- Circumstances and business goals change, and that’s why it’s important to review your business plan every year.
- Consider what’s changed about your business, your clients and your partners.
- Consider also what’s changed about the goals you have for your business, both long and short term.
The end of the year signals the beginning of next year, and your business plan is probably outdated. Take some time this winter to review your plan and embrace the chance to improve business outcomes in the new year.
Start with your executive summary
Besides updating this section to reflect changes in key leadership personnel, employees, and the areas you serve, it’s also time to update financial information. First, reflect on where the business has been, and more important, where you want it to go. All things change, and it’s likely your business goals have, too. As you consider the big picture, it’s also time to adjust your executive summary to reflect changes in project types, geographic operating areas, and growth plans.
Update the company description
This section contains in-depth information about what your company does, the markets it sells to, and the competitive advantages it has. You’ll want to update key personnel here to reflect the most recent information about the experts you have on your team. Who do you plan to serve in the coming year? Update the markets where you plan to work and tell why the company is structured to serve those markets. This is the place to talk up your strengths.
Consider your markets
Review end-of-year forecasts from economists and other experts so you understand where the best opportunities will lie in the new year. If the categories of construction you specialize in are forecast to experience a downturn, then you’ve got to consider how you will maintain a good volume of work. On the other hand, if your categories of work are predicted to see rapid growth, then you’ll need to think about how you will staff up to meet that demand. This is also a good time to talk with long-term customers to understand their plans and to get a reading on how you figure into their plans.
Consider your competitors, too. How do your services differ from theirs and what niche do you stand to excel in?
Review company structure
The organization of your business and its management are key indicators of your viability. They tell you—and potential clients—a lot about your continuity and expertise. It might be time to change structure, especially if you’ve decided to move into different types of delivery methods for different types of clients. Some clients will prefer to deal with a Subchapter S entity instead of an LLC or sole proprietor. Now is the time to match your structure to your current needs for better management of risks and rewards.
Update your product line
Here is where you review what exactly it is that you sell. Without a clear understanding of this, your marketing efforts will suffer from a lack of clarity and focus. If you build single-family homes, then sure, that’s what you sell. That said, homes can elicit emotions from your potential customers. Safety, security, comfort, return on investment, and functionality are just some of the aspects that make a structure a home. Figure out what you are selling so you have a clear message for potential buyers.
Review your marketing
All of your considerations to this point become factors you must address in your marketing plan. The strategy you use needs to match your business goals and resources. You can build a superb marketing program, but if you don’t have the people or the money to pull it off, it won’t serve you well. Take a look at how your marketing worked last year, think about how you will market based on the customers you’ll pursue in the coming year, and then design a strategy that doesn’t tax your available resources. Describe exactly how sales take place so anybody who works on the marketing program can quickly understand the process you envision.
In your next business plan section, you have identified funding sources and amounts requested or received. Now is the time to consider funding in light of your new plans. Will you need to raise more money? If so, where will it come from? Get specific here, listing additional personnel, equipment, and other places for new funding. Check in on your long-term financial plans and clearly state them in this section of your business plan. This is a five-year plan, so review it carefully in light of last year’s performance and what you expect in the coming year.
Finish up with finances
In this section, you will update your financial information to illustrate your business’s stability. Use income statements, cash flow statements, balance sheets, and collateral. Then show how you expect the financial picture to evolve over the next five years. Break out your first year’s projections by month or quarter and explain your projections in detail.
Finally, add credit histories, licenses, testimonials, and any other supporting documents to the appendix.