Plans need frequent evaluation

June 13, 2009, 3:23AM

Q:In your most recent column you provided advice on where to find resources to prepare a good business plan. Now that I have one and have started up, what do I do with the plan?

A:You’ve put a lot of time and effort into your business plan. Think of it as a living document, and refer to it and review it often. Use your business plan as a tracking and evaluation tool, so that you can determine if your business is heading in the right direction or if it has wandered off course.

Schedule periodic checkups of your business. Many factors that affect your business are tied to an annual cycle. To ensure that your business plan continues to serve you well, make it a habit to update it annually. Set aside a block of time near the beginning of the calendar year, fiscal year or whenever is convenient.

Make this review a priority activity. Often small-business owners allow their time to get absorbed on the more urgent operational tasks and don’t allow time for vitally important management and planning activities.

Validate the assumptions used in your plan. Our business environment is always changing, so ensure that the basesused for your plan are still appropriate.

Assess your performance by reviewing the data in your plan. Compare your expected results against your actual results. Because your plan sets forth marketing, operational and financial milestones, you should carefully analyze actual operating results against the goals and objectives.

Fine-tune your plan. Parts of your business plan may feel very tight and others may still need some work. Look for ways to improve what you’ve done so far. Incorporate the experience you’ve gained as a business owner into your business plan. Anticipate future events — good and bad — that may affect your business. Take appropriate action if goals outlined in your plan haven’t been met.

Get help from others. After you change and update your business plan, share it with your advisers. SCORE, Counselors to America’s Small Business, is experienced in helping entrepreneurs create and revise business plans.

Strive to operate your business according to your plan. Your business plan will work for you if you use it to remind yourself and your team where you are going and how you will get there.

Whether you’re updating your business plan for the first time or the 20th, treating your business plan as a document that evolves over time proves that you understand your business and you know what is required to make it grow and prosper.