Why you must continually update your Business Plan

Almost everyone will advise you to write a business plan when you're about to either start your own or buy an established business.

Once you're up and running, it's important to update this business plan regularly so that you, your employees and potential investors know where you're at and where you're headed.

Here we explore why it's important to keep your business plan on track so you can do the same for your business.

Continue to do your research

It's difficult to understand your business without also having knowledge of your market, customers and competitors. Research can help you consistently develop goals and targets, as well as a better understanding of where your business should be heading. It's important to make sure your research is up-to-date and accurate before presenting to lenders/investors as market conditions can change over time.

Set clear goals

Work out what you want to achieve in business before you get into the details. Even if you've already done this in the past, it's useful to see if these goals still reflect your current business.

Update your finances

Lenders and investors need to know your finances are in order and your business is in a strong financial position. Both lenders and investors will want to know how much money you currently have, how much money you need and how much you expect to make in the near future. While a little bit of extra funding will help you ensure you are covered for unexpected costs, be realistic and avoid asking for more than you need.

Generally, lenders require a set of financial statements for the last three years (if available), as well as projected figures for the term of a loan. Your cash flow projections will also be useful in helping you determine how much money you need.

Include a brief summary

Summarise the main points of your business plan in no longer than a page. The summary should include details about your business, market, goals, current financial position, how much finance you're seeking and what it will achieve.

Present it well

Your business plan needs to make a good impression, so keep the language and presentation professional. It's sensible to ask a number of impartial people to proofread your plan to check that it makes business sense and ensure there are no errors. Consider looking at your current plan from the perspective of your lender or investor.

Keep your old copy

The evolving nature of a business means that your plan should be reviewed every three months. It's a good idea to keep a record of each version as they may contain some important historical information as well as your intellectual property.

Hopefully your business is one that continuously develops and evolves, so it's important to reflect this in your business plan as you progress to ensure this a trend that continues.