Maintaining your Business Plan

The purpose of maintaining your plan is to use business results to guide your future decisions. The plan itself has no value if it does not help you improve business. That&undefined;s regardless of how good or bad, how brilliant the ideas, writing, or how elaborate the tables and charts. Its value is the decisions it leads to.

That means, of course, that to make a plan worth the effort of developing it, you&undefined;ll want to follow it up. Whether that&undefined;s every month or every quarter, you need to track results, analyze the difference between plan and actual results, and manage. Change things that need to be changed. Compare what you planned to what happened in reality. Ask yourself the following questions:

• What went wrong, and how can we fix it?
• What went right, and how can we take advantage of it?
• What changes took place in the competitive landscape that could be updated in the plan?
• What changes took place affecting our market that could be updated in the plan?
• What changes took place internally in our organization that could be updated in the plan?

After you have answered these questions, update your plan accordingly, set new budgets and milestones, adjust your financials, and repeat the process with another review of your plan again next month or next quarter. Update your plan accordingly again, and keep repeating. You&undefined;ll find that maintaining your business plan gives you a better grasp on your business, your market, and everything else that happens with your company.

Major changes in market situation.

Look out for major changes in market situation.

Look especially for changing market factors and changing market behavior.

• Have your underlying business assumptions changed? As an example, the Internet has changed the business landscape so enormously that in some industries almost any plan that was developed without a view of the Internet may need revisions. That may not be true for a landscape architect or restaurant, but for a travel agent, graphic artist, or market researcher it&undefined;s obvious.
  
  
• Do you have new competition? Have new competitors emerged, or existing competitors changed the business landscape so much that you need to review and revise?
  
  
• Has the product or service picture changed? For example a new technology may have emerged, changing the market perception of what you sell. There may be new products or services offering related solutions to the same user needs you satisfy.

To maintain your Business Plan wou must be very watchful of your target market.

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.

Gathering Information For Your Plan

Once you have decided to design or wriye your own plan you need information. A common problem people encounter when writing their business plan is finding information about their business industry and competitive companies. Fortunately, in recent years the Internet has made information gathering simple and easy, but sometimes the best information is found much closer to home, with real people, in real time.

Always take a look at other businesses similar to your own, as a very good first step. If you&undefined;re looking at starting a new business, you may well be starting one similar to one you already know. If you&undefined;re doing a plan for an existing business, you are even more likely to know the business well. Even so, you can still learn a lot by looking at other similar businesses.

• Look at existing, similar businesses.
  
  If you are planning a retail shoe store, for example, spend some time looking at existing retail shoe store businesses. Park across the street and count the customers that go into the store. Note how long they stay inside, and how many come out with boxes that look like purchased shoes. You can probably even count how many pairs of shoes each customer buys. Browse the store and look at prices. Look at several stores, including the discount shoe stores and department store shoe departments.
  
  
• Find a similar business in another place.
  
  Find a similar business far enough away that you won&undefined;t compete. For the shoe store example, you would identify shoe stores in similar towns in other states. Call the owner, explain your purpose truthfully, and ask about the business.
  
  
• Scan local newspapers for people selling a similar business.
  
  Contact the broker and ask for as much information as possible. If you are thinking of creating a shoe store and you find one for sale, you should consider yourself a prospective buyer. Maybe buying the existing store is the best thing. Even if you don&undefined;t buy, the information you gain will be very valuable. Why is the owner selling? Is there something wrong with the business? You can probably get detailed financial information.
  
  
• Always shop the competition.
  
  If you&undefined;re in the restaurant business, patronize your competition once a month, rotating through different restaurants. If you own a shoe store, shop your competition once a month, and visit different stores.

It takes a little hard work but by using the Internet and doing some research at local businesses, you should be able to gather all the information necessary for your business plan.

Get down to nitty gritty

The end should be happy (...contd.)

Finally, before entering into any partnership, do some due diligence. It might be awkward, but even if you get along fine, ask for financial statements and a resume that includes the names and phone numbers of past investment partners. Then start dialing. ATM's Clark even suggests that potential partners take a personality test, then compare the results.

Get down to the nitty-gritty. In the early '90s, Ambuehl and Clark were college friends who owned a piano-moving company. They formed that first partnership with little more than a handshake and a slap on the back. But when they founded ATM in 1999, they decided to establish a more formal structure, partly because they intended to drum up outside investing. They hired a lawyer and formed a C corporation. (...contd)


By: Dimitra Kessenides