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 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.

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.

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

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.

What makes a successful business plan?

I will be very short here as this is discussed in detail in some other article. The basic ingredients for a successful business plan are :

• A well thought out idea
  
  
• Clear and concise writing
  
  
• A clear and logical structure
  
  
• Illustrates management&undefined;s ability to make the business a success
  
  
• Shows profitability

If you have got the things correctluy assessed and documented as mentioned above then you are ready to hit the road :)

What's in a business plan?

A business plan should prove that your business will generate enough revenue to cover your expenses and make a satisfactory return for bankers or investors.

1. Executive Summary--features the highlights of your plan and sells your idea in two pages or less.
2. Company Summary--a factual description of your company, ownership, and history.
3. Products (or Services or both)--describes your products and/or services and how they stand out from competitive products and services.
4. Market Analysis-provides a summary of your typical customers, competitive landscape, market size, and expected market growth.
5. Strategy and Implementation-describes how you will sell your product, how you will put your plan into action, and establishes milestones.
6. Management Summary-provides background on the management team, their experiences, and key accomplishments.
7. Financial Plan-contains key financials including sales, cash flow, and profits.

There can be many more elements depending on what type of business you are planning.

Do I need a business plan?

Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and contains sound business reasoning.

If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.

Reasons for writing a business plan include:

• Support a loan application
• Raise equity funding
• Define and fix objectives and programs to achieve those objectives
• Create regular business review and course correction
• Define a new business
• Define agreements between partners
• Set a value on a business for sale or legal purposes
• Evaluate a new product line, promotion, or expansion

Business Plan

The best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support is to show them a great business plan. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen. Your business plan is like your calling card, it will get you in the door where you&undefined;ll have to convince investors and loan officers that you can put your plan into action.

Once you have raised the money to start or expand your business, your plan will serve as a road map for your business. It is not a static document that you write once and put away. You will reference it often, making sure you stay focused and on track, and meet milestones. It will change and develop as your business evolves.