Business management

Updating your business plan

A business plan isn’t set in stone; it’s a ‘living document’ that can be updated to keep it relevant as your business grows.

Factors such as technological upgrades, macro-economic indicators, political upheaval, new market entrants, weather events, local council projects, new sales, or hiring and firing could all influence how you run your business. Over the course of the year, one or more of these factors could change a great deal, so your business plan must keep up, too.

Big challenges call for big changes

Sara Tye, founder of redheadPR, says her biggest challenge came in 2008 with the recession caused by the global financial crisis. At the time, she had expensive liabilities that could have dragged her business under, but, with quick thinking, she was able to secure it while others failed.

“If you get an opportunity, you need to flex. If you have a major problem, the same. I had to do it in 2008. I didn’t want to change, but I had to. It took all my strength, resilience and power to get through the crash.

“I moved out of the Covent Garden office and out of the centre of London. Then I had to rework all budgets for surviving clients. I prepared my staff and gauged who wanted to move to other jobs. I made every single change I needed to survive.”

Global and geopolitical events are having a similar impact on businesses today, says Nick Thompson, managing director of software company DCSL. “Brexit is a perfect example: businesses all over the UK need to adjust their business plans and prepare for the changes that leaving the EU will bring.

“Due to the turbulent economic and political climate, we decided to update our business plan recently. Many businesses are waiting for confirmation of what ‘deal’ or ‘no deal’ could mean, but I believe the opportunities outweigh the risks for companies that choose to grow.

“We planned expansion in 2019, but decided to move it forward to 2018. This acceleration meant that we had to dedicate more attention to recruitment, HR, management and operational improvements.

“The skills gap in the technology sector meant that previously we appealed to a lot of EU talent, but with many questions over Brexit unanswered, interest from non-UK-based candidates reduced. We’ve improved our business to ensure we kept attracting the top talent wherever they were based.

“Over the last 18 months, we’ve opened an office in London that supports our Farnborough headquarters, increased employee benefits and empowered the team through new in-house project management systems.”

Reacting to opportunities

Some changes are forced upon businesses; others come because of sudden opportunities. Serial entrepreneur Carl Reader started out with intentions to run martial arts schools, but fell – almost by accident – into franchising with his business advisory service d&t.

“If circumstances change, it’s best to pivot quickly,” he says. “I often move on from plans I’ve made – sometimes this has been due to businesses not performing as expected, but sometimes it’s an opportunity.

Sticking to your plan without constant evaluation or adaptation could seriously hold you back

Merlie Calvert
Founder, Farillio

“With d&t, we were focusing on the niche market of martial arts schools and fell into franchising 15 years ago. It now has 2,500 clients and makes up the vast majority of our group’s turnover. It’s the basis of our strong reputation.”

Reader says one way to avoid too many dramatic changes is to be realistic about your business in the first place. You shouldn’t let your love for an idea get in the way of cold calculation when it comes to the opportunity, the marketplace and competitors.

Being honest about the challenges you face helps to reduce the chance of nasty shocks down the line, but it also means that any opportunities you spot should be realistic and worth changing your plan for.

Responding to customers

“If you’re ‘off-piste’, it doesn’t necessarily mean you’re headed in the wrong direction,” agrees Merlie Calvert, founder of Farillio, a legal-tech start-up that aims to make the law clearer and easier to understand for SMEs, microbusinesses and start-ups.

“Plenty of businesses realise that as they start testing their ideas and converting them into real activities, products or services with real customers, their original assumptions need refining. Sometimes, they need stripping back to the core,” she says.

“I’m a believer in having a plan that you regularly evaluate your progress against, but some of the best advice I ever had was to not be afraid to change the plan.

“Provided you’re changing it for good reason, adapting your plan – even abandoning it in some cases – is a strength, not a weakness. Sticking to your plan without constant evaluation or adaptation could seriously hold you back or cause you to fail.”

Your business plan is a vital document, which can help guide you through good times and bad. The best plans are adaptable and agile, able to respond to market winds regardless of the direction in which they blow. By making changes to your plan when the time is right, you could secure your business’s future for years to come.

Tips for updating your business plan:

  • Evaluate the circumstances. It’s important to judge when it’s time to update. It could be because of a threat to your business or a positive opportunity. Either way, ensure the change is necessary.
  • Seek advice. Don’t make arbitrary changes to your plan without speaking to other stakeholders; they will have important input that could secure your business’s future.
  • Don’t be afraid to pivot. But do ensure there is a strong business case and that the whole team understands the plan.
  • Make it clear. Don’t be tempted to rush your amendments; your business plan must make sense and should allow for business growth in the long term. Communicate the changes to everyone in your team.
  • Re-evaluate and adjust. Your business plan is never ‘finished’, so check back regularly to make sure all the information is relevant to your changing circumstances.

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