As a business owner you probably developed a business plan when you first started your company.  In the plan you included what your business was about, how you were going to fund it – whether through business loans or from your own capital – who your customers were going to be and what you are providing your customers.  But sometimes it is necessary to reevaluate your business plan and update it.

When your business grows there are occasions when your business plan will need to be updated and changed.  It may not be something you immediately think of but it must be considered.  There are seven good reasons why you should update your business plan, and if any one of these reasons applies to your business you better pull out the original business plan you are working with and review it.

If your business is about to go into a new financial period, you should update your business plan.  A new financial period could happen annually, quarterly or even monthly depending on the type of business you own and the speed in the change of the market.  It’s a good idea to review your plan even if you do not update it at this time.

If you find that you need to pursue additional financing for your business – or even are looking into any type of initial loans for business – you should review your business plan to make sure it is up to date.  You will be asked by potential lenders to see your plan as it will help them make a decision about whether they want to risk giving you a loan.

If the market your business is a part of has changed drastically, you need to update your business plan.  Your customer’s tastes will change from time to time and you may need to look at the overall change in trends to see if consolidation has happened through your customers.  Additionally, regulatory changes may trigger the need to change your business plan.

If your business is working on developing a new technology, product, skill or service you need to look at your business plan.  The current plan may not cover the new things you have or are planning to add to it.  Additionally, if your business has dramatically changed in any way you should reevaluate your business plan.

Has there been a change in your management structure?  If there has you need to update your business plan to accommodate the change and to provide you current staff with new information about where you want to take your business and the goals you have in place.

Major milestones are another reason to update your business plan.  For example, if you have moved from a home office to rented space, employed a milestone employee or have crossed a certain sales mark you need to review and update your plan to include these milestones.

Finally, if your old plan simply does not reflect your business and current goals it is time to update it.  Things can change quickly and make your original plan irrelevant.  Maybe you were not sure of what you were doing when you first wrote it.  You need to sit down and look over the plan and update it to reflect your current situation.

Because business plans have a lot of common elements in them – like cash flow projections and marketing plans – you need to look at these elements first as they will be the easiest parts of the plan to change.  You will also want to review your plan to ensure that you have allotted for company growth.  You may find that the type of business plan you utilized when you first developed it may no longer work.  When this happens, you should consider a different type of business plan to try.

Keeping your business plan updated will allow you to better gauge whether or not you are meeting the goals you set forth for your company.  Many business people do not take into consideration that their business will change as it grows and never think about looking at their business plan.  Hopefully these tips will help you grow your business and you will remember to review and update your business plan on a regular basis.