If you are in the process of starting a new business, you’ve probably read hundreds of articles about business plans. Most likely, you’ve read about the various aspects your plan must include and how to go about writing, but there is one topic that you may have skipped over on your way to writing the ultimate plan for success: the importance of having a dynamic business plan. But, before we get into that, let’s take a step back and look how things have changed over the last few years.
How Business Plans Have Evolved
Twenty years ago, if you wanted to start a business, you would sit down, write a business plan, give it to the bank, and hope you were approved you for a loan. Most likely, your plan would then be shoved in the bottom drawer of your desk and never seen again. Today, in the world of angel investors, venture capital, and rapidly changing technology, a business plan is more important than ever.
Unless you are a serial entrepreneur who has proven great success in starting companies, a business plan is often the first thing an investor wants to see. With more than 32 million businesses in the United States, they want to see that you can walk through the various steps it will take to start, and stay successful, in the market. Not only that, but they want you to be able to account for the unexpected turns along the way and show that you have thought about every possible curveball that is thrown at you. That’s fair enough, right?
Defining a Business Plan
So, why is it important to have a dynamic business plan? First, let’s define it. A dynamic business plan is one that serves as a living document to guide an organization on a daily basis. This means from day one until you sell your business for millions of dollars or IPO. It’s not simply about making your business sound really good so you secure funding, its about seeing you through until the very end. The key difference between a dynamic business plan and the old, static model, is that it is a living document. It changes and grows as your business grows.
Let’s say you pitch your business plan, receive venture capital funding, and nine months later, encounter something that nobody saw coming. It wasn’t in your business plan, but you have to pivot in order to stay alive. What do you do? Do you throw in the towel and call it a day? No! You figure out how to overcome it. You go back to your dynamic business plan and look at how you can adjust your business to move forward. Maybe you will have to make changes to your financials, maybe the changes will occur in your organizational structure, or maybe you will have to adjust your timeline and re-work some of our current practices.
What makes a business plan dynamic?
A dynamic business plan:
- Anticipates uncertainties and provides alternative options
- Highlights potential points of weakness and counterbalancing strengths
- Leaves room for additions as your business grows
- Doesn’t live in your bottom desk drawer
No matter what, a dynamic business plan helps you overcome the different roadblocks you are likely to hit along the way. It brings you back to the drawing board and reminds you why you started your business in the first place.
So remember, once you get started, don't just shove your business plan in the bottom drawer. Keep it somewhere accessible so you can refer to it and make changes as your business grows year after year.