Don't forget to update this critical foundation for your small business
By Max Berry
A sound business plan is the foundation of any successful business, but this particular foundation should not be set in stone. The world changes faster and more frequently now than it ever has before. A successful business needs to keep up, which means employing a business model that can change with the times. Doing things today the same way you did them a year ago probably won't work. Here are some tips to help you stay ahead of the curve.
Keep your eyes open
Most business plans are written before the actual business is up and running, before an entrepreneur has dirtied his hands enough to understand how his venture will fare in the real world. Bearing this in mind, it is important to keep your plan fluid from the start. Review it at the end of each quarter to see how it holds up and how it could be adapted to fit current business conditions.
If you haven't already, try to include some hypothetical changes in your industry within your business plan. Imagine what might precipitate those changes and devise ways your own business would cope with them. If you study trends in your own industry, you'll have an idea of where the industry is headed and give yourself a head start on how you'll react when it gets there.
Pay attention to the way other businesses, even enormous corporations, change their approach. If you notice that a company has recently undergone an extreme image makeover, or has drastically changed the way it reaches out to customers, try to determine why those changes were made. Looking at other businesses in the context of the economy and the culture and mapping their progress will provide you with clues as to what works and what doesn't. It will also help you determine the best ways to change and adapt your own business.
The business of revision
When revising a business plan, or writing one for the first time, the emphasis should always be on the consumer. Too many small business owners are so smitten with their own idea that they spend paragraph after paragraph waxing poetic about its potential without identifying who might actually use it. Before you can sell even the most innovative idea, you've got to know who's buying. Pay attention to your own customers; get feedback about how your product or service is working for them. Ask how it could be improved. Use all this information to strengthen your business plan. How, precisely, you will help your customers should be the thesis of your plan, regardless of how that thesis may evolve over time.
Be realistic about how many people your product or service will reach. Given changes in technology, society, and the economy, the number of people who have a use for your service will change. This may mean you need to adapt your product or service, and the plan through which you sell it, accordingly.
The best hard time
An economic downturn is an excellent time to revise your business plan, not simply because, with new economic constraints, you will need to adjust your budget, but also because the lean climate actually affords you some new opportunities. Prospective clients, also feeling the weight of hard times, will be looking for new vendors and suppliers; people everywhere will be looking to cut costs and change the way they do business. Look for ways to adapt your own business model to the times you're living in and court some of this new business. If you can show that your business model is adaptable to the times, you may even be able to attract some new capital in the form of investors looking to put their money in a firm that knows how to adjust.
Still, however often you update your business plan, you should always be candid about the risks involved with running a business; even in good times, there are few sure things. By acknowledging the risks you face, and how those risks will change over time, you better prepare yourself to face them.
