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Technology Tip

Technology Tip
Dave Pelland has extensive experience covering the business use of technology, networking and communications tools by companies of all sizes. Dave's editorial and corporate experience includes more than 10 years editing an electronic technology and communications industry newsletter for a global professional services firm.

Developing or Revising Your Business Plan

Developing or Revising Your Business Plan

Whether your small business is in its earliest planning stages or well-established, a business plan can be an effective tool in helping you optimizing the company's strategic and financial goals and performance.

Developing or revising a business plan can help your small business better understand its objectives and market, and can play an important role in raising capital.

Instead of being written and stored on a shelf, an effective business plan should be a living document that guides your company's performance, keeps you on track and helps you identify opportunities to improve.

Business Plan Basics

An effective business plan provides a wide range of information that is useful to several audiences, starting with the company owner.

As you start thinking about starting your business or exploring different markets, a business plan helps you evaluate a variety of factors that contribute to (or can help undermine) your company's performance and success.

In many ways, the planning aspects of a business plan are far more important than the final document, and that planning can provide a reality check that helps you question assumptions about your company and your markets.

Researching critical issues such as how much you'd need to charge for your products and services, for instance, helps you launch your company with more realistic expectations than would likely be the case if you ran into the marketplace with only a hot idea.

And although business plans are becoming less common among technology start-ups and investors, they're still important tools for companies in most other industries.

An effective business plan will address important success factors including:

  • Your customers and the problem you'll be solving
  • The size of your potential market
  • Your business model and how you plan to reach customers
  • Sales and expense projections
  • Capital needs and cash flow
  • Your management team and relevant experience

While some of these factors will be less relevant for an established small business, most will be important if the company seeks bank financing or external investors.

Business Plan Resources

A variety of tools and software services are available to help small business owners develop or revise an effective business plan.

Business plan software, including several cloud services, can provide industry-specific templates that can be customized to meet your company's needs. Typical features include text descriptions of what a business offers, and many packages include spreadsheets to help with your financial projections.

Many banks offer online templates and financial planning tools to help company owners develop effective business plans and prepare financial projections.

Organizations such as the Small Business Administration, SCORE, local colleges, Chambers of Commerce and other groups often schedule business-planning workshops. Similarly, your banker and accountant can serve as sounding boards while you're developing a business plan.

Reviews Can Be Helpful

Once your business plan is complete, it can be a good idea to review it on an annual or other regular basis.

Companies and markets evolve over time, and it can be helpful to review your strategic and financial plans to help ensure you are still on track and reaching your company's full potential.

Reviewing your financial projections, for example, can help identify areas where your planning didn't work out quite as you expected. Or if you've changed key aspects of your company's operations, updating your plan can provide important information should you need to recover quickly after a business interruption.

For a wide range of reasons, developing and maintaining a current business plan can be beneficial in helping your small business thrive.

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