A business plan is an important part of starting up a business. It can keep you on track, make you accountable, and enables you to monitor your progress throughout the year. However, many companies can find it difficult to strike a balance between ambitious and achievable, especially if it's their first business plan. This can mean it often feels difficult to live up to the targets and optimistic intentions of your initial proposals.
Here are three ways to evaluate your business plan to see whether you're meeting your full potential and when you need to adjust your blueprint:
1. Progress checks
An important part of any plan is having regular points at which you check the progress you've made and how far you are off your targets. Your business plan likely includes a timeline, as well as financial and marketing benchmarks. It's important that you are able to make tangible developments towards the goals you've outlined in these parts.
However, many elements of your business will change. It may face new challenges, the economic climate may fluctuate, or you may get a sudden investment you hadn't expected. It's essential that your business plan is adjusted to reflect these changes and how it will affect your organization in the short and long term.
Having an accurate business plan is the most important aspect as it lets you better understand the challenges you may face, and what outcomes you can expect. A blueprint with lofty goals that you are never going to achieve is pointless, you need to include short-term targets that are within reach for it to be valuable to your business.
2. Next steps
As well as using your business plan to monitor your progress, it can be a key way to allow your company to take its next steps. At some point you'll need to turn to investors or lenders for funding, whether it's to expand your operation or boost your cash flow. Having an accurate plan that shows tangible developments will be key for showing these people the state of your company and what direction you want it to head in in the future.
Your business plan should always accommodate these 'next steps', even if you're not looking for financial support in the near future. It helps you see whether your progress is helping you realize your long-term goals and if you're staying true to your blueprint.
3. Keeping costs down and profits up
A key part of living up to your business plan is keeping your costs and profits within the margins you outlined in your operating and financial predictions. This will help you decide where additional savings can be made or further investments should be placed to get the most out of your model.
If you're disappointed with your company's progress to date, you may want to pay particular attention to this part as it's the foundation of any successful business and usually where most problems arise.