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June 29, 2010

Updating Your Business Plan

If you want to attract funding for your business, then you’ll need a professional business plan.

Click here to learn how to write great business plan!

A business plan is a living, breathing document – just as you and your company are living, breathing entities. Successful businesses evolve. Even if you have found success in your existing product offerings, marketing plans, management team, and business processes, you will always find a way to do better and grow.

Let your business plan evolve right along with you – to demonstrate to lenders and investors, both new and old, that you are and continue to be a solid investment.

Here are the four most common aspects in which you will update your business plan over time.

Integrate business milestones into your Operations Plan as your company achieves them.

Business milestones, known among business development experts as long-term processes, appear in the Operations Plan in the form of charts with supporting prose. They are projections of when your business will introduce new products; achieve certain revenue levels; execute key partnerships; secure key customer contracts; encounter key financial events such as additional funding rounds or IPO; hire new employees; and other events.

As your business grows, you will (hopefully) reach some of these milestones. Add a new layer to your long-term process charts to display historical facts against your past projections. If you are doing even better than projected, lenders and investors will gain additional confidence in your business. Whether or not you are doing as well as projected, adjust the charts and prose in your everyday processes, or short-term processes. Short-term processes are those activities carried out by your management team to target and serve your target market.

Updating your business milestones charts and supporting text demonstrates your ability to or adjust course accordingly.

Revise the Competitive Analysis section of your business plan as the competition evolves.

As competitors emerge or drop away, adjust your competitive analysis accordingly. Such rotation happens more often in emerging markets than in established ones.

Also, if existing competitors change product offerings, marketing strategies, or known short-term processes, integrate your knowledge into the competitive analysis.

Demonstrating your continued vigilance on the competition shows you have the knowledge required to adjust your own short- and long-term processes accordingly.

Add, subtract, and revise bios from the Management Team section as the roster evolves.

Adding bios, especially, shows lenders and investors that you are growing as a company. This is always good news.

Revise bios of existing management team members as they garner professional distinction in the functioning of your business.

Integrate historical financial data with past assumptions in the Financial Plan.

Just as you do in the Operations Plan as your company grows, add an additional, historical layer to the charts in your Financial Plan. Customer penetration rates, price points, margins, employee head counts, and other financial assumptions will become financial record. Adjust all pro forma (projected) financial statements accordingly.

Click here to learn how to write great business plan!

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