrections and fine tuning.

Generally a business hopes for a consistent long-term strategy built on short-step incremental changes, not major revisions. Consistency is important to strategy, and the business should avoid the temptation to jump around from one strategy to another so quickly that no strategy is ever really implemented. Remember that even a mediocre strategy well and consistently implemented is much better than a brilliant strategy that wasn't implemented.

However, businesses do come to crossroads demanding major revisions in their business plan. Read the nest article to get a measure of such circumstances

Business Plan Maintenance

A business plan is not a one-time document, at least it should not be. Most businesses put together a business plan during their start-up phase to organize, attract partners and employees, and to try and get a loan or financial investment. This is a great use of a business plan, however far too often once the company has started up the plan isn&undefined;t touched again.

Ultimately, a business plan is about results, about making your business better. If you don&undefined;t think doing a business plan will improve your business, then don&undefined;t do one. Planning for planning&undefined;s sake is a waste of time.

Where a plan is most likely to make your business better is by allowing you to:

1. Set priorities properly.
2. Track plan vs. actual results and make course corrections.
3. Plan and manage the critical numbers that aren&undefined;t intuitive: not just profit and loss, but the relationship to cash flow, balance sheet, and ratios.
4. Communicate your plan to others: partners, employees, lenders, and investors. You may have a great plan in your head, but as soon as you need to explain it to others, you need to write it down.