The entrepreneurial adventure is not set out in the business plan. If he draws a roadmap, he does not rule out all kinds of adventures. This roadmap in the image of a boat race will cause his sailor to choose other options than those he had planned depending on the wind, storms and sometimes dead calm. He will make his evolution a proof that in the adventure he is the one who knows how to adapt and find the way that will lead him to success.
You established your business plan a few years ago. This includes a market research, presenting your team, your product, your strategy and its quantified effect. Yes, but here’s it, the predictions you made turn out to be different from reality most of the time. So why and how is it updated?
The business plan is an essential tool for the entrepreneur. It allows you to present your battle plan to your potential or real investors. Generally, it is between 30 and 50 pages and accurately analyzes your market and defines your positioning in relation to your competitors as well as the means that will allow you to establish yourself in your market. So why update it?
Knowledge of your market is changing
You know your market better and better. Using objections and comparisons (by your customers most of the time), your vision of the market evolves. Those who were not your competitors become competitors and vice versa. The initial truths may turn out to be completely wrong, or new things may emerge that you did not know. Updating your business plan allows you to take this new data into account and give you a picture of your business in its universe. The market also changes by itself, some competitors occupy a different position than the one you have known.
Also your own positioning …
In addition to your market, which you may not know perfectly well, it is your positioning that may have changed. Your better knowledge of the market or confrontation with the field often generates modifications. Criteo, which has changed its business model several times, is a typical example. To succeed, you must first of all know how to adapt to your market and take into account the elements that make it up or that affect it. An entrepreneur recognizes himself in terms of his ability to adapt to his market.
Your strategy can change
The strategy you originally planned may change. Your knowledge of the market or the many tests you have completed can make you make long-term decisions that are different from the ones you originally planned. Your funds may have evolved in a positive or negative way. You will therefore need to take this into account in order to develop your penetration or development strategy in your market.
Your encrypted data is refined
But that’s not all. Reality gives you more accurate numbers. So you can refine most data. In particular, your projections will be affected by the confrontation on the ground. In order to have a clear vision of your development and to take a step back, it is recommended to update your business plan in relation to these. Monitoring your activity is crucial, do not hesitate to develop your business plan at the same time. Having a good overview of the development of its revenue, its cost structure, etc. is essential to effectively manage your business. Above all, your business plan remains a planning and decision-making tool.
An effective communication tool
Above all, the business plan is an effective communication tool with your investors. It is therefore essential to update it so that those who are not directly confronted with the terrain understand the development and can absorb your experience. Updating the business plan allows you to communicate effectively with them.
As you probably understand, the business plan is not a tool without interest. In addition to simple projections aimed at convincing investors, it allows you to shape your vision of the market and define your strategy in relation to it. An essential decision-making tool, it allows you to follow developments in relation to your predictions. Its implementation remains tedious, but is often very useful …