“How often should I update my business plan?” is a question we often hear. Unless of course, it’s “how do I write a business plan?” or “is it a problem that I don’t have a business plan?” If your question is either of those two, stop right now and read this article. 

At the absolute least, thoroughly update your business plan at least once a year. In reality, it should be reviewed more often — with every major business change — to evaluate and update your goals. But what better time to resolve to undertake an annual update than at the start of a new year! Use your existing plan as a starting point but be sure to also give yourself some distance to look at it from a fresh perspective.

Update your research. When you wrote the existing plan you (hopefully) based it on market research. Before considering a new plan and growth strategy, update that research. Have your demographics changed? Has your market changed? Have your competitors changed? This information provides insight and direction as you update your business plan.

Review your successes (and failures). Evaluate the reports generated by your bookkeeping and accounting software to understand the health and wellbeing of your business. Know the profitability of each of your products and/or services as well as what’s driving your bottom line. This type of data is the information you need to recognize business levers in order to make effective business growth decisions.

Assess your present circumstances. Take a good hard look at your business and figure out what’s changed since the last time you updated your business plan. Have you gone through a hiring blitz or a round of layoffs? Have you built a strategic alliance with a compatible company? Have you opened another location or expanded to a new market? Analyzing what’s going on within your business helps you understand the direction you need to take to maximize growth.

And here’s a bonus tip: Report on your goals from the previous year. Your current business plan set out goals for your business to achieve. Review those goals, analyze your efforts in achieving them and evaluate your success. Write your conclusions and the outcomes on the front page of your new business plan every single year. This shows that you are capable of achieving what you set out to do, which is the first thing potential investors or buyers will ask to see.

We all make mistakes and in our next blog post we’ll tell you how to avoid the most common marketing mistakes made by small businesses.