At least yearly, it’s essential to review and update your business plan. The main reason is that a resilient business, one that can bounce back after hard times, always pays close attention to the industry, their own customer data, and other information to stay ahead of the killer technologies and issues surrounding their business that could signal either threats or opportunities. Having a formal plan in place to review your business plan and make changes annually makes sense.
Adapt to Market Trends
As you run your business, the market will change due to influences outside your control. They can be due to political, socioeconomic, and personal issues – but they do change. Noticing the trends can help you detect any threats like killer technologies and opportunities like new markets to enter if you’re always paying attention.
Adjust to New Technologies
Think about all the innovative products that no longer exist or are no longer major economic drivers, such as VHS tapes, rotary dial phones, malls, and buggy whips – some things don’t last forever. If you’re staying aware of what is coming, you can adjust your business in time to withstand the changes.
Respond to Customer Behavior
If you’re going over your business plan and updating it at least yearly, you can use something you did not have when you first started to be more accurate in your planning – that is, customer data due to their behavior. Collecting that data and then using it to better your business cannot be beaten to increase your resiliency.
Tweak Processes Due to New Regulations
This may end up causing an unplanned update to your business plan if you’re not paying close attention. A good example is that if you use social media platforms for your marketing like YouTube or Facebook – they may change the rules or laws, making it harder or even impossible for you to continue.
Invest More or Less Due to Profit
If you were making more or less money than you thought you would when you created your business plan, it makes sense to ensure you’re using your profit wisely by updating your business plan to reflect the reality of your impact.
Stop or Start Projects Based on The Data
If you push out many projects and launch different products throughout the year, looking at your data to find out which are profitable and which aren’t is an excellent way to determine whether to keep going or let something go.
Keep Partners and Stakeholders Informed and Unified
Your business plan is a great way to help your stakeholders and partners know what is going on with your business. Keeping it public and updated regularly helps create trust between you and anyone else interested in your business.
Plan for Major Shifts Due to Changing Goals
As you stay informed about your industry, you will be more prepared for major changes. When things change, it’s time to update your goals and the steps it will take to reach the goal.
Assists with Competition Differentiation
As you build your business, you’ll notice even more competitors, which is a good thing. Remember, if you have no competition, you may not even have a profitable idea. Competition is good because you can use their audience, research, and offers to make yours better by filling in the gaps and making yourself stand out.
Highlights New Opportunities or Threats
Going through your business plan and updating it each year is an excellent way to examine the data so that you are cognizant of new opportunities or potential threats.
When it comes down to it, a business plan is never supposed to be static. A business plan should grow and change with your business in order to withstand the test of time. Think about companies like Netflix. They started as a mail company sending DVDs through the mail and have evolved into a digital company, and now, they’re a full-fledged movie making company. As they noticed threats and opportunities in the market, they adjusted their plans so that no matter what happens with technology and the economy, they can stay in business performing their mission, which is “To entertain the world.”
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