“When you fail to plan, you plan to fail.” This quote is most often attributed to Benjamin Franklin, but whether or not it was him who coined the phrase, the idea behind it remains true—especially when it comes to a business plan.

It’s a common misconception that business plans are only needed when you first launch a business. A more accurate statement is that your business plan is a roadmap for the entire life of your business. It is not a “one and done” activity. In fact, it’s a living, breathing and changing blueprint for success in both startups and existing businesses that positions them for an effective launch and long-term growth.

In a 2016 State of the Union survey conducted by Endurance International Group, more than half of the small business owners who responded indicated they plan to make financial investments in their business this year. Respondents also cited “obtaining funding” as one of the most important issues for small business owners. A solid business plan is a key component to obtaining necessary capital, and therefore is a critical piece for business owners who are looking for financial resources to help fuel growth.

If you are one of the 50 percent planning financial investments in your business this year—but you haven’t reviewed your business plan lately—now is a good time to dust it off and make some updates.

A thorough update once a year helps to evaluate and identify growth opportunities. As you reread your business plan, review and reconsider the details of both the long-term strategy and day-to-day operations, including finances, staffing and marketing. Talk to customers and potential customers to gain some insight into what products and services they are buying, what problems they face in their businesses, and what solutions you could offer to help them solve these problems. Updating your business plan with modifications to your market segmentation or responding to current market demands with a new product or service offering proves you understand your business and are prepared to deliver results.

Similarly, if your industry is facing new competition or economic factors have influenced your business (either positively or negatively), these items should be explored in detail in a revised business plan. This will help you think through the implications these changes might have on your business and make appropriate plans for change. Potential investors and lenders want to know that you have considered options for business viability, so including all of this information in an updated business plan helps to differentiate your business and increases your chances for obtaining funding when you need it.

In addition to a thorough annual update, it’s equally important to spend some time reviewing your business plan each month, particularly the sections that consider the financial stability of your business. Your monthly income statement, balance sheet and cash flow statement are excellent resources to inform your business plan. These reports aid you as a business owner in monitoring company performance, enabling you to make educated adjustments to pricing structures, inventory levels, capital investments, etc.—all of which should be outlined in your business plan. This information may also be used by investors or lenders to evaluate the strengths and weaknesses of the business as they consider whether to invest or lend to your business.

The ongoing process of creating and revising a business plan is an integral activity in the success of your business. It helps you set and track progress against your goals; it increases your knowledge and understanding of the markets you serve; and it positions your business for growth through the strategic allocation of resources… including funding. iBi

J. Boger Hessing is VP – Commercial Relationship Manager with PSB – Princeville State Bank, Member FDIC and Equal Housing Lender. For more information, call (309) 693-9494, email [email protected] or visit p-s-b.com.