Why and How to Reassess Your Business Plan Every Year
A lot can change in a year for a small business. Just like you have an annual physical to ward off health issues before they expand, it's wise for small business owners to set aside time each year to pause and reflect on how their business is going -- and how they may want to pivot or improve in the year to come.
This business "check-up" offers a chance for you to review your business plan to see if it still reflects your goals and values and prepare to make changes if needed. Here are two simple steps to keep your business plan up-to-date year after year.
Step 1: Gather and assess data
Before you update your business plan, you need to understand what went well this year and where you have room for improvement.
Take a look at the six categories below as you evaluate your challenges and explore opportunities for making the next year your best ever. Each category has three questions that you can ask yourself as you take stock of where you've been and look at where you should go.
Every business starts with a target in mind. Each year, you'll want to re-examine your audience to make sure you're still selling to the right people. Review your records to see who your top customers were and if your repeat business was steady.
- Do the customers you actually serve align with the target audience you had planned for?
- If not, why is that? Did your product or service not resonate how you had intended, or did you discover a niche you hadn't considered before?
- Did your audience's priorities change, and if so, do you want to pivot to meet them? Or would you be better off targeting a different audience next year?
A year-end review allows you to compare what you thought you were going to do with what you actually did. Identifying your most successful ventures helps you pinpoint where you should prioritize your energy going forward to maximize your efforts.
- What problem were you intending to solve -- and are the products or services you provide still relevant to it?
- How has the landscape evolved since you initially made your business plan?
- What line extensions or new services could you offer that would help you expand or diversify?
Every small business has an ecosystem of suppliers who ideally can act as a sounding board and help guide you with their industry knowledge. You want to make sure you're surrounding yourself with the support you need.
- Have you found the right suppliers who provide the most cost-effective solutions, along with excellent service?
- Do you have a roster of professionals -- including a trusted attorney, accountant, and banker -- who can offer counsel as you grow?
- Have you identified a mentor who can help take your company to the next level?
You're in business to make money, and a year-end review of your business plan will remind you where you had intended to land. But it's not just about the numbers. Whether you achieved your goal or not, these questions will help you assess what's realistic and where you need to concentrate your efforts going forward:
- Did you reach your metrics on a monthly, quarterly, and/or annual basis; and did you have peaks and valleys you can smooth out?
- If you didn't meet your sales goals, what factors contributed to this? Were they environmental (such as the economy)? Or could they be attributed to marketing that fell short or a target audience you didn't address?
- If you failed to meet your overall numbers, how close were you, and what changes (big and small) can get you there?
Revenue tells just one part of your cash flow story -- expenses are the other. In some business climates, it might behoove you to keep your business on track by focusing on cutting costs rather than expecting revenue to proliferate.
- Can you downsize your office space and still accomplish your goals?
- Are you spending too much on subscriptions or recurring bills?
- Can you negotiate better terms with the suppliers you have?
Sometimes small businesses have to spend money to make money. Reviewing your business plan can help you see where opportunities may lie and illuminate benefits you could reap from borrowing money or otherwise finding additional funds.
- Would more marketing return an increased return on investment (ROI) that would make a difference?
- Should you invest in additional inventory to have more options for customers?
- Would hiring someone who has a skill set you lack help you leap ahead?
Step 2: Make new goals
Once you've evaluated your business plan, it's time to translate those findings into action for the next year to help your business flourish. Set achievable targets by creating "SMART" goals, which means they should be:
- Specific: Attach numbers; such as "make five new contacts a day" rather than a vague statement, like "increase business."
- Measurable: You've probably heard the business adage "What gets measured, gets managed." A "measurable" goal has parameters that allow you to determine whether you reached it or not.
- Attainable: Goals that are too lofty can end up being frustrating rather than motivating.
- Relevant: Of course, your goals should be related to some part of your business plan.
- Time-based: They should have a deadline, so you have something to work toward.
Writing down your goals, along with a timeline and concrete steps to help you accomplish them, will provide you with a road map to success.
Want to talk through your plans in more detail? Contact your Synovus banker to talk about how we can support your small business year after year.
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This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.