5 Reasons You May Want to Create or Update Your Business Plan

Now may be a good time to assess your company goals. Learn how to use a business plan to help keep your business focused and growing.
December 26, 2017

December is National Write a Business Plan Month. As the year comes to a close, now may be a good time to take a look at your current plan and see if you're on track for a successful 2018. This is also a good opportunity to update your plan or even create a new one.

For any type of business, having a plan is a good idea, advises Peter Strauss, an attorney, captive insurance manager and founder of The Strauss Law Firm.

"A business plan provides a strategic vision of both near-term and future goals and objectives," he says. "The business plan lays out the strategy, sets the playing field and defines how to get the ball across the goal line."

Benefits of Having a Business Plan

"A business plan helps you set clear goals that will ultimately lead to the success of your business," says Lyron Bentovim, CEO of The Glimpse Group, which assists early-stage entrepreneurs in the augmented reality (AV) and virtual reality (VR) industry. "Failure to create a plan can lead to haphazard decisions and unfocused day-to-day activities that could ultimately steer your business off-course or delay its forward progress."

An effective plan can help you accomplish the following.

1. Provide a clear course of action for the future. 

A well-conceived business plan maps out the steps you need to take to reach the goals you wish to reach. 

When you're in the midst of doing business, it's easy to forget where to steer your ship. Following your plan can provide you with clear vision and direction.

2. Secure funding. 

If you require an infusion of capital for your business, a business plan is generally a necessity. Potential investors need to see that you have a solid plan that has a good chance of protecting their investment.

The constant review of where you've been and where you want to be are vital in the deployment of what will ultimately be a successful business venture.

Peter Strauss, founder, The Strauss Law Firm

"Any company trying to raise money from angel investors, private capital or applying for bank loans requires a business plan in place," says Mirela Mitan, CEO and founder of skincare company MMXV Infinitude.

3. Identifies areas for improvement. 

"Having a business plan can alert you to gaps or discordance between what you want to achieve with your business and any weaknesses or resources needed to succeed," says Mitan. "A company's business plan provides a way to force entrepreneurs to focus and think through all of the key elements needed to make the business successful."

4. Helps you plan for the upcoming year. 

One of the best aspects of creating or revising a business plan at the end of the year is its ability to help you plan for the next 12 months.

"End-of-the-year business planning provides business owners the perfect opportunity to reflect on the year's past successes and failures, look forward to future developments and typically is the appropriate time from a financial standpoint to plan budgets and allocate resources accordingly," says Strauss.

Looking closely at your business plan allows you to zoom out and analyze your business, believes Courtney Reum, co-author of Shortcut Your Startup and co-founder of M13, a brand development and investment company.

"Look back on the year and ask yourself what's going well in your business? List your points of strength and weakness," Reum says. "Prioritize the list, and then come January you have a quick and dirty roadmap for improving your business."

5. Enables you to analyze the last 12 months.

The end of the year is a good time to take a "hard look at your business plan in terms of how the past year went," says Bentovim. He suggests asking the following questions to further analyze the last year:

  • Did you stick with what you'd planned? If so, how did your business fare?
  • If you missed goals, how did that impact your overall business?
  • What adjustments are needed to make the next year even more successful than this year?

Contents of an Effective Business Plan

A good business plan contemplates all aspects of your business, advises Strauss. 

"The plan will include the hardware, infrastructure, office building, computers, marketing collateral, equipment and software, as well as the employees required to carry out the company's objectives," he says. "A business plan should also outline your financial position, including your assets and liabilities."

Mitan suggests thinking of the parts of your plan like pieces of a puzzle. 

"Completing the puzzle will help you see the full picture of how it would be best to conduct your business in terms of your goals," she says.

A business plan generally includes:

  • a description of your company
  • your mission and vision statements
  • your market
  • a description of your products and services
  • product development specifics
  • your sales, marketing and financial plans
  • an overview of your management team and organization

When developing your business plan, Bentovim suggests asking a key question. 

"When you came up with your dream business and decided to turn it into a reality, what did you want to accomplish?" he says. "Ultimately, your plan should show how you plan to work towards and accomplish your overall goals. It should illustrate your direction and vision for your company, the market, how you plan to attract any necessary financing and include details on the strong and solid team behind you."

But the work doesn't stop once you have a well-thought out business plan. 

"Writing a business plan is the first step, but actual implementation is the most important step," says Strauss. "The constant review of where you've been and where you want to be are vital in the deployment of what will ultimately be a successful business venture."

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