Category: Business Planning

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Why Update Your Business Plan Every Year?

 If the business plan is often criticized even during the creation of the company, because it often turns out to be unrealistic, it remains a particularly useful tool at all stages of the company. You have surely written it carefully and at the cost of many questioning. You’ve spent a lot of energy but like many entrepreneurs, once this phase is over, you decide not to put it away in a corner of your computer. If it quickly becomes obsolete, it can with updating become a benchmark and a compass. Explanations.

Do Not Lose The Conducting Line

Comprised between 20 and 50 pages, it is above all an opportunity to lay the basis of what your business is even if it will probably evolve over time. The business plan remains the showcase of your future business and describes, among other things: your personal presentation, the legal form, the services envisaged, the targeted customers, the competitive environment, the material, human, promotional or financial resources available and necessary as well. than the forecast figures.

If all the figures are likely to evolve and be refined, the business plan remains an essential tool to keep your line of conduct and move in a direction that will prevent you from being scattered in all areas. It presents your entrepreneurial project and your long-term vision and can help you remember the reasons that made your business successful in the early years. It can help you understand the reasons for a shift in the business model and analyze them cold.

Note that you can as much entrust the realization of your business plan to a chartered accountant as create it yourself even if certain decisions will have been taken based on elements that they do not have. Specific software published by the big names in French accounting exists if you want to make your job easier.

To Update Your Forecasts

Due to its complexity, the business plan tends to be put aside by entrepreneurs once their business has started. However, it should be remembered that the tool allows you to track your activity and compare it to your previous forecasts.

Monitoring can take the form of a dashboard with the following control elements: implementation of the means and planned actions, compliance with costs, achievement of forecast turnover … and to go further, it can help you. Helping with cash flow, depreciation, financing, results… Updating it therefore amounts to refining it because your field experience indicates the variables that have not been reached and that you will have to take into account.

It is clear that the capabilities of the business plan, in terms of forecasting, do not stop at the preliminary phase of the creation of the project, and they remain essential to the company whatever its period of life. The tool allows you to have a head start and a vision of the future in terms of turnover, balance sheet and income statement. This notion of anticipation allows you, for example, to plan adaptations or organize new development perspectives for your activity. Your business plan is therefore a planning and decision-making tool.

Indeed, it allows you to see if your forecasts have been corrected over time, but also to reveal if there are new points on which you will have to pay your attention for the future, and this by integrating the evolutions. of market events. We can cite as an example the arrival of a new competitor which could have repercussions on the turnover of the company or the massive digitization of a profession.

Your Business Plan Can Always Be Used

It is important to regularly update the business plan because it can always be useful to you, in particular for your past but also future investors. You may be asked to update your business plan regularly, but above all it can be of use to you in the event of a fundraising or when there is a need for financing. While your balance sheets can get you off a lot of times, that isn’t always the case and updating a few years down the road can be time consuming if you’ve been leaving it out for years. So don’t be surprised, and remember to look into it regularly.

From a more global point of view, all of the company’s partners are quite fond of this tool and appreciate that you communicate it to them from time to time if they ask you to. Above all, the business plan can allow you to discuss with your associates, or even yourself, the company’s strategy, which may have changed significantly with feedback from the field. A meeting on this one can be an opportunity to discuss certain points again and to share your convictions on the future before reaching a deadlock. For example, your partner may have a vision for the future of the business that has changed and not tell you about it. Likewise, this can be the case for you.