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Benefits of Updating Your Business Plan

| September 11, 2015
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When it comes to the formation of your business, one of the most important documents you completed was a business plan. With a solid business plan in place, your company was on the right path to determine and monitor objectives, secure initial funding as a startup, manage organizational and employee requirements, and manage future growth. Over time, every good business plan is worthy of revision to ensure it still meets the original goals of the business. Here are a few reasons why updating a business plan is so important.

Refocus on the Big Picture

As your business hurdles through the initial weeks and months hiring employees, establishing professional contact with vendors, and building a brand image, it is all too easy to become wrapped up in the day-to-day operations of the company. Sometimes your business changes or your industry advances to a point that your original business plan no longer aligns with the reality of the situation. This isn't a sign that your original plan was weak, but highlights the reality of a plan on paper as a static item.

The circumstances and factors that impact your industry may have changed faster than you anticipated when you wrote the original plan, so if it seems irrelevant today, it's probably time for a redo.

Improve Performance for the Future

A business plan written five years ago may still be relevant to the growth goals of your company now, but what about in five more years? What about in another decade? Updating your business plan allows you to factor in the changes in the market and success of your business to date in the interest of resetting the company's goals. If you've already achieved some of the initial goals of your original business plan, such as benchmarks in sales or the number of employees, it's time to set some new goals, and a new business plan provides a map to follow in doing so.

Maintain Effective Operations

If your original business plan was written when the company consisted of you alone working from the basement office in your home, it's probably time to revise that original document. One of the key functions of your business plan is to establish guidelines for the daily operation of the business. If you've grown to a point where other executives are on board and you rent or own traditional office space, that original plan needs to be updated to reflect the day to day reality of your business structure.

Most importantly, you may have reached a point where you are considering stepping back from your current role to a less involved position. You may not have considered changes in management and leadership in that initial plan, making it difficult to step down without a business plan that provides a clear path to follow during that process.

Maximize Potential for Success

There are a number of changes that have likely occurred since you wrote your original business plan. Significant market changes may have led to shifting client tastes, a consolidation of trends among customers, or even altered regulatory guidelines. Perhaps a new competitor has entered your industry looking toward your customers for growth potential. Whatever the reason, you'll need to update your business plan to account for these changes in the environment and maximize your company's potential for success in the future.

A Subtle Reminder

Success breeds complacency. Hopefully your company has successfully established a brand presence, built a niche in the industry, and achieved the financial goals you set forth in the original plan. Now is the perfect time to step back and remind yourself of the original goals for your company. More importantly, to re-envision the steps needed to meet those goals.

If you've been putting off updating your business plan, or never even though of doing so, these benefits are just some of the many reasons to consider a new revision. Waiting to update your business plan just makes the process more difficult, and can expose your company to unnecessary risk in the process. Take a look at your old plan now, and you will see the places it no longer serves you. Your business can only thrive from the adjustments you make.

These are the views of Social Advisors, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Richard L Farrar is a registered representative of Lincoln Financial Advisors Corp. Securities offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC). Investment advisory services offered through Sagemark Consulting, a division of Lincoln Financial Advisors, a registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies

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